Market Trends of Nigeria Plastic Caps And Closures Industry
Beverage Industry is Expected to Drive the Demand
- The soft drink industry in Nigeria presents an exciting landscape for consumers, a stark contrast to a decade ago. With over 100 soft drink brands available, the market is primarily dominated by approximately 15 bottling or drink manufacturing companies. Notably, two-thirds of these enterprises are homegrown Nigerian firms.
- In Nigeria, a concerning trend is emerging: new companies and manufacturers are flooding the market with high-quality products, but they use environmentally harmful, single-use plastic packaging. This reliance on such materials significantly contributes to Nigeria's efforts in waste management. This would encourage packaging manufacturers to start or expand their business in the country, pushing the caps and closures market growth.
- However, Nigeria's SMEs have been pivotal over the last five years, accounting for approximately 48% of the nation's GDP. With a staggering 17.4 million companies, these SMEs offer half of the industry's employment and dominate the manufacturing sector, claiming nearly 90% of its output. According to the International Monetary Fund (IMF), the GDP growth rate in 2023 was 2.86% and is expected to reach 3.34% in 2024.
- In September 2023, Bord Bia launched its 'Spirit of Ireland' drinks campaign in West Africa as part of the Irish government's trade mission to Nigeria and Senegal. Over the past four years, Bord Bia channeled EUR 1 million (USD 1.08 million) into the 'Spirit of Ireland' initiative.
- Furthermore, in November 2023, Seven-Up Bottling Company (SBC), Nigeria’s one of the leading beverage companies, launched two innovative and refreshing beverages, Hydr8 100 carbonated isotonic drink and D’Vybe flavored carbonated soft drink. The exclusive launch occurred during a 2-day “Jolibration” event in Lagos, with diverse attendees, including customers, celebrities, partners, and Lagos socialites. Such launches by beverage companies would enhance the caps and closures market in the country.
Understand The Key Trends Shaping This Market
Download PDF
Food Industry To Witness Growth
- Packaging solutions that meet customers' convenience demands and address broader concerns underpin the industry's rapid growth. Improvements in plastic caps and closures enhance their utility, allowing them to preserve food or beverages better, protect against contamination, and improve their shelf life. In Nigeria, the consumption of highly processed foods at home has consistently declined. However, these trends vary significantly based on region, income level, and urban versus rural areas.
- When it comes to packaged food items like jams, pickles, and nuts, storing them in bottles or containers sealed with airtight plastic closures is common. These closures serve a dual purpose: safeguarding the contents from contamination and tampering while ensuring convenient access and dispensing. In addition, caps and closures play a crucial role in prolonging the shelf life of products, shielding them from external elements like dirt and moisture, and regulating oxygen levels within the packaging.
- According to the National Bureau of Statistics, in 2023, the National Disposable Income surged by 9.29% in Q1 and 8.29% in Q2, marking a significant uptick from the 1.55% and 1.84% growth in the same quarters of 2022. Notably, this growth trajectory turned positive in Q4 of 2021, with Q1 and Q2 of 2023 outperforming their 2022 counterparts.
- Consumers witness increased incomes purchase packaged or processed foods consumed at home. This approach is commonly employed to forecast dietary shifts amid ongoing economic development. This shift encourages the market for caps and closures in the food industry.
- According to NBS (Nigeria), the monthly consumer price index (CPI) of food in Nigeria in June 2023 was 669.7, which increased to 737.3 in September 2023. The Consumer Price Index (CPI) gauges a currency's purchasing power by tracking changes in the price levels of consumer goods such as food. The rise in CPI can further push the market for packed food.
