Nigerians have been saving more money and cutting down on their alcohol intake in coronavirus times.
Nigerians have consumed less alcoholic beverages and sodas during the novel coronavirus pandemic, according to Julien Garcier, Managing Director of Sagaci Research.
Garcier has produced tons of data on the social consequences of the pandemic in Kenya and Nigeria.
He made his submission during a webinar put together by the Africa CEO Forum.
Other panelists at the webinar were Executive Vice President of Unilever Africa Jaime Aguilera, Massmart Chairman Kuseni Dlamini, CFAO MD Marc Bandelier and Niama El Bassunie who is CEO and co-founder of WaystoCap.
All the panelists or business leaders on the continent agreed that the modern retail sector has to adapt to new consumption habits in the COVID-19 era in order to meet rising demand.
CNN Business correspondent, Eleni Giokos, moderated the discussions.
Garcier added that the Covid-19 pandemic is causing a “major reshuffle” in the African retail sector and in the fast-moving consumer goods market.
Using Kenya as an example, Garcier believes that “there has been a strong impact on livelihoods”, as shown in the fact that, in May, “a third of the population skipped a meal due to Covid-19.”
Garcier also identifies several trends from his studies carried out in recent months. Supermarkets are increasingly prevalent in consumption patterns in Kenya and Nigeria, he said.
“There is an acceleration of modern retailing. During the crisis, and especially at the beginning, people were looking for only one shop to meet their needs.
“Also, consumers were looking for the right safety measures. In supermarkets, it’s easy to guarantee safety measures. Modern retail took the lion’s share of food services. People had to eat. They could not go to restaurants or canteens. They were picking up food from the supermarket,” said Garcier.
For Aguilera who is VP of Unilever Africa, “the truth is that our consumers need to eat, to wash, to take care of themselves. And in this regard, our industry is in a good place.”
The Covid-19 pandemic has also led to a surge in online shopping platforms, according to Chairman of Massmart South Africa, Dlamini: “We have seen a double digit increase thanks to the digital services we have been offering during the crisis.”
For Garcier, “in Kenya and Nigeria, there is a strong shift in consumer spending from indulgence categories to essentials.
“During the crisis, hygiene products and home care were essentials. Not only did consumers reduce their consumption of alcoholic beverages, but they also consumed fewer sodas and juices to save a bit of money.
“During this period in Kenya, we have experienced more demand for essential products, particularly if they can be stocked, like long life milk.”
The Unilever VP Aguilera said local production is now key for businesses on the continent. “We will have to adjust. Definitely, consumers will have less money.”
“We need to think about how to industrialise Africa to produce goods for the continent and the world. Local sourcing is cheaper because it simplifies the value chain, the logistics costs and, most importantly, creates jobs,” chipped in Dlamini.
“While this crisis has exposed the vulnerability of our supply chains, we have been able to learn and move very fast. What is helping us is the efficiency we have in our supply chains,” said Dlamini.
Aguilera said the future of business lies in local production. “We have localised many things, for example the production of sanitisers. It’s a very important thing for us. We can react quickly and now the sanitisers we are selling in Africa are made in Africa.
“In the past, it was not like that. It’s a moment where we have had to be flexible and move fast. Even if it’s not perfect, it’s extremely important.”
General Manager FMCG Industries and Distribution at CFAO, Bandelier shares Aguilera’s point of view. “It’s very important for us to reinvent the way we work during the crisis so that we come out stronger. We have turned a problem into an opportunity to accelerate local sourcing.”
“I think the key is: is this local production going to be permanent, or just for the Covid period?” El Bassunie, Founder and CEO at Waystocap said.
Garcier said; “many consumers will retreat to essential categories as they struggle to satisfy basic needs, forcing them to put indulgence on hold. Also, recent growth in modern sector penetration is here to stay. A good market position before Covid-19 is not necessarily a good position to be in today!”
All panelists agreed that the COVID-19 pandemic will lead to a new normal in Africa’s retail and business sector.