The price of Indomie Instant Noodles, a Dufil Prima Foods Limited brand, has been reduced because of low demand and sales from cash-strapped consumers in Nigeria.
Earlier this month BrandIconImage reported that some parents in the Federal Capital Territory (FCT) said that they have cut noodles from their household menu as its price continues to increase.
Survey of some stores across Lagos shows that the price of
70g Indomie Regular Chicken noodles dropped to N250 from N300 last month. While
it’s 40-pack carton of Indomie fell to N10,000 from N12,000.
Before Indomie reduced its price, it was higher than other
brands like Mimee (N200) and Honeywell noodles (N250).
“It was because of the operational cost that we brought the
price down,” Temitope Ashiwaju, the company’s group corporate communications
& event manager told BusinessDay. “The operational cost went down in our
favour, and we believe it is the responsibile thing to do to pass on the
benefit to our customers. That was why the price was reduced.”
Ashiwaju pointed out that the company has been in Nigeria
for a very long time and the brand understands it’s consumers, so it is taking
the lead in price reduction to set example for others.
“We are never going to be taking advantage of the populace.
We want to make profit, but in a fair way,” the spokesman added. “That is why
we are determined to keep our products affordable to Nigerians.”
Asiwaju’s statement countered opinions that the price
reduction was due to low patronage.
Dufil Prima’s move has been described as one that will lead
other brands to also reduce their prices because “Indomie is the price setter
in the noodles market,” a retail experts said.
Over the past nine months, the inflation rate in Africa’s
biggest economy has accelerated to the highest largely on the back of the
federal government reforms including the removal of petrol subsidy and naira
devaluation.
Nigeria’s headline inflation rate rose for the 14th
consecutive time in February to 31.70 percent from 29.90 percent in the
previous month, according to the National Bureau of Statistics.
Food inflation, which constitutes 50 percent of the
inflation rate, rose to 37.91 percent from 35.41 percent. And it is on course
to hit an all-time high this month due to a combination of rising demand,
higher transportation costs and worsening insecurity.
The World Bank’s latest Nigeria Development Update report
revealed that rising inflation and sluggish growth in Africa’s most populous
nation increased the number of poor people to 104 million in 2023 from 89.8
million at the start of the year.
This means that from January to November, an additional 14.2
million people fell into poverty.
A recent report by Euromonitor International, a global
market research provider, shows that the sales value of noodles in the
country’s formal market rose year-on-year by 38.2 percent to N427.2 billion in
2023, the highest in at least six years.
Pasta sales rose by 26.1 percent to N404.0 billion, while
that of rice rose by 14.4 percent to N494.0 billion.
The sales volume for noodles increased to 266,600 tonnes
from 263,700 tonnes. Pasta sales volume dropped to 384,700 tonnes from 396,600
tonnes, while 520,400 tonnes of rice were sold as against 547,400 tonnes in
2022.
“Noodles was the only subcategory within rice, pasta and
noodles to see growth in 2023, though this was marginal. While all staple foods
struggled throughout the year, small pack sizes and minimal preparation time
(three to five minutes) make noodles an affordable option in challenging
times,” the report said.
It said noodles had become increasingly popular in food
service due to convenience and low prices. “Indeed, in April, the leading
noodles player Dufil Prima Foods Plc opened its eighth mono-brand foodservice
outlet, Indomie Café, with plans to open more outlets in the future.”
A breakdown of the data shows that plain noodles recorded
the same sales of N0.9 billion in 2023 and 2022. But instant noodles rose from
N308.3 billion to N426.3 billion.
Analysts at SBM Intelligence said in a recent report that
despite cost-cutting and inflation management measures, Nigerian households
spent 97 percent of everything they earned solely on food.
“The Tinubu administration has its work cut out – arresting
spiralling insecurity, tackling grinding poverty, enhancing economic
opportunity and forging a sense of national consciousness. It is safe to say
that it is not off to a great start,” they said.
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