By Modupe Gbadeyanka
According to a market research report titled ‘Africa Dairy Products Market Outlook to 2020 – Inclining Demand for Yoghurt and Ice Cream across Africa to Boost Dairy Product Market’ by Ken Research.
Growing purchasing power parity and gross domestic product (GDP) of various African countries which majorly include Uganda, Sudan, and Kenya are the major factors which have driven the market for dairy products in Africa.
However, declining annual per capita consumption of dairy products which majorly includes milk powder, butter, and cheese in other major economies of the continent including South Africa, Nigeria, Tanzania, Ethiopia, and Algeria is restraining the market.
Dairy market in Uganda is largely unorganized with the presence of large number of small scale dairy farmers.
Processed milk is observed to dominate the Uganda dairy product industry owing to increased demand as an effect of government effort to remove problem of malnutrition in the market.
Uganda has a highly fragmented market with the presence of large number of small scale players with few global giants operating in the market.
Cows are the main milk producer in African countries but in Ethiopia a small proportion of milk contribution is done from camels and goats too in the pastoralist areas.
The dairy market in Ethiopia is facing few major constraints such as rapidly increasing population compared to livestock population in the nation, inferior feed quality and poor management of milk producing animals creating fertility problem and low disease resistance among cattle.
The growing trend among people to consume yoghurt as a substitute of dessert owing to its low sugar content is one of the major factor contributing towards growth of the segment. High prevalence of diabetic population in the continent has also increased the demand for yoghurt as dessert in Africa.
Additionally, the efforts by the market players to provide yoghurt to customers in diverse flavors and small packing as per their needs in economically sensitive countries of Africa further augment the sales of yoghurt.
Processed milk has a high nutrition value and is the only form of food which can provide complete nutritious diet to any individual. The fact makes the product most favourable and highly demanded dairy product in Africa as the continent is fighting against the problem of malnutrition among the children.
Tiger brands followed Unilever in the South Africa butter market owing to its affordable price range. Low labour costs and skilled workforce helped the company in providing butter at low price compared to its competitions in the market.
Wagasi is the most popular cheese made by the Fulani people from fresh cow milk. This type of cheese is most popular in the populated nations of Africa such as Nigeria, Guinea, Mali, Niger, Cameroon, Chad and South Sudan owing to its local production and habit of the taste among the people.
Ayibe cheese market is majorly driven by its high popularity in Ethiopia. Additionally, its own unique flavour had helped the food product gain status of complementary food item in the course of high class people of Africa to soften the effect of spicy food, hence driving the market.
High production of vanilla in African nation like Uganda has provided abundant natural raw material for ice cream manufacturing. Moreover, coco production is also high in the nations such as Ghana and Nigeria. High availability of natural raw material results in high manufacturing of vanilla and chocolate ice creams in various nations of Africa, making them dominating segments in the overall ice cream market.
South Africa dairy product market is a well-established market with the presence of recognized brands such as Parmalat, Dairybelle, Clover, Unilever, Nestle and Danone.
The established market players are recommended to setup their own manufacturing units across various nations in Africa and should fix the certain quantity of production exclusively for South African market which will help them to increase their market share in the nation by offering their dairy products at an affordable competitive price range hence, overcoming the local competition.
The dairy product market in Africa is speculated to have an increased number of organized players in future due to which market competition in various segments of dairy products will get more intense and competitive.
The impact of new entrants in the market would impact price of the products. It has been forecasted that the price of various milk powder would decrease in the future due to which market share for milk powder in the overall dairy product market in Africa is speculated to decrease.
