State of the Nation 2023 of the FMCG Industry in Kenya and Nigeria


State of the Nation 2023 of the FMCG Industry in Kenya and Nigeria

  • The FMCG market grew by 18.1% in value in 2023 compared to the previous year; volumes saw a decline of 3.3% in the same period, driven by inflationary pressures
  • In Q4 2023, there was value growth of 21.6% vs. Q4’22. The super categories driving growth were food (fresh and ambient), home care, personal care, baby care, beverages, and skin care. All the channels were driving growth, with the convenience channel leading by 24%.
  • Traditional trade still dominates the retail landscape, with a contribution of 98% in 2023, while modern trade contributed 2% in the same year.

Nigeria State of the Nation

According to NielsenIQ Retail measurement data for 2023, inflationary pressure was the main driver of FMCG markets in Nigeria. The highest value increase came from skincare, baby care, personal care, home care, and beverages (alcoholic and non-alcoholic). Let’s take a deeper dive into quarterly analysis for FMCG by looking at the market trends.

In Q1, total FMCG grew in value by 16%, which was driven mainly by home care, personal care, skin care, and ambient food, which led to a volume drop of 4.2%. Household consumption spending during this period dropped due to the cash crunch effect.

In the second quarter of the year, FMCG grew by 15%. Personal care grew the most during this period, and volumes dropped the most this quarter, by 4.9% in the year. Moving on to the third quarter, FMCG value growth further went up by 19%, driven by price increases, and volumes also went down slightly, driven by baby care, personal care, beverages, home care, and dairy.

The last quarter of 2023 saw FMCG value growth going up by 22% while volumes dropped marginally by 0.9%, the slowest in the year. The rising cost continues to halt volume growth, causing categories to decline, while we see that consumers are rationalizing their purchases and frequency by spending more for less.

Key takeaways

  • The rising cost of living continues to halt volume growth, causing categories to decline and businesses to even shut down.
  • Consumers are rationalizing their purchases by spending more for less.

Kenya State of the Nation

A Quick Look

  • The FMCG Market value declined 4.3% in 2023 compared to 2022. Units (Volume Growth) saw a similar decline of 2.1% in the same period, driven by price inflation.
  • Q4 2023 saw significant value growth (14.6%) in comparison to the same period in 2022, largely driven by Food categories.
  • Traditional Trade still dominates the retail landscape with a contribution of 58.2% in 2023, while Modern Trade contributed 41.8% in the same year.

The Kenyan FMCG Landscape

According to NIQ Data Measurement for 2023, inflationary pressure was the main driver of Kenya’s FMCG Markets. Categories that saw the biggest margin of value increase were diapers, toilet soap, non-bulk water, energy drinks and nectars categories. The consumer basket is still largely taken up by basic commodities with the top ten categories of Flour, Energy Drinks, Cooking Oil, Liquid Milk-UHT, Fermented Milk, Toilet Soap, Diapers, Liquid Fresh Milk, Toilet Soap, Fem- Care, Breakfast Cereals and Skin Care. 

Let’s take a deep dive into the month-on-month analysis by deconstructing the FMCG market trend in terms of demand and price level.  In Q1, the 9.2% inflation rate was largely driven by fuel costs. During this time, to protect their household budgets, consumers were purchasing smaller volumes of products to minimize their expenses. They also found alternatives to their favorite products in Private Label brands. Consequently, Private Label grew significantly and contributed the most to the Ambient food and Dairy categories.  

In the second half of the year, there was a fair de-escalation in inflationary pressures (7.3%), with a corresponding boost in value growth at 1.9% but a decline in volume growth at 2.9%. Private Label continued to grow, driven by the same categories as in Q1, as consumers continued to seek better value for their money. 

Moving into the third quarter of 2023, the value sales of FMCG goods grew by 12.2%, and volume sales grew to 9.9%. The Liquid Milk category saw double-digit growth of 12.5%, mainly due to inflation that continued even into the final quarter of the year that saw an 18.1 % growth of FMCG goods value. The categories that continued to grow in value as with all the other quarters were Homecare, Dairy, Personal care, Ambient Food and Beverages. Segments such as Fermented Milk, Liquid Fresh Milk, and Diapers saw the biggest growth. It is important to note that the Pasta category saw the highest growth, and non-bulk water under Private Label grew at 0.78%. 

Key takeaways

  • Private Label Manufacturers have an upper hand in the FMCG market since they have understood how to innovate beyond basic concepts
  • Consumers are embracing other shopping alternatives such as omni-channel shopping, wholesale shopping to survive the inflationary pressure that keeps looming
  • Beverage, Ambient Food, Dairy Categories value growth are consistently dominating the FMCG Market

Source: NielsenIQ Data Measurement for 2023.