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Cocoa beverage: Consumers’ poor purchasing power move manufacturers to refocus

Nestle, Twining, Cadbury in top three

By Princewill Ekwujuru & Yusuf kazeem

MANUFACTURERS of cocoa beverages appeared to be hard pressed for to refocus their route to market strategies in the face of growing uncertainty of consumers’ loyalty.

Rising prices of the products, inflationary pressure on consumers’ purchasing power as well as increasing demand for value in brand promises may have moved manufacturers in this direction.

Some of the manufacturers have moved into using the 3-in-1  (cocoa, sugar and milk)  infusion to penetrate the market, a new trend manufacturers’ claim to be saving consumers the hassles of looking for the ingredients separately before having    their    tea.

The major cocoa beverage brands in the market involved in this hustle include  Bournvita  from the production line of    Cadbury Nigeria Plc, Milo, manufactured by Nestle Nigeria    Plc,  Ovaltine, produced by Twining    Nigeria, Cowbell Choco,  manufactured by    Promasidor Nigeria Limited,  Horlicks, produced by Glaxosmithkline Consumer Plc    and    Oluji pure cocoa powder, a local competitor in the market.

Of the above number, the battle for market share has reduced the contenders to four, of which three are positioned as mass market brands, thereby controlling the market. The three brands are,  Bournvita, Milo  and  Ovaltine.

However, competition became heightened in the mass market with the entrant of locally produced cocoa beverages some of which are without known names, basically consumed in the northern part of Nigeria.

The industry leaders also noted that the rise in urban population and increase in market size in recent years have contributed to the boost in consumption of cocoa beverage.

The beverage companies have used the direct marketing tactics to reach their target market, while devising innovative packaging and offering additional sachet pack to drive patronage of bigger sized product packs. Also unrelated products such as exercise books and other consolation prizes, have been attached to some packs of the cocoa products.

Price

Price is no longer a determinant of patronage as competition has narrowed price gaps. Consumers now make choices based on taste, smoothness and ability to dissolve easily in both cold and hot water.

However, consumers have their preferences for the three brands. Some consumers prefer the brands for their smell, smoothness, cranky nature and abundant milk input. Vanguard  Companies and Markets(C&M)  findings show that  of the number of consumers who reacted to questions on their preferences of the brands, majority signified their preference for  Milo,  followed by  Ovaltine, while Bournvita  was not on top of mind recall.

Findings by  C&M also  revealed that  the preference for  Milo  is as a result of its smoothness, rich taste and dissolvability in hot and cold water as well as bonding through sports.

What has also endeared consumers to  Milo is the  square shaped  choco milo,  eaten or licked by    both children and adults.

For  Ovaltine,  consumers were of the view that the brand has the habit of not bonding with consumers, a situation that has made consumers not to easily remember it when it comes to brand choice.

According to some consumers what has helped it in the market is its smoothness, taste and great smell as well as dissolvability both in cold and hot water.

Consumers speak

A wholesaler,   Mr. Segun Olawale of L&K Stores,    located at hostel bus-stop, Egbe, Ikotun, Lagos,    said: “Due to different taste bud and choice of consumers,  Milo  is most demanded than  Ovaltine  and  Bournvita.

At Ikotun market, Lagos, a wholesaler, Madam Chidinma, said: “Milo  is the most demanded and preferred    due to its high quality. My customers prefer  Milo due to its sweet taste and    texture, I felt the texture myself and noticed it is smooth.”

According to most of the retailers who spoke to  C&M, their sales of beverages depends on consumers’ choices, where some prefer  Milo  while some others go for    Bournvita,  but  Milo,  according to them,   sells  most.

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