Global Ingredients would like to further establish on the markets where current operations are taken place but also on new growing markets in SSA. Global Ingredients would like to allocate
comprehensive resources on growing in this region and Global Ingredients is currently in the process of selecting markets for further business activities.
Additionally new trends in the market appear and women begin to work more and more and thus do not shop as usual, which creates new opportunities for Arla. Consequently it is important to be attentive to new trends in the societies.
Previous experience in Africa
Arla has been supplying many different markets in Africa and has especially great knowledge on the Nigerian market. This is particularly an experience that Nigeria Global Ingredietns draws on when estimating the market conditions that challenge business operations or can enhance sales. Field visits are necessary to assess the market potential.
2. What role do collaborators play on the African market?
A great network is always important and essential in order to gain success on a market. Arla collaborate with other Danish companies for example when evaluating potential partners. Good relations to other Danish companies are always important to have. Fanmilk is quite large in the region and they are certainly interesting to check out in detail.
3. Who are Arla Foods‟ competitors on the African market – and why?
We are directly in competition with Frieslandfoods (affiliate of Royal Friesland Foods of The Netherlands http://www.frieslandfoods.com/en/frieslandfoods/Pages/default.aspx ) and their
products such as Peak Evaporated and Powdered Milk, Peak Sweetened Condensed Milk, Peak 1-2-3 Growing Up Milk, Peak 4-5-6 Growing Up Milk, and Three Crowns Evaporated and Powdered Milk. Friesland Foods is active in Europe, Africa, South America, the Middle East and South East Asia.
It is the first manufacturer of evaporated milk and the market leader in the introduction of fortified based milk products in Nigeria. They have been in Nigeria for 30 years. Friesland Foods WAMCO Nigeria PLC is also deeply committed to improving the lives and welfare of its customers and communities across the country. Over the years, the company has proven itself an excellent corporate citizen by supporting schools, charities and communities across Nigeria.
http://www.frieslandfoods.com.ng/aboutus.asp?menu=about
Promasidor (http://www.promasidor.com ) - was founded in 1979 by Robert Rose, who left the United Kingdom in 1957 for Zimbabwe to pursue his African dream. They achieve consistent quality, value and satisfaction by focusing on core brands. Today, therefore, Promasidor‟s energies are focused on three fast-moving consumer goods categories, namely: Dairy; Beverage and Food Enhancement.
In comparison, DANO is a premium product, and Arla will not compete on price beneath NIDO (Nestle).
4. Would You elaborate on the criteria for an attractive market (population, consumption of powdered milk, purchasing power, import barriers, religion etc.) in Africa?
We do not know the markets enough but statistics on import, population and economic growth and the political systems tell us in which direction the markets are headed. Knowledge about
infrastructure is also incredible important.
5. Could you elaborate on the focus on Western Africa vs. Eastern Africa?
We have much more experience in the West African market.
6. Who is Arla Foods supplying to on the African market?
5 % through supermarkets, 95 % through small dealers. This happens through agents and
distributors. Today there are greater demands on the distributor and one has to document the sale both geografically and segment wise because AF strive to target the most affluent target group.
7. How are Arla Foods‟ products tailored to the African market?
They are tailored and adjusted in terms of smaller packaging and replacement of milk fat with vegetable oil for less expensive products. The crisis in the food industry has meant that Arla has to offer products that are cheaper.
8. What products are sold on the African market – what is the largest product/brand?
The products for children are in great demand and have very large potential. Though there are limits concerning the promotion of products for babies. Companies are not allowed to market products targeted for children under the age of one and it is important for Arla that our partners comply with the rules. Otherwise this can lead to poor publicity and have a relapse effect in the home market.
Infant formula is sold at the pharmacy by prescription only.
The products of Global Ingredients are in the category of full-cream, skim and light milk.
Skim milk is sold in Nigeria – both packed in DK and in Nigeria. It is difficult to pack skim milk products because of its texture and has a longer production time, which raises the expenses. Full milk (that is coolcow) has a great potential – targets the middle and lower segments. DANO targets the upper middle segment. So it is possible to sell the products simultaneously as they target
different segments.
Nigeria is a focus market and the largest market for full-cream powdered milk in 25 kilos bulks.
The partners repack the products down to 10 grams (began in 2001), and also packages for retail a 180 grams, 400, 900 grams. The distributor buys the cans from AF. On this market Arla has expanded its product line with the new ”coolcow”, with vegetable fat instead (as with feta and kærgården, that also makes up a mixed product). It is a less expensive and healthier product, a good nutritional product and at a price suited for the market and the food industry crisis. The only
difference is in the flavour, the products do not taste as much.
The packaging also takes place in Nigeria because it is less expensive due to the lower VAT of 5% a bulk per large package and 20% on small packages. The freightage is also cheaper when sending in bulks and the packaging charges small in Nigeria.