Local Demand and Market for Bakery Products in Nigeria
As far as bakery setup is concerned there is more than enough demand for bakery products. Take for instance the average Nigerian household spending from total income is 56% meaning out of every 1,000 naira earned by most Nigerian families in cities, 560 will be spent on food. That is according to a study from a reputable US based development Agency in 2017. Out of all consumed Nigerian staples bread remains one of the top 5 at least since 1960. This by implication means for a very long time Nigerians will continue to consume bread even as the population continues to grow. Besides bread, bakeries also produce biscuits, cakes and other confectioneries which are also in fairly high demand. To put in simply; there is a market for bakery products in Nigerian cities where more than 90% of all bakery products are produced and sold. But where there is money, you will find a rush. The competition in this business is very stiff and the profit margin has had to drop as a result making it less profitable for most operators but the real issue remains will there ever be a unique touch to your bakery product that will create a special demand? You can still make a lot of money from bakery business by innovating your brand and products in a very competitive market.
Opportunities for Bakery Operators in Nigeria
Supplying bulk buyers with bread, cakes, rolls and other confectioneries is an opportunity some bakery operators are taking advantage of. Locating your bakery in close proximity to these bulk buyers can boost your sales significantly and also lower your marketing expenses. For this reason one should establish his bakery closer to his or her target market. Another factor to consider is income spread of target market. There is changing demand for bakery products based on lifestyle and needs and people with higher incomes tend to higher tastes and expectations.
Below a list of potential bulk buyers of Bakery products
Niche Market
|
Description
|
Boarding
Schools
|
Bulk purchases for students’ breakfast or dinner
usually order for 30 to 200 or even more large loaves at a time
|
Supermarkets
|
Buy between 5 to 60 loaves per day
|
Orphanages
|
Buy occasionally but depend on donations
|
Churches
|
Host events a lot and would typically serve snacks
and other light confectioneries
|
Corporate
Organisations
|
For corporate launches, workshops, seminars, events
etc they could order sausages, cakes, biscuits etc
|
Eateries
|
Stock almost every confectionery
|
Grocery
Shops
|
Corner shops, road side sellers, kiosks etc
|
Neighbourhood
Retail Marts
|
Shops stocking consumables especially edibles
|
Open
Air Markets
|
Popular busy markets with many petty traders
|
These are some of the opportunities that new entrants into this market can explore along with many others still existing side by side emerging market trends, marketing innovations and changing consumer tastes and demand (more on this at the end of this article).
Startup Requirements for Standard Bakery Business in Nigeria
Item
|
Cost (
|
Factory
Building (2 year rent on 3 bedroom bungalow)
|
3,240,000
|
Bakery
Machinery
|
3,600,000
|
Delivery
Van
|
2,800,000
|
Office
and Shop Furniture (including storage racks)
|
800,000
|
Registration
and Legal expenses
|
480,000
|
Branding
and Printing
|
300,000
|
Marketing
Expenses
|
300,000
|
Salaries
(12 months)
|
6,000,000
|
Stock
of Ingredients
|
450,000
|
ICT
and Electronics (Office PCs, POS machines etc)
|
318,000
|
Electronic
Gadgets (1 Fridge, 1 deep freezer, oven etc)
|
450,000
|
Other
Admin Costs (12 months)
|
3,600,000
|
Other
Expenses
|
900,000
|
Total
|
23,338,000
|
1st Year Profit and Loss Statement
Gross sales
Cost of Sales
Operating expenses
Profit before Tax
Taxation
Profit after Tax
Dividends
Retained Earnings
|
69,120,000
48,840,000
11,720,000
8,560,000
2,568,000
5,992,000
3,000,000
2,992,000
|
For a more detailed and bankable bakery business plan in Nigeria you can contact me on: 0803 206 4106 or email me: Paulonwueme@gmail.com
