...FMCG Firms Poised for Recovery After Two Years of Margin Erosion
After enduring two years of economic turbulence, Nigeria’s Fast-Moving Consumer Goods (FMCG) sector is finally seeing signs of relief as inflation eases and the naira stabilizes. The currency, which lost 41% of its value in 2023, has begun to firm up, reducing foreign exchange (FX) losses and boosting domestic consumption—a welcome development for an industry battered by soaring costs and shrinking margins.
Macroeconomic Tailwinds Offer Hope
Recent data from the National Bureau of Statistics (NBS) shows inflation slowed to 23.18% in February, down from an average of 32% in 2023. Meanwhile, the Central Bank of Nigeria (CBN) reported that the naira strengthened to ₦1,531.25 per dollar on Monday, marking a 0.4% gain from the previous week.
Analysts at CardinalStone Research project a sector-wide recovery in 2025, citing improving macroeconomic conditions. “Declining inflation, moderating fuel prices, and a more stable exchange rate should ease input cost pressures and boost household spending,” they noted.
Mixed Fortunes for Major Players
A review of five leading FMCG firms—BUA Foods, Unilever, Nestlé, Dangote Sugar, and Nigerian Breweries—reveals a tale of resilience and challenges.
BUA Foods: Record Revenue Despite FX Losses
BUA Foods posted its highest-ever revenue of ₦1.53 trillion in 2024, more than double its 2023 earnings. Despite a ₦178 billion FX loss, pre-tax profit surged by 162.9% to ₦284.3 billion, driven by strong demand for sugar, flour, and pasta. Managing Director Ayodele Abioye attributed the performance to strategic pricing and expanded distribution.
Dangote Sugar: Deepening Losses on High Costs
Dangote Sugar Refinery, however, saw its net loss widen to ₦192.6 billion, up from ₦73.8 billion in 2023, as raw material and FX costs soared. Analysts remain optimistic that the naira’s stability will help the company rebound in 2025.
Unilever: Steady Profits on Strong Nutrition Sales
Unilever Nigeria maintained profitability for the fourth consecutive year, with after-tax earnings hitting ₦15.1 billion in 2024. Revenue climbed to ₦149.5 billion, led by a 46.8% jump in nutrition sales. The firm’s decision to divest its underperforming home care segment in 2023 has paid off, allowing it to focus on high-margin products.
Nestlé Nigeria: Revenue Soars Despite Profit Dip
Nestlé’s revenue surged 75% to ₦958.8 billion, though net profit fell to ₦164.5 billion due to FX pressures. The company returned to profitability in Q4 2024, signaling a potential turnaround. Analysts forecast revenue could hit ₦1.05 trillion this year if the naira remains stable.
Nigerian Breweries: Revenue Growth Amid Losses
The country’s largest brewer saw revenue jump 79% to ₦1.07 trillion, but net losses deepened to ₦144.33 billion. The company cited naira devaluation and high inflation but remains hopeful, citing cost-saving measures and its recent acquisition of Distell Wines and Spirits Nigeria.
Outlook: Cautious Optimism
While challenges persist, the sector’s prospects are brightening. Juliet Anammah, Chair of Nigerian Breweries, noted that declining interest rates and policy stability should improve access to financing and spur growth.
For FMCG firms, 2025 could be the year of recovery—if the naira holds firm and inflation continues to cool. As consumer spending rebounds, companies that adapted during the downturn are now best positioned to thrive.