“We believe by having more [water] plants across the country to serve communities and consumers close to the source brings down our distribution and adjust our prices [appropriately],” Darnesh Gordhan chief executive officer of Nestlé Nigeria told CNBC Africa.
Nigeria being the largest economy, with a GDP estimate of 503 billion US dollars, has set a goal to create inclusive economic growth.
It is believed that inclusive economic growth results in job creation and a rise in the middle-class allowing a larger market for consumer goods. In Nigeria there has been a rise of the middle-class which would equate to a larger market with buying power.
“The Nigerian consumer is a very smart consumer just like the other consumers around the world, our job is to provide the best value,” he said.
According to African Development Bank, the Nigerian middle class consisted of 23 per cent of the population and the average household had a monthly income range between 480 and 645 US dollars in 2011, currently this number is believed to have increased.
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However, the consumer goods market has its challenges. The increase in the middle-class has not brought much growth to consumer consumption in recent times.
“Concern is the potential revaluation of the naira which will have an impact on costs, the uneasiness before the election and the money flow has become tighter which has affected the man on the street,” said Gordhan.
The Nestlé team is more determined to take on the challenges and has explored of different ways of operating their business do develop the brand, Nestlé Pure Life.
“We see massive consumer opportunity in water. We have to think about innovation and renovation to [develop] our products to excite our consumer,” he said.
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Gordhan described the model of the water business as one which will situate the water source close to the market. This strategy will be implemented to avoid large distribution expenses as water plants will be built across Nigeria.
BY: THANDO MATUTU