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BUSINESS STRATEGY
Helping clients avoid Nigeria’s forex woes is now a marketing tactic
By our African Marketing Confederation News Team | 2024
Businesses serving the high-potential snacks market emphasise local R&D and manufacturing as a way to manage costs and avoid forex exposure.
As Nigerian businesses continue to struggle with foreign exchange problems, companies that can offer services which avoid or limit forex exposure are finding that this can be a useful marketing tactic to attract new customers.
One such example is Freddy Hirsch Nigeria, a food-seasoning manufacturer that develops local flavours for snacks products.
In November 2023, the company announced it was expanding its production and application facilities in Nigeria. Its product portfolio would now include stabiliser and texture systems, bakery, and sweet-flavouring ingredients.
Since then, it has made a point of emphasising its lack of foreign exchange exposure, thereby enabling it to keep its costs down for services offered to clients.
Freddy Hirsch Nigeria
“As the preferred partner of choice to local and global food and manufacturing companies in West Africa, we empower our customers with locally sourced materials and non-forex exposure,” the company states on its website.
“With this, customers can save their forex for more critical purchases and procure their raw materials in Naira.
“For many food companies, sourcing ingredients and spices abroad is no longer the default model. Companies must develop an end-to-end supply chain management that reflects a wider pool of suppliers, including regional ones while keeping larger strategic stocks.”
MD emphasises affordable costs due to non-FX requirements
In a statement made in June to Nigerian newspaper The Punch, the Managing Director of Freddy Hirsch Nigeria and West Africa, Kojo Brito, emphasised that “Freddy Hirsch Nigeria continues to develop authentic local snack flavours at the most affordable costs, given its non-FX requirements”.
According to Trend Type, the London-based emerging markets consultancy, Freddy Hirsch is among a number of ingredients companies that have established either R&D sites or manufacturing facilities in Nigeria in a bid to move innovation closer to what will eventually regain its title as Africa’s largest consumer market by value.
Says Trend Type: “The key attraction of Nigeria is threefold: the size of the domestic market; the influence of Nigerian taste preferences on the wider market in West Africa; the growing influence of Nigerian cultural inflections, often via diaspora groups in markets like the UK and the US.
“Freddy Hirsch’s MD in Nigeria believes that the snacks market in Nigeria will have almost doubled in size just between 2021 and end 2024 and identifies street food, healthy snacking and the changing preferences of millennial consumers as key factors impacting change.”
Foreign exchange difficulties, including an inability to repatriate profits, are an ongoing concern for businesses in Nigeria that have foreign ownership or offshore shareholders. Many of them, including large multinationals, have chosen to exit the country or significantly reduce their Nigerian business operations.
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