Dano in the driving seat
“Powder is powering Arla’s growth in Sub-Saharan Africa, but we need to diversify our portfolio to continue to grow,” explains Steen Hadsbjerg, head of the region, as he talks about Arla’s ambitions, the highlights and challenges.
Steen, what highlights would you like to share from the SSA region
I’ll take Nigeria first, which is our lead market in the region, and in good growth. Since September 2015 we have gradually increased our presence in the country’s milk powder market with our Arla Dano brand. It’s gone from having a 6-7 per cent share to a 21 per cent share today and we have a target of 23 per cent for next year. We’ve taken a brand that was well known in the city of Lagos and elevated it to a country-wide brand, but there is still major room for expanding in the East and North of the country. I’m really pleased to say that we are tracking ahead of our business case in terms of volume and market share but we need to improve the financial performance. Our position in the marketplace is improving and the marketing team has made a tremendous effort in building our online presence and I must take this opportunity to once again congratulate the team in Nigeria for breaking the Guinness World Record for the longest drink pouring relay with Dano! A truly fantastic achievement and fabulous event.
As a responsible company we also aim to stand out from competitors in Nigeria through our strong involvement in the Milk Way to Development project. We are collaborating with a number of local organisations to develop a socially, environmentally and economically sustainable market for milk in West Africa. We are also working with local dairy farmers and cooperatives (LINK to previous article) through engagement with both local farmers and through involvement in reviving the dairy value chain.
Arla Foods wants to contribute to initiatives that will stimulate local production dairy production, that create jobs and which develops Nigeria’s self-sufficiency in food production, and we believe that as a responsible company, we have a role to play in helping to contribute to the development of policies and initiatives that will improve the business environment for the Nigerian dairy sector, and that will allow foreign companies, which engage locally, as well as local businesses to thrive.
Beyond the Nigerian market , we have recently received the results of a retailer survey conducted in Dakar in Senegal. They are showing that Arla Dano now has almost 39 per cent of the milk powder category in the retail segment, a position that the local team should be proud of as we’ve achieved this in just over two years. Similar to the Nigerian market, there are major opportunities for growing in the powder segment and adjacent categories.
By positioning the Arla Dano brand very strongly in consumers’ minds in West Africa, we’re in a strong position to launch several new products in both the powder category and in new categories in 2019 and beyond.
We are seeing a slightly slower development in Dano’s growth in Ivory Coast than we anticipated. This is due to our joint venture partner reorganising its business, which has had an impact on the way we operate. We are currently in the process of finding a different operating model that will ensure we can continue our growth in this country, which is one of the fastest growing economies and markets in West Africa.
What’s in store for 2019?
Our main focus in 2019 will be to diversify our business as being present in only in the powder category is too risky. Right now we are conducting a trial of a new recombined, long shelf life, flavoured milk which we expect to launch in May 2019 in Nigeria. This will be the first in a range of
milk based beverages all made with locally recombined milk powder and local raw materials (sugar, vegetable oil and starch etc.). We will also see the first launch of our Growing Up Milk (GUM) range, which will be packaged locally in Nigeria
Also next year we will extend our range of flavoured milk powders across the markets and, here comes the cliff hanger… we are planning to expand our powder portfolio with several new products! The concept is currently being developed and we have strong expectations that we will be able to come up with something completely new for the market, that is currently unavailable, within the next year! Watch this space!
What does success look like in 2020 for SSA?
We have to deliver on our Good Growth strategy:Our primary objective is to deliver strong and profitable growth on the Dano brand and categories in Nigeria and adjacent markets. Number two is to have successfully broken into a minimum of one new category with a full range of liquid recombined products and finally, that we have successfully implemented the Milky Way to Development project. If we can deliver on these objectives I would be happy on behalf of the local team and myself.