The bread bakery industry in Nigeria is predominantly led by unpackaged/artisanal producers, holding a 53% share of total current value sales. However, there is a noticeable shift towards specialized bread consumption, which is expected to reach 105% in 2014, driven by consumer preferences for convenience and healthier options. In Lagos alone, over 3 million loaves of unpackaged bread are sold daily, highlighting the substantial market demand.
Our feasibility study focuses on seizing the opportunity presented by the growing specialized bread market. The project aims to fill the gap in this segment, catering to consumers' desire for nutritious and convenient baked goods. The profitability outlook for specialized bread is promising, with higher profit margins compared to commonly distributed bread.
The startup cost, excluding land and building but including working capital, ranges from 1.5 to 3 million Naira, depending on the manufacturing scale. This cost estimate encompasses one month of working capital. With efficient management practices, the payback period is expected to be within a year.
Key factors contributing to the profitability of specialized bread include its premium pricing and the potential to achieve a gross profit margin of 65% on sales. This underscores the financial viability and attractiveness of investing in the specialized bread segment within the Nigerian bakery industry.
In conclusion, this feasibility study highlights the lucrative opportunity in the specialized bread market, offering investors a pathway to capitalize on evolving consumer preferences and achieve sustainable profitability in the bakery sector.