Peanut butter is a popular food spread made from roasted peanuts. This study evaluates the market opportunity and feasibility of establishing a commercial peanut butter manufacturing facility in Nigeria.
Market Outlook:
Nigeria is a significant producer of peanuts (groundnuts), with a potential output of approximately 6 million tonnes.
The global peanut butter market was valued at $3.11 billion in 2020 and is expected to grow at a CAGR of 6.6% from 2021 to 2028
Peanut butter consumption is rising due to its popularity as a versatile food product.

Market Size and Trends:
The Nigeria peanuts market includes various forms such as raw, roasted, blanched, powder, and others.
Peanut butter is a key application, along with direct consumption and use in bakery and confectionery products
Drivers and Challenges:
Drivers:
Growing health consciousness among consumers.
Peanut butter’s versatility in cooking, baking, and snacking.
Expanding retail channels, including hypermarkets, supermarkets, and specialty stores.
Challenges:
Competition from other spreads and edible oils.
Price fluctuations due to raw material availability and production costs.
Market Segmentation:
Forms:
Peanuts are available in various forms: raw, roasted, blanched, powder, and others.
Each form serves specific culinary purposes.
Applications:
Peanut butter finds use in households, bakeries, and confectioneries.
It’s a staple for sandwiches, snacks, and cooking.
Distribution Channels:
Hypermarkets, supermarkets, convenience stores, and specialty stores play a crucial role in peanut butter distribution3.
Price Trends:
Peanut butter prices may fluctuate due to supply-demand dynamics and production costs.
Consumers’ willingness to pay for quality and health benefits influences pricing.
Project Overview:
This project proposes the establishment of a modern food processing plant dedicated to the production of high-quality peanut butter in Nigeria.
Key Features:
Production Capacity: 1,000 metric tons per year (initial capacity)
Location: Shagamu, Ogun State - Strategically chosen for: Easy access to a reliable peanut supply chain
Excellent connectivity to major urban markets for efficient distribution
Product Focus: Smooth and crunchy peanut butter varieties
Emphasis on using locally-sourced peanuts to support domestic agriculture
Quality Standards: Implementing internationally recognized food safety standards (HACCP) and achieving NAFDAC certification to ensure product quality and consumer safety.
Marketing Strategy: Focus on premium quality, appealing to health-conscious consumers
Offer competitive pricing to reach a wider audience
Implement innovative and attractive packaging to stand out in the market
Project Justification:
Market Potential: The Nigerian peanut butter market is experiencing significant growth due to rising demand for convenient and healthy food options. Abundant local peanut production presents a cost-competitive advantage.
Competitive Advantage: Emphasis on high-quality production standards will build brand trust.
Affordable pricing caters to a broad consumer base.
Innovative packaging attracts attention and differentiates the product.

Overall, the Nigerian peanut butter market offers a promising environment for new entrants. Abundant raw materials, rising demand, and a growing preference for healthy and convenient food create a fertile ground for success.