Blog Post

Consumer Demand & Processed Food in Nigeria

This piece originally appeared on the A4NH blog.

Nigeria faces many of the same challenges confronting other low and middle-income countries today. Rapid development, high population growth, and rural-urban migration are leading to swelling cities and a new set of issues. Urban food demand is different from that in rural areas, as consumers seek more convenient foods, many of them processed, resulting in a quickly evolving food system. These consumers may also lead more sedentary lifestyles, making them susceptible to malnutrition in the form of overweight and obesity. At the same time, undernutrition also remains a substantial concern, particularly in rural areas, while micronutrient deficiencies are a persistent problem throughout the country.

Policymakers need information on what kinds of interventions can effectively combat these simultaneous challenges and ensure that people have access to healthy foods. To help inform those decisions, we used the Nigeria Living Standards Measurement Survey (LSMS) data, collected between 2011 and 2016, to examine how demand for food has evolved in recent years as well as how it responds to within-household fluctuations in welfare, focusing on both the level of processing and food eaten away from home.

Our research revealed a complex and nuanced picture of consumer demand for processed foods. We also identified several data shortcomings that need to be addressed to better understand the dynamics of these food systems before determining best courses of action and future policy interventions. Among the points of note:

  • Consumption of highly processed foods at home has been decreasing over time in Nigeria. However, trends differ by region, income level, and urban or rural location. This is in part a result of a decline in the overall value share of food consumed at home in recent years. These trends therefore have direct implications for how and where policies should target consumption of processed foods. For instance, a campaign promoting less processed ingredients for preparation at home may be less impactful than one that encourages people to use caution when choosing foods to eat away from home.
  • Though we find consumption of food eaten away from home has increased, we don’t know much about that food. While food consumed at home is typically extensively categorized, most surveys do not ask detailed questions about how this food eaten away from home is prepared, the level of processing it has undertaken, or even the quantity. Like most other surveys, the Nigeria LSMS simply records the meal category (eg. breakfast, snack, lunch, dinner) and the amount spent. A number of recent analyses have simply assumed that these foods are always highly processed, however doing so almost certainly overstates their estimates. These broad categories prevent us from knowing if the consumer was eating a piece of fruit, a boiled sweet potato, or a chocolate bar, although the nutritional differences are significant. Additionally, many vendors in Nigeria sell things like rice and beans or fresh fruit. Both would be categorized as highly processed if eaten away from home, but the same foods would be considered unprocessed or minimally processed if eaten at home.
  • When they have additional money, households increase their share of expenditures on food away from home but decrease their share of expenditures on highly processed foods eaten at home. This type of analysis is frequently used to guess at how diets will evolve with continued economic growth. Our analysis of within-household dynamics mirror national trends but also reveal important differences, depending on whether households are experiencing relative scarcity or abundance. While additional income in times of relative abundance go disproportionately towards food eaten away from home, food eaten away from home is reduced even more sharply by households in times of scarcity, while reliance on staples increases.
  • Many frequently used methods of estimating changing diets are unstable and poorly theoretically founded. Finally, we find the methodology used to measure food demand has a substantial effect on our measurements. We prefer theoretical rather than ad hoc specifications in our estimates and illustrate several issues that arise with other commonly-used approaches. Broadly, we emphasize that how one examines the data matters and can substantially shift the conclusions drawn from the analysis.

In this context, solid policy recommendations can best result from both improved data collection on foods eaten away from home and the use of models derived from consumer demand theory to understand the relationship between food purchasing and household income. A considerable volume of conventional wisdom around increasing demand for highly processed foods may rest on inadequate data for the purposes of understanding dietary intakes and problematic analytical approaches.

Alan de Brauw is a Senior Research Fellow and Sylvan Herskowitz is an Associate Research Fellow in the Markets, Trade, and Institutions Division at the International Food Policy Research Institute . This research was conducted as part of A4NH's Food Systems for Healthier Diets flagship. This post is based on their recent IFPRI Discussion Paper " Income Variability, Evolving Diets, and Demand for Processed Foods in Nigeria ."

Source: A4NH blog