St. Louis Sugar stripped bare

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St. Louis Sugar Stripped BareThere are just few phenomena that are truly outliers. Take the bumblebee for instance, that aerodynamically shouldn’t be able to fly because according to scientists; its wingspan is too small and its body it’s too heavy. Yet it pays no heed, going on to defy all notions about what its abilities should be.
In Nigeria one of such abstruse outlier is St. Louis sugar. You only need to look around to see its presence and look again to see that you had never seen any sort of ad or promotion anywhere for this brand. And so this begs the question; how are they doing it?

I was at a marketing workshop recently and the discussion was on why brands fail. The facilitator for this workshop was a seasoned marketing professional. One of reasons he called out for brand fails was lack of promotion and advertisement. Then one hand shot up in the audience. The woman asked the same question every marketing executive in Nigeria must have heard at one point or the other; why St. Louis sugar is still thriving without any form of promotion or advertisement?
“Hmm! this is one exception to the rule; it’s hard to explain…” the facilitator said. Picking his words carefully like a man chewing pomo on teeth severally ravaged by cavity. He would conclude that it was an outlier.

This struck a chord in me; it was the second time that month that someone had mentioned the brand and yet no one seemed to know much about what makes it that unique.
I decided to find out.
The findings will however not shock you. Thank you!

A background on St. Louis Sugar
St. Louis Sugar is produced by Saint Louis Sucre located in France. They are a member of the Suedzucker AG group the leading manufacturer of sugar in the world averaging 50000 tonnes of sugar production per day.
According to the United States Department of Agriculture (USDA), Nigeria produces less than two per cent of its requirement, estimated at 1.7 million tonnes. By the foregoing, it is clear Nigeria currently imports 98% of its sugar requirement.
Data obtained from the National Sugar Development Council (NSDC) also indicate that sugar consumption in 2012 was 1.1m tonnes against the domestic production of 10,843 tonnes.

Ban of sugar on retail packs
The Nigeria Sugar Master Plan which took effect on January 1, 2013, led to an outright ban on the importation of refined sugar in retail packs. But alias its Nigeria, the ban has been very effective; St. Louis is still everywhere and I suspect those supposed to enforce the ban probably drank it in their coffee this morning. Okay enough said!

Direct competitions to St. Louis

TM Family Sugar – McNichols Consolidated Plc
M Dogan’s Sugar Cubes by Dogan’s Sugar Limited
Golden Penny Sugar Golden Sugar Company
St. Louis Sugar is distributed by the MILAN group in Nigeria.

So what has aided St. Louis to its position of dominance?

1. Increasing population; this is huge. There are over 170 million Nigerians today from below a 100 million in 1991. To put this in perspective, in 2030, we would be on the right side of 300 million. Whew!

2. No strong competition. The argument is always “St. Louis sugar doesn’t do promotion and advertisement and yet still number one”. But am yet to see any significant promotion by any other cube sugar company in Nigeria. So this argument is misguided and in my opinion any retail sugar company that comes out with better value proposition and is able to communicate this effectively could push St. Louis sugar off their perch.

3. Economics of scale enjoyment; as a member of the Suedzucker AG group the largest sugar producer in the world, it enjoys massive economics of scale. Little wonder the local manufacturers still cannot compete despite the advantage granted to them by the Nigeria Sugar Master Plan. The Federal Government have made it possible for those that want to go into sugar production to import all the machineries, both for the field and the factory duty free. And when they start operation, to do business tax free for five years.

4. People will rather go for what has been tested and trusted than risk a few nairas on a product that’s relatively new.

5. Monopoly and first mover advantage. Growing up it was the only cube sugar brand that people consumed. It was widely distributed and hence it was hard to believe any other sugar brand existed in the cube sugar category.

Next stop? Maybe I will be writing on the decline of Aloma bitters in Nigeria or maybe a better title would be “sex sells; the emergency of a thousand and one bitters“(babyoku, Kerewa, Ibile Sappiro Osomo Koboko, Kogbebe, Ogidiga etc) see the connotations?

Please don’t ask how many of them I have taken.

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