Why Maggi Cube is Wildly Successful in West Africa
Over the summer, I met with two private equity investors visiting Côte d’Ivoire for the first time. They had a litany of questions: What is the political stability like? How about corruption? Are there talented human resources?
We spoke at length about agriculture, my area of expertise.
Even before I had a chance to order my coffee, they zeroed in on the key question: Where do you see opportunities in the local agribusiness and agricultural commodity sectors?
Steer away from historical cash crops, like cocoa, and look into food crops, I suggested. Look at what Ivorians are eating. Foodstuffs for local consumption, sold at a competitive price point, are the low-hanging fruit.
In hindsight, I could have boiled my response down to one word: Maggi.
Unlocking the secret to Maggi’s success in West Africa
Maggi is a seasoning sold in cube or tablet form that is ubiquitous in West Africa. It’s laden with salt and MSG. To complement a range of dishes and palates, Maggi comes in beef, chicken and shrimp flavors. Manufactured by Nestle, Maggi is likely the Swiss food giant’s best selling item in the region.
Maggi has a powerful agro industrial business model that makes it widely successful in Africa and elsewhere: the production of affordable foodstuff at extremely low cost for the mass market.
Firstly, Maggi is produced in Côte d’Ivoire using local ingredients. Given the composition of the cube (salt, MSG, hydrogenated vegetable oil and starch), this is not too complicated.
Like all consumer goods, the company needs to sell a ton of Maggi cubes in order to turn a profit. Given the sheer sales volumes, production costs are ridiculously low, allowing the company to keep retail prices low.
Even poor Ivorians, living on less than a $2/day, can afford Maggi cubes. My friend, who lived in the dusty north of Côte d’Ivoire, once remarked that, unlike the north, you couldn’t buy much for XOF 25 (USD .04) in Abidjan. To the contrary. At this price, you can buy a minuscule Maggi cube. This is proof that like West Africa’s other successful consumer goods companies Maggi can package its cubes in extremely small quantities, thereby winning over cash strapped consumers.
Moreover, Nestle’s large investments into marketing have turned generations of West African into loyal consumers. Its slogan in the region “Make every woman a star!” (Avec Maggi chaque femme est une étoile in French) is catchy. It’s hard to not spot a female cook at a maquis wearing a yellow-and-red Maggi apron while tending to chicken or fish on the grill.
For these reasons, Maggi cube has reached the pinnacle of commercial success in West Africa, becoming the de facto name for a seasoning cube, like Kleenex in the United States. Favorite West African recipes just cite “Maggi cube” as an ingredient.
Because it gives such an indispensable taste to local cuisine, Africans commonly claim that Maggi is a local ingredient. It turns out that Filipinos, Poles and Germans believe the same thing as this PRI article notes.
Competition is heating up in the market
Although Maggi cube is the indisputable market leader, its success has spawned a legion of local rivals, which have developed their own followings. Despite being a simple cooking ingredient, bouillon cubes use different ingredients, inspiring fierce consumer loyalty.
For instance, the top reviewer of Pierre Thiam’s Senegalese cookbook Yolele! on Amazon urges those dabbling in Senegalese cooking to stock up on Jumbo cubes to get the “real taste of Dakar”.
Because it is a buoyant market, there is a plethora of local companies (all Lebanese-owned) that have gotten into the business. Senegal’s local agribusiness champion, Patisen, has its Doli brand while Eurolait produces the Maxi Gout brand in Côte d’Ivoire.
Multinationals are challenging Nestle as well. Unilever’s Knorr poses competition in Nigeria, and the Spanish foods company, GB Foods, eats into market share throughout West Africa with its Jumbo brand.
And if the market weren’t crowded enough, another Lebanese-owned foods company is preparing its own seasoning cube for the Ivorian market. If the Lebanese are still rushing into the market, it is a telltale sign that there is money to be made.
But, it appears that the market is approaching saturation. How many more brands of seasoning cubes does West Africa need? The savvy investor will look for the next mass-market food product that follows the Maggi cube model.