Key performance indicators or KPIs are essential for businesses of all sizes to quantify their progress against key goals. By measuring success against KPIs, businesses can see the impact of their strategies over time and identify areas of weakness or opportunity, with insights that are backed up by actual data rather than assumptions. KPIs allow managers to better focus their employees work and adapt if certain goals are not being met, and the more often they are measured, the more quickly businesses can see if they are off track and change course. Common KPIs for marketers might include website metrics such as unique visitors and bounce rate, while sales-focused KPIs often include revenue numbers, lead conversion rate, and sales cycle length.

Of course, KPIs are also tailored to industries, with certain industries placing more emphasis on certain metrics than others. Humanitarian aid groups, for example, may measure vaccination levels in a specific region, or the accessibility to clean water, while brands focus on their awareness and perception among key audience groups.

FMCG and CPG KPIs

Fast-moving consumer goods (FMCGs) and consumer packaged goods (CPGs) such as snack foods, soft drinks, cleaning products, and cosmetics, make up more than half of all consumer spending, and FMCG companies have a huge number of KPIs to track – each product they sell, region they sell in, and even store location may have unique KPIs. FMCG companies also examine the supply chain that gets their goods from the raw materials to the store, in order to identify inefficiencies, costs, and other issues within the supply chain. FMCG KPIs often include metrics such as:

• Stock levels per store
• Average time to sell
• Product margins
• Shelf visibility and availability
• Supply chain costs
• Fulfillment metrics
• Brand preference vs competitors
• Sustainability information

Measuring these metrics includes detailed analysis of point-of-sales data from stores and regions, deploying secret shoppers to take pictures of goods and note expiration dates of products, and gathering data on every part of the supply chain. In order to measure some KPIs, such as those around sustainability, FMCG and CPG brands may even need to reach those farming the raw ingredients for their product, such as coffee, tea, and cocoa beans. Gathering data from this last mile of the supply chain can often be challenging due to how disconnected individual farms often are from the brands selling their goods- and this is especially the case in regions such as Africa, where smallholder farmers make up the majority of the farming population.

Measuring Fast-Moving Consumer Goods KPIs in Africa

The FMCG market is huge in Africa: Two-thirds of the continent’s $1.4 trillion retail spend in 2016 was on FMCG, and brands such as Unilever, Diageo, and Coca Cola are investing heavily in the region. Africa is reported to have the fastest-growing beer market in the world, and Diageo recently announcing a $200 million investment into breweries powered by renewable energy across Africa.

But with this investment have come unique challenges associated with quantifying progress against FMCG KPIs in countries such as Nigeria, Kenya, and South Africa. Many goods in Africa are sold through informal trade markets and street hawkers who do not have the advanced point of sales systems that are present across the US and Europe, so large brands have little insight into where their products are sold, how much inventory each vendor is carrying, and how their products are placed compared to competitors. Rather than relying on data reports from chain stores, they must gather data themselves from thousands of individual sellers.

Until recently, this has been a nearly impossible feat due to the lack of communication with these sellers, but as mobile penetration has grown in cities such as Lagos and Nairobi it has become more feasible to collect data on KPIs from dispersed sellers. Through mobile-phone surveys, FMCG brands can gather data directly from informal traders by sending regular surveys asking about stock levels and pricing. GeoPoll can also deploy consumers to store locations to take pictures of goods as they are on shelves, giving brands a more accurate depiction of their goods than they have had before. Focus groups, traditionally conducted in-person, can also be conducted via the mobile phone so that FMCGs can get rich, qualitative data on how consumers are using their products.

As technology adapts and improves across Africa and the rest of the globe, FMCGs will have even more data points with which to measure their key performance indicators. To learn how GeoPoll can deploy innovative solutions for KPI tracking in Africa and other emerging regions, contact us today.

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The hyper-competitive world of fast-moving consumer goods (FMCG) —goods that are easily produced, packaged, sold, and consumed (i.e., food, beverages, snacks, toiletries, etc.) — relies on narrow profit margins, competitive branding, and global reach. Since most FMCG companies produce and ship similar products, the majority of their profit margin is driven by either branding or scope.

For many companies, the latter (scope) is one of the quickest and most viable ways to boost profit lines without significant infrastructure or marketing investments. But, as globalization takes heed and new, fresh markets are slowly dripping away, trying to position your products to new customers can be difficult.

Today, we’re going to look at how FMCG brands fare in the African market and why it may be the most significant driver of international FMCG profits in the coming years.

Understanding the African FMCG Market

For an FMCG brand to thrive in a region, it must have one or more of the following key attributes.

1. A dense population
2. The spending power to purchase cheap goods
3. An understanding of their brand competition
4. Supporting infrastructure to facilitate sales

Looking at Africa as a region for FMCG investment, it’s crucial that we take these attributes into account.

Africa’s Population Density and Infrastructure

Since FMCG brands operate on a narrow profit margin, they rely on heavy consumption to turn a profit. This means that any FMCG brand is going to need to know that they are expanding to an area that’s both growing and dense enough to accommodate their products.

According to McKinsey, by 2025 Africa is expected to have over 100 cities of 1 million or more people, and by 2030 Africa’s population (currently estimated at 1.1 billion) will double, with 80% of that growth happening in cities. While Africa, as a whole, is still a more rural continent than North America, Latin America, and Europe, as youth move out of the countryside and into cities, many countries in Africa are becoming increasingly urbanized. This is especially the case in cities like Lagos, whose population has increased by 100X since the 1960s and is expected to become the world’s largest metro area by 2100.

From these figures it is clear that urbanization is on the rise in Africa, and therefore zones of urban consumption are rising heavily across Africa.

Africa’s Spending Power

Africa is in a prime position to dominate the FMCG market: 2/3 of Africa’s $1.4 trillion retail spending in 2016 was on FMCG goods – which dominate almost all of Africa’s household expenses. In addition, with the Economist Intelligence Unit expects this FMCG spending will continue and increase in viability through 2030, and Africa is probably the single most profitable sector for FMCG spending expansion bar East Asia.

Now, let’s look at branding competition, which can be extremely difficult to measure. The first, and most complicated, issue to note is the dominance of informal outlets for consumer goods in Africa. In fact, Africa’s speedy growth in the FMCG area is far higher than predicted, since most FMCG spending still occurs in informal settings which can be extremely difficult to measure using traditional research methods. This presents both a challenge and an opportunity for FMCG brands. The challenge is that brands must overcome significant infrastructure and bureaucratic barriers to create a significant brand presence in Africa. However, if brands are able to successfully root themselves in the African market, there are opportunities to build strong brand loyalty, as competition is often thinner than in more developed markets.

One example of this is the alcoholic beverage industry in Africa, which has recently been rising. Local authorities in Nigeria have been removing many local breweries and home-grown liquor producers from the supply source of Africa over the last few years, and because of this, Nigerian Breweries and Guinness Nigeria have been able to dominate the market with a combined market capitalization of over $8.4 trillion. Across the continent, multinationals including SABMiller, Diageo, and Heineken have been making large investments into growing their African portfolios, and are now some of the highest valued corporations in markets such as Kenya.

FMCG Research in Africa

Infrastructure and regulatory barriers, along with a lack of information on brand loyalty, product preference, and consumption through informal markets are friction points for introducing FMCG goods into the market, but when overcome brands can build strong customer bases in areas with little competition. While it has traditionally been difficult to gather up-to-date research on FMCG goods consumption and brand affinity in Africa, using GeoPoll’s mobile survey methods it is possible to gather accurate data on the FMCG market throughout the continent.

GeoPoll works with leading FMCG brands to help them track product and brand preference, test new concepts or marketing messaging, and much more. In addition, GeoPoll can reach market traders in order to gather data on the informal trade markets that make up a large portion of African spending. Africa already has dense urban populations and a growing consumer class, and by leveraging GeoPoll’s market research services FMCG brands can gather the information they need to make informed decisions regarding their growth. If your brand is interested in exploring expansion in Africa, please contact us today to learn how we can help you explore growth throughout East, West, and Southern Africa.

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