Description

Ice cream is a frozen dessert made from a combination of milk, cream, sweeteners, and flavorings, which is churned while freezing to incorporate air and achieve a smooth texture. It can also be produced using non-dairy ingredients for consumers with dietary restrictions or preferences.

In Nigeria, ice cream is rapidly gaining popularity, particularly due to the country’s hot climate, rising urbanization, and an expanding middle class. As more Nigerians adopt Western consumption habits, the demand for indulgent and refreshing products like ice cream continues to rise.

The global ice cream market has shown consistent growth over the years. In 2024, the global market size was valued at USD 78.57 billion. Looking forward, market research from the IMARC Group estimates that this figure will increase to USD 102.38 billion by 2033, representing a compound annual growth rate (CAGR) of two point ninety-five percent (2.95%) between 2025 and 2033.

This growth is being fueled by changing dietary preferences, increasing demand for premium products, and rising health consciousness. As more consumers seek healthier versions of their favorite treats, the industry is responding with options that include low-fat, low-sugar, and plant-based ice creams.

Additionally, there is increasing experimentation with local and exotic flavors, helping to expand product appeal globally and in emerging markets such as Nigeria.

In the Nigerian context, the ice cream market has evolved significantly. Historically, ice cream was largely consumed by a small segment of high-income earners and expatriates. However, over time, local brands emerged, and production scaled up to serve wider demographics. The growth of quick-service restaurants, modern retail chains, and mini-marts across urban areas has further popularized ice cream. In recent years, premium and artisanal offerings have also become more accessible to middle-income consumers.

According to market estimates, the Nigerian ice cream market is projected to reach USD 1.75 billion in retail prices by 2025. This represents a robust compound annual growth rate (CAGR) of fifteen point eight percent (15.8%) per annum between 2020 and 2025. Furthermore, the market is expected to achieve incremental gains of USD 66.1 million over the next five years, with growth approaching fifteen point three percent (15.3%) annually.

This upward trend is driven by population growth, increasing consumer incomes, and a youthful demographic with a growing appetite for western-style fast food and frozen treats. Notably, the demand for ice cream paste—a concentrated base used in industrial ice cream manufacturing—is also on the rise, as more manufacturers scale up production to meet market needs.

Some of the major companies operating in the Nigerian ice cream industry include multinational and local players. Brands like Fan Milk, owned by Danone, have built extensive distribution networks nationwide. International franchises such as Cold Stone Creamery have gained significant market share among the urban middle and upper class due to their focus on premium offerings.

Local producers and quick-service restaurants like Tantalizers and Sweet Sensation also manufacture and retail ice cream, especially in packaged formats. These players are increasingly investing in modern equipment and expanding their product lines to include yogurt, frozen desserts, and functional snacks.

The regulation of ice cream production in Nigeria is handled by the National Agency for Food and Drug Administration and Control (NAFDAC) and the Standards Organization of Nigeria (SON). NAFDAC ensures that ice cream products are safe for consumption, hygienically processed, and properly labeled. SON develops and enforces product and industrial standards to maintain consistency and safety. Compliance with these agencies is crucial for businesses seeking to enter or remain in the market.

Despite the promising outlook, ice cream production in Nigeria is not without its challenges. The most significant of these is the unreliable power supply, which affects the preservation and transport of frozen goods.

Ice cream production requires cold-chain logistics and consistent refrigeration, both of which depend heavily on electricity. Many producers are forced to rely on diesel generators, which increases operational costs. In addition, imported raw materials such as emulsifiers, stabilizers, and ice cream paste attract high import duties, making local production more expensive. Inflationary pressures also affect packaging and transportation costs, while limited local sourcing of dairy ingredients restricts vertical integration for many producers.

Nevertheless, the prospects for the industry remain strong. With improved infrastructure, strategic investments in cold chain systems, and the development of locally sourced ingredients, the Nigerian ice cream sector is poised for continued growth. There is also room for innovation through the introduction of functional ice creams with added health benefits such as probiotics, vitamins, or lower sugar content.

Furthermore, underserved markets in Northern Nigeria and rural areas present expansion opportunities for producers willing to navigate logistical challenges.

Ice cream production in Nigeria presents a high-growth opportunity for entrepreneurs, manufacturers, and investors. The combination of a hot climate, increasing urbanization, and a youthful population creates a fertile environment for market expansion. Although there are infrastructure and cost-related challenges, ongoing investments in production facilities, distribution, and branding are likely to further accelerate market penetration.

With proper adherence to regulatory standards and a focus on product innovation, Nigeria’s ice cream industry can continue to scale and compete both locally and regionally.

This report is to examine the financial viability or otherwise of establishing a ice cream plant in Enugu State, Nigeria.

The proposed capacity of the plant is ten (10) tons per day and the plant would operate at eighty percent (80%) of the installed capacity for double shift of eight (8) hours per day and three hundred (300) days per annum.