Demand for Branded Sausage Rolls in Ibadan Metropolis

Covenant Journal of Business & Social Sciences (CJBSS) Vol. 9 No. 2, Dec. 2018

An Open Access Journal Available Online

Sowunmi Fatai Abiola & Magreola Dare Gabriel

University of Ibadan, Ibadan, Nigeria. Email: [email protected] [email protected]

Abstract: With increasing urbanization and population growth in Nigeria, demand for fast food has increased considerably. The market for sausage roll of different brands in particular has continued to expand attesting to its competitive market. The need to determine the factors influencing the consumers‘ expenditure on branded sausage rolls and the extent of sales inequalities among sellers prompted this study. These objectives were achieved using multiple regression and Gini coefficient/Lorenz curve analyses. The study revealed that buying and selling of sausage rolls were common among the youths. Despite the expansion in the sausage rolls market, less than 1% (0.69%) of the respondent‘s monthly income was spent on sausage rolls. Gala has the largest market share (25.8%) and highest inequality in sales revenue (0.30). Fifty percent (50%) of the gala sellers controlled about 71% of the total sales for gala in the study area. Age, marital status, year of education and monthly income of respondents were factors influencing amount spent on sausage rolls per week in the study area. Brand dominance can be reduced if other competitors increase their market penetration and embark on market segmentation based on age and locations. Keywords: Sausage rolls, Market share, Demand for fast food, Lorenz curve JEL: C01, D11, D41

1.0 Introduction foods could be raw or cooked, hot or Ready-to-eat foods can be described chilled and can be consumed without as the status of foods ready for further heat treatment (Tsang, 2002; immediate consumption at the point of Habib, Dardak, & Zakaria, 2011). sale and reasonably priced. Ready-to-eat Different terms have been used to

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48 describe ready-to-eat foods. These fast food industry has continually found include convenient, ready, instant and ways to make its products more fast foods. Examples of ready-to-eat accessible, with retail outlets appearing foods include pastries such as meat pie, in such varied locations as roadsides, sausage rolls, burger; moin-moin, salad motor parks, office buildings, or coleslaw, fried meat, fried chicken, department stores, and other public milk and milk products (Caserani & places. Fast food consumption is Kinston, 1974). In the last ten years, attributable to an increasing supply of lifestyle and eating patterns have convenience. changed and as urban lifestyles get The major cities in Nigeria with high increasingly hectic, people no longer population density comprised of urban, have enough time to cook meals at semi urban and a few areas that are pre- home, this has led to a gradual increase urbanized. High demand for food in demand for snack foods. Since these including fast food (sausage roll) is snacks and fast foods are readily common among residents and transiting available, many of the urban travellers in these locations. According residents, especially the middle class, to Jekanowski et al. (2001), a the youth and the children, obtain a distinguishing characteristic of fast food significant portion of their diet from is its convenience. Consumption snacks and fast foods sold cheaply on patterns of Nigerian in cities and urban the street (Olutayo & Akanle, 2009). centres have altered dramatically over Consumption of snacks is thus the past several decades due to increase becoming a passion as snacks are sold in the number of service industries like everywhere, and may be eaten at every banking, oil and gas, marketing, meal time as well as in between meals. telecommunication, education among According to Longman Dictionary of others. This has led to increase in Contemporary English, sausage roll is a demand for meals prepared outside the piece of sausage meat surrounded by home (fast food) because it is pastry. It is sold along the roads in convenient and saves time. The study is traffic, corner shops, open market, aimed at adding to the existing literature supermarkets and virtually in every (Kolade, 2015; Ladislav & Buchtova, nooks and crannies of major towns and 2015; Jekanowski et al., 2001; Habib et cities in Nigeria. Among the fast foods, al., 2011) on the demand for fast food; sausage roll is one of the most sausage rolls in particular. The convenient fast foods. It is handy, tasty motivation for this study is based on the and affordable. The most popular need to determine the market share of branded sausage rolls in Nigeria are each brand of sausage rolls, the factors Gala, Meaty, Chopsy, Super bite/beef, influencing the consumers‘ expenditure Bigi , Yum yum and Rite spicy beef. on sausage rolls per week and the extent According to Dailymail (2000), sausage of sales inequality among the sellers. To rolls are an easily absorbed source of achieve the objective of the study, protein with some iron, zinc and B following research questions were vitamins for a healthy immune and raised: reproductive system. Studies i. What are the socio economic (Jekanowski, Binkley & Eales, 2001; characteristics of sellers and buyers of Schlosser, 2002) have shown that the beefy sausages in the study area?

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48 ii. What is the market share of each analysis. These are Almost Ideal brand of beefy sausage in the study Demand System (Adetunji & Rauf, area? 2012; Iwang, 2014; Motallebi & iii. What are the factors influencing Pendell, 2013), The Linear Approximate consumers‘ expenditure on branded Almost Ideal Demand System sausage rolls? (LA/AIDS) (Green & Alston, 1991; iv. What is the extent of sales inequality Pashardes, 1993; Alston, Foster & among the sellers branded sausage Green,1994; Buse, 1994; Hahn, 1994; rolls? Moschini, Moro & Green, 1994;

2.0 Theoretical framework and Moschini,1995; Asche & Wessels, literature review 1997), Linear Expenditure System According to Reynolds (2005), utility is (Pollak, Robert & Wales, 1992), Double the capacity of a good (or service) to Hurdle model (Eakins, 2014; Blundell & satisfy a want. Concept of utility is one Meghir, 1987; Newman, Henchion & approach that explains the phenomenon Matthews, 2003; Akinbode & Dipeolu, of value. Factors that affect consumer 2012) and Quadratic Almost Ideal behaviour include marketing factors ( Demand System (Lakkakula, Schmitz & product design, price, promotion, Ripplinger, 2016; Olorunfemi, 2013; packaging, positioning and distribution), Surabhi, 2010; Moro & Sckokai, 2000; personal factors( age, gender, education Meenkashi & Ray, 1999; Gould & and income level), psychological factors Villarreal, 2006; Banks, Blundell & such as buying motives, perception of Lewbel, 1997; Bopape & Myers, 2007). the product and attitudes towards the However, despite the wide usage of product., situational factors( physical these analytical tools their shortcomings surroundings at the time of purchase, have been well documented in literature. social surroundings and time factor), For instance, AIDS model assumes non- social factors ( social status, reference linearity. The AIDS model may be groups and family) and cultural difficult to estimate because the price factors(religion, social class—caste and index is not linear in terms of sub-castes). For instance, consumer‘s parameters estimated and particularly demand for a brand of sausage roll the income elasticity tends to be smaller would be influenced by the price, as income increases. LA/AIDS models, packaging, size, consumer‘s income, as originally proposed by Deaton and taste, expiry date, and packaging among Muellbauer (1980), did not consider the other factors. Specifically, demand demographic variables. Also, the theory establishes the relationship simplification in estimation of LA-AIDS between the consumers demand for is offset by difficulties in deriving the goods (e.g. sausage roll) and services elasticities. According to Pollark and and their prices. The demand analysis Wales (1969), Linear Expenditure refers to the organized processes aimed System does not rest on a specification at exploration of a certain variable of the error structure, the properties of behaviour (demand) in future, based on the estimator are not known. It should a systematic study of the existing be noted, however, that it is not a historical data. maximum likelihood procedure since a maximum likelihood interpretation Various analytical tools methods have requires a disturbance covariance matrix been used by scholars in demand proportional to the identity, whereas in

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48 fact the covariance matrix of the system the available data. It is an extension of (although unknown) is singular. simple linear regression. MLR is used to Determination of elastistities as predict the value of a variable expected in demand study is not (dependent variable) based on the values obtained using double hurdle model. of two or more other variables The study utilized Multiple Linear (independent variable). The explicit Regression (MLR) which is suitable for model of MLR is given as: n Y  o  i X i  0 ………………………………(1) i1 Where: Y represents the dependent variable, Xi represents the independent variable

0 represents the error term

Measures of income inequality used in arising from extreme wealth and less literature include Atkinson index sensitive to that arising from extreme (Lamporte, 2002; Atkinson & poverty. Micklewright, 1992, Regidor, Calle & The study utilized Gini Navarro., 2003), Coefficient of variation coefficient/Lorenz curve as a measure of (Champernowne & Cowell, 1998; income inequality. Gini coefficient is Campano & Salvatore, 2006), most sensitive to inequalities in the Generalised entropy index (Kawachi & middle part of the income spectrum Kennedy, 1997; Weich, Twigg & Holt, (Elisson, 2002; Hey & Lambert, 1980). 2003; Hou & Myles, 2005; Cowell, It has been used extensively in literature 1995; Jenkins, 1991), Robin Hood index (De Vogli, Mistry & Gnesotto, 2005; (Kennedy, Kawachi & Prothrow‐Stith, Beckfield, 2004; Blakely, Atkinson & 1996; Shi, Macinko & Starfield, 2003; O'Dea, 2003; Lopez, 2004) and it Sohler, Arno & Chang, 2003) and Theil remains the most popular measure of index (Cowell, 2003; Milanovic, 2002). income inequality (Fernando, 2007). While Atkinson index is subjective The Gini coefficient measures inequality because the user can choose what of a distribution (examples are income, subgroups to weight more heavily than sales revenue and output). It is defined others, the coefficient of variation would as a ratio with values between 0 and 1. not be an appropriate choice of income The numerator is the area between the inequality measure if a study's income Lorenz curve of the distribution and the data did not approach a normal uniform distribution line; the distribution (Campano & Salvatore, denominator is the area under the 2006; Fernando, 2007). Also, the uniform distribution line (Garvy, 1952). generalised entropy index result is often The Gini index is the Gini coefficient difficult to interpret. The Robin Hood expressed as a percentage, and is equal framework does not incorporate a to the Gini coefficient multiplied by sensitivity parameter while Theil index 100. It is expressed mathematically as: is particularly sensitive to inequality

n G 1 X k  X k1 Yk Yk1  …………………….(2) k1

Where: Xk is the cumulated proportion of the population variable. Yk is the cumulated proportion of the income variable, for k = 0,...,n, with Y0 = 0, Yn = 1.

3.0 Methodology the major commercial centers (3 per The study was carried out in Ibadan local government areas gave 60 metropolis. The study made use of respondents). A total of 180 and 135 primary data collected with structured questionnaires were administered for the questionnaires in 2017. Multi-stage sellers and consumers of sausage rolls sampling technique was used. The first respectively. However, 154 (sellers) and stage involved purposive selection of 122 (buyers) questionnaires were three local government areas (Ibadan returned to time and good for analysis.

North, Ibadan North East and Oluyole Data were analyzed using descriptive local government) out of six local statistics, Gini coefficient/Lorenz curve government areas that make up Ibadan and Multiple Linear Regression. Metropolis. The choice of the local Specifically, descriptive statistics was government was based on the large employed to profile the socioeconomic number of co-operate and commercial characteristics of the sellers and buyers activities which encouraged demand for of sausage rolls as well as estimating the fast food (sausage rolls). The second market share of each of the identified stage also involved purposive selection sausage roll brands. Gini of three major commercial centres from coefficient/Lorenz curve was employed each of the selected local government to estimate the market areas. The third stage involved random concentration/extent of inequality of selection of 15 sausage rolls sellers from each brand of sausage rolls. The factors the list obtained from the association of influencing the amount consumers sausage roll sellers in the identified spend on sausage roll per week was commercial centres. Also 20 determined using multiple linear respondents were selected from each of regression.

(i) Gini- Coefficient

------(3)

Where: Yk is the cumulated proportion of the number of seller for each brand of sausage roll. Xk is the cumulated proportion of the daily sales revenue recorded for each brand of sausage roll.

(ii) Multiple linear regression model:

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48

ASS  ao  a1MIC  a2 AGR  a3SER  a4YOE  a5 HHS  a6MSR  0...... (4)

Where: ASS represents the amount consumers spent on sausages per week in the study area. MIC represents monthly income of respondent (consumer) (₦ in naira) AGR represents age of respondents (in years) SER represents sex of respondents (male =1, female = 0) YOE represents the years of education of respondents (consumer) HHS represents household size of respondents (consumer) MSR represents marital status of respondents (consumer)

0 represents random term

4.0 Results and Discussion highway. Also majority (52.0 percent) Profile of sausage sellers and of sausage roll consumers were single consumers: The study revealed that 58 while 45 percent were married. The percent of the sausage rolls buyers were buyers (96.0 percent) and the sellers male while expectedly 82.3 percent of (92.2 percent) were well educated. The the sellers were female. Female are large number of educated buyer means more into trading in sausage rolls than that the value for the money spent on the male in Nigeria. The often employ sausage rolls was assured (see Table 1). youth to assisting hawking on the

Table 1: Socioeconomic characteristics of buyers and sellers of sausage roll Variables Percentage of buyers Percentage of sellers Sex Male 58 17.6 Female 42 82.3 Level of education No formal education 4.00 7.8 Primary education 4.00 27.5 Secondary education 12.00 39.2 OND/NCE 17.00 15.7 HND/BSc 43.00 9.8 Post graduate 20.00 0.00 Marital status Single 52.00 23.5 Married 45.00 72.5 Divorced 3.00 3.9 Source: Field Survey (2017)

The averages of the buyers and sellers respondents above 47years of age ages were 26.5years and 37.7years consumed sausage rolls. This shows that respectively. Majority of the consumers the consumption and sales of sausage and sellers were within the age bracket rolls was dominated by youths in their of 18 – 27 and 28 – 37years economic active ages. respectively (see Figure 1). Few

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48

Figure 1: Age distribution of buyers and sellers of sausage rolls

The study also showed that the average quality and taste over the years. The household sizes of the consumer and market share was followed by Bigi (17.8 sellers were 4.3 and 4.2 respectively. percent) and Ritespicy (17.0 percent) The distribution revealed that most (see Table 2). This may be due to its big respondents had household size below size, attractive packaging and consumer the average values (positive skewness). friendly advertisement. Despite gala

Among the brands of sausage rolls in having the highest market share, the study area, Gala (big and small) had ritespicy had the highest average daily the highest market share of 25.8 percent. sales of ₦288.10. This was followed by This may be attributed to its consistent superbite and gala respectively.

Table 2: Market share (%) and average daily sales of sausage rolls

Number of Market Share Average daily sales Sausage rolls buyers (%) (₦) Gala 89 25.8 263.8

Chopsy 25 6.3 200.0

Superbite 51 12.8 288.1

Yumyum 42 10.5 263.5

Ritespicy 68 17.0 313.3

Bigi 71 17.8 203.1

Beefie 19 4.8 200.0

Meaty 20 5.0 200.0

Source: Field Survey (2017)

The study showed that most buyers of 0.69%. This means that 0.69% of the sausage rolls (59.0 percent) were within buyer‘s monthly income would be spent the monthly income ₦50,001 - on sausages (see Table 3). This may be ₦150,000 while the average monthly attributed to occasional demand for income was ₦101,082.50. The average sausage rolls by most consumers who monthly sales by sellers was did not consider it as ‗must eat‘ unlike ₦42,055.00. The price charged by the staple food. This was corroborated different brands was the same (₦50 per by the study that majority of consumers one). The percentage of monthly income (45%) bought two pieces of sausage of respondents (consumers) spent on rolls per week sausage rolls in the study area was

Table 3: Distribution of monthly income of respondents (buyers and sellers) Percentage of Monthly sales Percentage of Monthly income (₦) buyers (₦) sellers At most 50000 28.0 At most 20000 5.9 50001 - 150000 59.0 20001 - 40000 33.3 150001 - 250000 9.0 40001 - 60000 47.1 250001 - 350000 2.0 Above 60000 13.7 Above 350000 2.0 Total 100.0 Total 100.0

Mean ₦101,082.50 Mean ₦42,055.00

Std. deviation ₦68,907.17 Std. deviation ₦14,111.45

Skewness 2.21 Skewness -0.09 Average amount spent on sausage rolls per month by respondents = ₦700 Percentage of monthly income spent on sausage rolls by buyers = 0.69% Source: Field survey (2017)

The extent of inequalities in sales the meaty sellers controlled about 69.0% revenue among sausage sellers: the of the total daily sales of meaty sausage study revealed that gala had the highest roll in the study area. Also, 50.0% of the inequality (concentration) in average super bite sellers control about 65.0% of daily sales. This was followed by meaty the total daily sales of super bite in the and superbite (see Table 3). This result study area. Since there was uniformity was confirmed by the Lorenz curves in the price per unit of sausage rolls, the (see Figures 2, 3, 4 & 5). The figure inequality may be attributed to location shows that 50.0% of the gala sellers of seller‘s stall/shop and how the seller controlled about 71.0% of the total daily relates with buyer. sales of gala sausage roll while 50.0% of

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48

Table 4: Gini coefficients of sausage rolls

Sausage rolls Gini coefficient estimate

Gala 0.30 Meaty 0.28 Superbite 0.20 Bigi 0.19 Ritespicy 0.18 Yumyum 0.16 Chopsy 0.10 Beefie 0.09

Source: Field Survey (2017)

0.9

0.8

0.7

0.6

Cumulative percentage of number of sellers of number of percentage Cumulative 0.5

0.4

0.3

0.2

0.1

0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total daily sales for Gala

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48

0.9

0.8

0.7

0.6

Cumulative percentage of number of sellers of number of percentage Cumulative 0.5

0.4

0.3

0.2

0.1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total sales for Beefie Figure 2: Sale revenue Lorenz curves for Gala and Beefie sausage rolls

0.9

0.8

0.7

0.6

Cumulative percentage of number of sellers of number of percentage Cumulative 0.5

0.4

0.3

0.2

0.1

0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total sales for Bigi

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48

0.9

0.8

Cumulative percentage of number of sellers of number of percentage Cumulative 0.7

0.6

0.5

0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total sales for Chopsy Figure 3: Sale revenue Lorenz curves for Bigi and Chopsy sausage rolls

0.9

0.8

0.7

0.6

Cumulative percentage of number of sellers of number of percentage Cumulative 0.5

0.4

0.3

0.2

0.1

0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total sales for Meaty

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48

0.9

0.8

0.7

0.6

Cumulative percentage of number of sellers of number of percentage Cumulative 0.5

0.4

0.3

0.2

0.1

0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total sales for Rite spicy Figure 4: Sales revenue Lorenz curves for Meaty and Rite spicy sausage rolls

0.9

0.8

0.7

0.6

Cumulative percentage of number of sellers of number of percentage Cumulative 0.5

0.4

0.3

0.2

0.1

0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total sales for Super bite

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48

0.9

0.8

0.7

0.6

Cumulative percentage of number of sellers of number of percentage Cumulative 0.5

0.4

0.3

0.2

0.1

0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Cumulative percentage of total sales for Yumyum Figure 5: Sales revenue Lorenz curves for Superbite and Yumyum sausage rolls

Factors influencing consumers’ rolls decreases. This is in agreement expenditure on sausage rolls: the with the earlier findings which showed regression result is shown in Table 5. that consumption of sausage rolls was The model has F-value of 6.51, this common among the youth. There are shows that the model has a good fit some foods that one avoids as one is (p<0.01). The adjusted R-squared of getting older which may be based on 0.653 showed that 65.3 percent variation advice by nutritionist. The negative and in the weekly amount spent on sausage significant relationship (p<0.01) rolls generally was explained by the between the marital status and the significant independent variables. Out of weekly expenditure on sausage rolls six (6) independent variables may be because almost all married considered, the coefficients of four (4) persons eat cooked meal at home. independent variables (age of Hence, the reduction in weekly respondent, marital status of expenditure on sausage rolls for every respondents, year of education and married individual. Moreover, the monthly income of respondents) positive and significant relationship significantly influenced the amount (p<0.05) between the weekly consumers spend on sausage rolls per expenditure on sausage rolls and the week. The coefficient of age was year of education may be attributed to negative and significant (p<0.01). This carry-over of eating habit from school means that for unit increase in the age of on consumption of fast food because of respondent, amount spend on sausage tight schedule of students. Also,

Sowunmi Fatai Abiola & Magreola Dare Gabriel CJBSS (2018) 9(2) 30-48 increase in job responsibilities of the in agreement with the study of Amao respondents give little time to cook, thus and Ayantoye (2014). spending more on sausage rolls. This is

Table 5: Result of regression analysis

Variables Coefficient Standard error t-value p –value

AGR -5.202*** 2.019 -3.18 0.0015

HHS 5.867 4.697 1.17 0.2420

MRS -13.133*** 5.005 2.62 0.0088

SER 19.212 22.694 0.84 0.4009

YOE 4.764** 2.380 2.00 0.0455

MIC -2.243* 1.158 -1.94 0.0524

Constant 2.942 54.063 0.05 0.9570 Dependent variable: Amount spent by respondens on sausage rolls per week (ASS) R-2 = 0.653, F(6, 93) = 6.51, Prob > F = 0.000. NOTE: *, **, *** represents 10%, 5% and 1% level of significance respectively. Source: Field Survey (2017)

5.0 Conclusion and recommendation daily sales revenue. The study affirmed The study examined the demand for that he buyers spent less than 1% trademarked sausage rolls by consumers (0.69%) of their monthly income on in Ibadan metropolis. The results sausage rolls. Age, marital, year of showed that most of the sausage rolls education and monthly income of consumers were between the ages of 18- respondents were the factors influencing 47 years while majority of the sausage the weekly amount spent on sausage roll sellers were within 28 - 37 years of rolls by the consumers. The study age. Sales of sausage roll were showed that the sausage roll producers dominated by female (82.3%). Most of have to come-up with market the consumers and sellers were segmentation in order to raise the educated. The buyers and sellers had amount spent on sausage rolls by average household sizes of 4.3 and 4.2 consumers. Also strategy should be put respectively. The study revealed that in place not to allow the inequality in gala brand had the largest market share the sales of sausage rolls be too (25.8%) as well as highest inequality in pronounced.

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