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Developing Capacity to Ensure Milk Supply

Developing Capacity to Ensure Milk Supply

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Published by Aamera Jiwaji
Thirty-five-year old family business diversifies milk source and product range for survival
Thirty-five-year old family business diversifies milk source and product range for survival

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Published by: Aamera Jiwaji on Mar 05, 2014
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03/05/2014

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Nairobi Business Monthly 
 
 April
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Companies
&
Industries
BY AKINYI JOSEPH
 A
round two and a half years ago, Delia Stir-ling and her American husband Andrew returned to Kenya to take over the Brown’s family business, a cheese making enterprise that her parents David and Sue Brown started around 35 years ago in Tigoni.Delia’s and Andrew’s experience abroad had exposed them to a variety of di
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erent dairy prod-ucts which they believed would be well received by the Kenyan market, and in the months that followed, Brown’s diversified into more vari-eties of cheese including Brie, Camembert, Cheddar, Gouda, Feta, blues, creams, cottage and string. Today, the business has tripled in size and Brown’s Cheese makes seventeen di
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erent types of cheese, more than any other cheese maker in the world. The company is present in five East African countries, has received local and international awards, and represents Kenya at numerous international events including the World Cheese Awards this year. Brown’s cheese will soon be available at gour-met shops in the US.In November 2012, Andrew and Delia expanded the business further when they diversified away from retail cheese and set up cheese delis at Zucchini, Chandarana, ABC Place and Lavington which allow customers to buy fresher cheese than that which is packed in plastic and allows flexibility in the amount they purchase. They have also introduced a natural Greek yoghurt.Brown’s cheese is an all natural dairy prod-uct, as compared to other types of cheese in the market which depend on chemicals and preservatives to increase longevity. Because of this, it has a shorter shelf life since it doesn’t use additives, stabilisers or colourants. For the same reason, their merchandise is priced slightly
Developing capacity to ensure milk supply
DAIRY
Thirty-five-year old family  business diversifies milk source and product range for survival
higher than other dairy products - around 30% above the market .The emphasis on natural goodness is some-thing Delia, Director of Sales and Marketing at Brown’s Cheese, learnt from her parents, and is how the business started: when her parents couldn’t find any Brie in the local market, they
Delia Stirling, Director of Sales and Marketing at Brown’s Cheese
 
Brown’s makes seventeen di
ff 
erent types of cheese and will soon be exporting to the US.
 
April
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Nairobi Business Monthly 
 
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decided to make it themselves.It is a trait that the 33 year old Delia, a fourth generation Kenyan, learned at a young age and one she continues to imbue into her business dealings. For this reason, Delia keeps a herd of twenty five Fresians at her Limuru farm which provide the mother culture for their cheese. But the handful of cows cannot support Brown’s commercial ventures, and it is directly a
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ected by the challenges facing the dairy sector.The East Africa Dairy Development (EADD) estimates that there are around 1.2 million small scale dairy farmers in Kenya, which produce four billion litres of milk annually. Most of these farmers own between two to five cows operating in a two to three acre of land. The dairy industry is male dominated and the aver-age age of a farmer is 62 years which means there is a reduced willingness to professional-ise the sector. At this age, farmers are reluctant to embrace new breeds of cows and are more comfortable with their hardy local Zebu, which produces less milk than the high yield Fresian. That said, the industry in Kenya lacks current data on a national level. EADD only conducts research in small pockets across the country while Egerton University’s Tegemeo Institute last conducted a study in the dairy sector in 2009. According to Tegemeo’s latest results, the dairy sector contributes 14% to the agricultural sector’s GDP and 3.5% of the country’s total GDP.While Kenya is quite advanced within East Africa, its performance is dwarfed in compari-son to the dairy nations of Netherlands, America and even South Africa. According to Gerald Mutinda, Regional Manager at EADD, Kenya produces 5 litres of milk per cow per day whereas it should be producing 40 litres. South Africa, on the other hand, has only 3,000 cows and produces 3,000 litres of milk a day.“We have too many cows producing too little milk,” Gerald said. The answer is to reduce the number of cows and increase yield per cow.Since 2003 when KCC was privatised the dairy industry has revived, and milk volumes pass-ing through the formal processing chain have stabilised. Lilian Kirimi, a research fellow at Tegemeo, said the dairy sector is a commerce oriented industry since in the country’s milk sheds - a term used to describe key milk produc-ing areas in the country including parts of Rift Valley and Central Kenya - 75% of the milk that households produce is sold. However when examined on a national level, the proportion of milk being sold is much lower since small holder farmers around the country retain a higher proportion of the milk they produce.Per capita consumption of milk in Kenya is estimated at 110 litres per year per person - a regional high as compared to Uganda which is 65 litres - but in rural Kenya, it is as low as 20 litres per year. While the liberalisation of the sector in 1992 helped to increase the number of producers, dairy farmers still do not produce enough milk for the country, a situation that is aggravated by seasonal changes in rainfall which impacts directly on fodder and pasture, and is worsened by poor planning which causes gluts and shortages. Key transformations are needed from a policy and marketing standpoint. For instance, invest-ment in storage technologies would allow excess milk to be converted to powder and long life milk and help steady fluctuations. Currently the large commercial brands such as Tuzo, Fresha, Brookside, KCC and Daima o
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er milk products with a long shelf life. Such a strategy, Lillian said, will assist Kenya to grow into neighbouring markets which su
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er from low milk production. Another challenge is the high cost of feed which prevents farmers from expanding their scope of operation and eats into their gross margin. Sunflower seeds, for instance, she explained, are a major component of feed and yet Kenya imports them. In the same way that orphan crops like sorghum and millet were rebranded by the government as high value crops and are now being sold to breweries, Lillian suggests that the country needs a policy to encourage farmers to grow crops that are a core ingredient in cattle feed.The informal milk system, which handles between 70% to 80% of the country’s milk, also threatens the industry. In addition to posing hygiene and health risks, it diverts milk from the formal sector by o
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ering farmers a higher price per litre - approximately 50% more than processors, according to Gerald - and cash payment on delivery. Processors, on the other hand, try to maximise their profits by paying less per litre and on credit.“If we want to grow the industry, processing is key which means the relationship between processors and farmers needs to be mutually enhanced. The informal sector may give farm-ers more income but it won’t grow the sector,” Gerald said. EADD’s aim is to broker business relationships between processors and produc-ers.A market innovation that tries to counter the operations of the informal sector - alongside the Kenya Dairy Board’s attempts to regulate the informal milk trade - is the sale of pasteurised milk through dispensers in kiosks and retail outlets like Tusky.The vertical integration model that Githun-guri dairies (producer of Fresha) has adopted, also helps increase productivity since the farm-ers own the processing plant and this boosts their development. Gerald added that while
 We have too many cows producing too little milk,” Gerald said. The answer is to reduce the number of cows and increase yield per cow.
Gerald Mutinda, Regional Manager at EADDLilian Kirimi, a research fellow at Tegemeo Institute

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