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Companies &Industries

Delia Stirling, Director of Sales and Marketing at Browns Cheese

DAIRY

Developing capacity to ensure milk supply


Thirty-ve-year old family business diversies milk source and product range for survival

BY AKINYI JOSEPH round two and a half years ago, Delia Stirling and her American husband Andrew returned to Kenya to take over the Browns family business, a cheese making enterprise that her parents David and Sue Brown started around 35 years ago in Tigoni. Delias and Andrews experience abroad had exposed them to a variety of dierent dairy products which they believed would be well received by the Kenyan market, and in the months that followed, Browns diversied into more varieties of cheese including Brie, Camembert, Cheddar, Gouda, Feta, blues, creams, cottage and string. Today, the business has tripled in size and Browns Cheese makes seventeen dierent types of cheese, more than any other cheese maker in the world. The company is present in ve East African countries, has received local and international awards, and represents Kenya at numerous international events including the World Cheese Awards this year. Browns cheese
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will soon be available at gourmet shops in the US. In November 2012, Andrew and Delia expanded the business further when they hey 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. Browns cheese is an all natural dairy product, 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 doesnt use additives, stabilisers or colourants. For the same reason, their merchandise is priced slightly

Browns makes seventeen dierent types of cheese and will soon be exporting to the US.

higher than other dairy products - around 30% above the market . The emphasis on natural goodness is something Delia, Director of Sales and Marketing at Browns Cheese, learnt from her parents, and is how the business started: when her parents couldnt nd any Brie in the local market, they

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 ve Fresians at her Limuru farm which provide the mother culture for their cheese. But the handful of cows cannot support Browns commercial ventures, and it is directly aected 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 ve cows operating in a two to three acre of land. The dairy industry is male dominated and the average age of a farmer is 62 years which means there is a reduced willingness to professionalise 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 Universitys Tegemeo Institute last conducted a study in the dairy sector in 2009. According to Tegemeos latest results, the dairy sector contributes 14% to the agricultural sectors GDP and 3.5% of the countrys total GDP. While Kenya is quite advanced within East Africa, its performance is dwarfed in comparison 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 passing 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 countrys milk sheds - a term used to describe key milk producing 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

Gerald Mutinda, Regional Manager at EADD

Lilian Kirimi, a research fellow at Tegemeo Institute

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.
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, investment in storage technologies would allow excess milk to be converted to powder and long life milk and help steady uctuations. Currently the large commercial brands such as Tuzo, Fresha, Brookside, KCC and Daima oer milk products with a long shelf life. Such a strategy, Lillian said, will assist Kenya to grow into neighbouring markets which suer 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 countrys milk, also threatens the industry. In addition to posing hygiene and health risks, it diverts milk from the formal sector by oering 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 prots 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 farmers more income but it wont grow the sector, Gerald said. EADDs aim is to broker business relationships between processors and producers. A market innovation that tries to counter the operations of the informal sector - alongside the Kenya Dairy Boards 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 Githunguri dairies (producer of Fresha) has adopted, also helps increase productivity since the farmers own the processing plant and this boosts their development. Gerald added that while
April Nairobi Business Monthly |

Companies &Industries

the strength of cooperatives like Githunguri would help to move the industry forward, it is not essential for all producers to own a processor. All that is needed is a high level relationship between farmers and processors, such as a tripartite arrangement which links them to nancial institutions. The approach that EADD has implemented is the creation of 20 hubs across Kenya in which around 2,000 farmers self organise themselves into a producer organisation that creates a chilling plant, and leverages on services that farmers need to improve production. The system allows farmers to access inputs such as feed on credit and draws in nancial sector players to oer loans, livestock insurance and business development services. Since implementation of this approach, the hubs have been producing 180,000 litres of milk a day catering for one fth of the countrys total production, and this is an encouraging sign according to Gerald. Greater investment in road infrastructure and electricity (or solar powered storage facilities and dispensers) would also help modernise the industry, because of the perishability of milk products, as would the revival of farmer advisory services oered by government to include veterinarians, animal health and livestock specialists. To counter the sector wide threats to the supply of milk, Browns supports around 3,000 local dairy farmers from whom they purchase milk. Towards the end of last year during the milk shortage that aected the entire country, it was one of two dairies that remained open and Delia attributes this to their business model which selects co-operatives to work with, teaches farmers about quality and pays more per litre. Browns also runs a goat and sheep project with local farmers, and assists them to source billy goats. While Delia admits that this is a lot more involved than she would like to be as a cheese producer, she knows it is necessitated by the nature of her business. On the positive side, this has stabilised supply of goat milk to Browns, and the company has introduced products made from goat milk. Her goat cheeses will soon be exported to the US. Challenges in the dairy sector have also prompted Browns to diversify their product oerings away from dairy. This year, Browns plans to introduce a line of crackers to complement their cheese range and help spread the risk and build their brand as a food rather than a cheese company.
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INNOVATOR

Browse a chapati
BY WANJA KARUGA

ecessity is the mother of invention; this statement is a true reection of Muthuu Kagios business journey. Muthuu is the proprietor of Wellspring Foods, an online store, which specialises in chapati making and delivery to various parts of the city. In late 2011 Muthuu noticed that the majority of working class people were getting increasingly busy and hardly had time to prepare chapatis in their homes. That is when I realised that I could start a business to cater for this need, as most people were looking for a place they could buy aordable, clean made chapatis, Muthuu explained. In Kenya it is common to nd both women and men making chapatis by the roadside, and although cheaper many are unwilling to purchase them because the chapatis are deemed to be made in unhygienic conditions. Muthuu went in search of equipment that would help him actualise his dream. He had seen many such machines on the net, but could not import them because it did not make economic sense. He decided to have one made by a local artisan. I was looking for a machines that would allow the production of at least three hundred chapatis in an hour. I had already researched on the net and I knew that this was possible, but the catch was that it had not been done before, this meant that trial and error would be inevitable, Muthuu explains. After a few months, he nally got the machine, however things did not turn out as planned because it cut the dough in the shape of naan or roti instead of the chapati shape. Although this was a setback for Muthuu who was looking forward to his rst batch of commercial chapati, he decided to make the most out of the situation, and started selling chapati wraps.

Muthuu Kagio who makes 500 chapatis in one hour at his chapati making business.

We would produce the roti and then stu it with chicken, beef or eggs and vegetables to make a sandwich, he explains. However this presented a logistics problem because the wraps were consumed around lunchtime which heavy human trac built up around lunch time when the majority of orders would be placed. After a few months, he had made enough money to purchase a new cutting and shaping machine that would allow him to achieve his original dream, and he went to Rongai and worked with an artisan until they hadtogether managed to come up with a suitable machine. In an hour Muthuu is able to produce 500 chapatis which he supplies to oces in the CBD, Westlands, Upperhill and Juja. To order customers send a message via the Wellsprings website, giving their location and the time the delivery is expected. Apart from oces he also supplies to homes and at parties, his menu includes, white and brown chapatis each going for Sh25, and beef and eggs wraps for Sh60. Over the weekend he is able to sell over 600 brown chapatis and 400 white chapatis to clients at their homes. He says the secret to success is loving what you do and having a service mentality instead of expecting to be served. Muthuu plans to stock his chapatis at various local supermarket chains.