Milk Innovations Expand Business Opportunities in Kenya

This Article in Brief:

• In Kenya, milk often spills or goes bad due to inefficient transportation equipment. This is even more of a problem as milk supply chains are disrupted by the COVID-19 pandemic.
• Without access to the right storage for their milk, smallholder dairy farmers lose up to 30 percent of their product and the income they could have made from it.
• A new custom chilling technology – MaziwaPlus (MilkPlus) – ensures the safe transportation of fresh milk from smallholder dairy farmers to markets.

In Kenya, dairy farmers face a variety of challenges every day, such as milk going bad, delays in milk delivery and inefficient transportation. Edward Masinde, managing director of the milk aggregation and marketing company Clare Fortune, knows firsthand how this can affect income potential and limit farmers’ livelihoods.

Shared Frustrations Among Farmers

Masinde’s company always longed to expand its reach and source its milk from a wider range of smallholder dairy farmers. However, a lack of effective and affordable cooling equipment for their product regularly held them back.

• When smallholder dairy farmers don’t have access to effective storage options for their milk, it can cost them 30 percent of their product. This limits the growth of both producers and dairy facilities.
• Resulting frustrations create conflict and mistrust between milk producers and the transporters, cooperatives and aggregators that provide a vital link between them and the market.

Photo by Savanna Circuit Technologies

Working Together to Expand Business

In early 2020, Feed the Future facilitated a new partnership between Clare Fortune and Savanna Circuit Technologies Ltd., a Kenya-based manufacturing and last-mile distribution company that works with farmers directly rather than through a distributor or agent.

• Savanna Circuit created an innovative technology – portable chillers – that helps reduce the spilling and spoiling of milk while in transit. A small three-wheeled truck houses the chillers, replacing the need to use motorbikes that previously led to lots of spilled milk.
• The devices can store 100 to 800 liters of milk at the ideal temperature of 4-5℃ (39-41°F) while in transit, reducing energy costs for dairy aggregators by approximately 30 percent.
• In addition to the portable chillers, Savanna Circuit developed a mobile app through which businesses make payments to and communicate with farmers. Farmers can also use the app to create individual profiles and manage loans. With accessible, digital record-keeping, farmers are better able to access financing from local credit organizations and other financial institutions, such as banks.

The app has greatly improved transparency – the milk delivery by the farmer is captured in the platform and they receive an electronic receipt via SMS once their milk is collected. Before the app, transporters could sell some of the milk on the side before delivering it to the main processing plant. This caused farmers to lose revenue as they would be paid for a smaller quantity than what was collected. Now, farmers can easily track their product from the farms to the cooperatives, as well as their revenues.

Through the new business connection facilitated by Feed the Future, Clare Fortune purchased an 800-liter pre-chiller, increasing its milk collection capacity while reducing the cost of milk aggregation. Thanks to this new technology, Clare Fortune has reduced its milk loss from 15 percent to below five percent and increased its milk handling capacity. With the enhanced ability to buy from more farmers, the company plans to increase its number of suppliers from 100 to 600 farmers. Milk-chilling technology also benefits farmers directly, allowing them to maintain a more consistent revenue stream.

“With this chilling machine, I have the confidence that my milk will reach the market without being spoiled,” said Richard Gwaro, a farmer in Bungoma County. “It gives me the motivation to produce more milk and supply to the company.”

Clare Fortune is exploring expanding its business in the future by investing in pasteurization and purchasing a second pre-chiller as its number of suppliers increase. The company’s goal is to increase daily milk intake and sales to over 10,000 liters per day.

The Feed the Future Kenya Crops & Dairy Market Systems Activity (KCDMS), implemented by RTI International, is a five-year USAID-funded effort that helps increase agricultural production and reduce poverty and malnutrition in Kenya, helping to spur a competitive, inclusive and resilient agricultural market system.

 Helpful Links:

• Learn more: Kenya Crops and Dairy Market System

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