- Kenya has the second largest market in the dairy industry in Africa.
- Per capita milk consumption is estimated to be at 110 litres and projected to grow to 220 litres by 2030.
- Of the marketed milk, an estimated 20% is processed and packaged through formal channels while 80% is traded through the informal milk market – 5% of which is processed and marketed through milk dispensers located at strategic outlets.
- Kenya is a mainly liquid milk market with growing yoghurt, cheese and butter demand.
- Milk and milk products are largely locally consumed, with some processors exporting minimal quantities to 9 African counties.
- Only 10% of the estimated 300 concentrate feed millers are producing quality feed.
- The sector is attracting medium scale commercial farmers.
- Increased demand for milk is encouraging farmers to seek ways to improve milk productivity
- Dairy farmers are getting organized outside the traditional Co-operatives
- Informal milk traders becoming organized and seeking recognition
- Investment by County Governments in dairy has increased accessibility to cooling facilities
- Dairy farmers are seeking access to insurance and financial support
- Urbanization and population growth leading to increase in milk consumption
- Consumer demand for full cream milk is driving the growth of milk dispensing
- Increased accessibility to milk through milk dispensers
- Increase demand of dairy value added products leading to demand of quality milk
- Increased milk demand due to increased powder milk processing capacities
Key Sector Challenges
- Seasonal production due to poor planning on fodder production and conservation.
- Feed availability and quality is a key issue in the industry.
- New regulations have banned trade of raw milk through the informal markets due to safety concerns relating to alleged adulteration and contamination.
- The cooperative movement, a key platform for milk marketing, has been facing management challenges and most cooperatives have been rendered defunct.
Current Average Farmer Gross Profit Earnings
Raw Milk Market Segmentation
- Facilitating farmers’ access to quality and affordable concentrate feed and fodder by addressing key production and marketing constraints.
- Supporting and facilitating the development of alternative milk marketing channels that meet set safety standards at affordable prices.
- Supporting dairy hubs to engage professional management services for profitable business.
2,500 score (according to Herfindah-Hirschman Index) of competitiveness of Kenya’s dairy processing companies.