The dairy industry is a major part of Kenya’s agricultural economy, contributing around 4% to the country’s GDP. With a growing population and rising incomes, demand for dairy products like milk, cheese, yoghurt and butter has been increasing steadily in both urban and rural areas. Smallholder farmers with just a few cows make up a large percentage of milk producers in Kenya. If you are one of them looking to improve your dairy business, marketing and selling your products more effectively can make a big difference. Here are some tips on how to successfully market and sell your dairy products in the Kenyan market:
1. Know Your Target Market
The first step is identifying who your potential customers are. In Kenya, a large portion of dairy consumption is in fresh milk.
Urban centres are a major market for fresh milk, with higher demand from middle and high-income households. Rural smallholder farmers also consume a lot of the milk they produce.
When it comes to processed dairy products like yoghurt, cheese and butter, higher-income urban households are the biggest consumers. Understanding the demographics, preferences and buying power of your target consumers will help shape your marketing and sales strategies.
2. Consider Value Addition
Raw milk has the shortest shelf life and sells at lower prices compared to processed dairy products. Value addition can help boost your revenues.
Look into getting pasteurization equipment if you can supply larger volumes of milk. Pasteurized milk has a longer shelf life and fetches a higher price in urban centres. Consider making yoghurt, cheese, mala/lala (fermented milk) or ghee clarified butter which have higher value and margins.
In your target market, access to equipment and working capital will determine what value-added products you can viably produce.
3. Build Relationships with Milk Collection Centers
In Kenya, smallholder dairy farmers rely on Milk Collection Centers to sell their extra raw milk that is not consumed at home or sold directly to neighbours.
These are cooperatives or private collection centres with refrigerated tanks to store fresh milk. One such cooperative is the KCC — Kenya Creameries Cooperation.
Establish good relationships with the managers and staff of your nearest milk collection centres.
Furthermore, ensure your milk consistently meets its quality standards. With a reputation for reliably supplying good quality milk, you are more likely to have your milk prioritized for purchase when supply exceeds demand at the centre.
4. Look Into Contracts with Processors
Formal processors like dairies and cheese factories offer better income stability for farmers through contractual arrangements compared to selling to Milk Collection Centers. However, their minimum quality and volume requirements are higher. Still, it’s worth approaching any processors located within viable transport distance of your farm. Discuss the possibility of supplying them with milk or cream on a contractual basis. This provides a guaranteed market for your dairy products.
5. Sell to Shops, Kiosks and Street Vendors
Raw milk and simple processed dairy products like mala, yoghurt and ghee can be sold directly to shops, kiosks and street food vendors in your area.
This requires building relationships with these small business owners and supplying them with quality products consistently.
You may need to offer competitive credit terms to get loyalty. However, the advantage is eliminating intermediaries and earning higher margins.
Make deliveries yourself initially until you build trust.
Further, avoid any temptation to artificially increase milk volume because your customers will notice reduced milk quality and quickly replace you with your competitor.
6. Generate Local Publicity
There are low-cost promotional strategies dairy farmers can use to become better known in their communities.
Sponsoring events, competitions or sports teams builds brand recognition.
Consider giving away samples of new products you launch or handing out promotional giveaways like calendars, t-shirts or pens with your farm name and logo.
Word-of-mouth referrals from satisfied customers are powerful. Better still, ask loyal customers to recommend your dairy products to family and friends.
7. Use Digital Marketing Strategies
In urban areas, higher-income shoppers are moving towards purchasing dairy products online using e-commerce platforms and apps.
Creating social media pages for your dairy business allows you to showcase your products, and farm practices and engage directly with potential customers.
Offering mobile payments, deliveries and subscription services can help enter this growing online retail market for dairy in Kenya.
8. Leverage Farm Tourism
Agri-tourism is a growing segment in Kenya. Urban residents want to reconnect with rural experiences and nature. Tapping into this demand by welcoming visitors to your farm can generate supplementary income.
You can offer tours showcasing your dairy operations, organically produced fodder, cattle breeds etc.
Have a small shop on site selling fresh produce, dairy items and handicrafts. Offer value-added activities like cheese-making classes. Promote your farm stay options on travel sites.
9. Participate in Trade Expos and Events
Attending trade shows and dairy industry events allows farmers to build networks and raise awareness about their products. Get to know fellow dairy producers, processors, distributors, retailers and restaurants that could become potential business partners or customers. When launching new products, trade shows provide an opportunity to do sampling and get feedback before going to market. You can also learn about the latest dairy sector innovations and technologies by interacting with various exhibitors.
Some notable dairy trade exhibitions held regularly in Nairobi include the Africa Dairy and Drink Summit & Expo, the Kenyan Dairy Expo and the Big Five Food Expo.
Make time to visit these events and connect with players across the dairy value chain. Remember to collect business cards and stay in touch afterwards.
10. Collaborate with Other Local Producers
Forming partnerships with other dairy businesses in your area can help overcome common challenges.
Work together to aggregate supplies and meet the higher volume requirements of big institutional buyers like supermarkets, schools, hotels etc. Collaborate on transport and logistics to reduce costs. Share cold storage facilities and processing equipment.
When promoting your products and region, develop an umbrella dairy brand representing all the partner farms.
Joint branding helps both small and large producers compete with dominant national dairy brands. Explore opportunities to supply international export markets as a producer group. Cooperating on innovation, technology and skills development can benefit all partners.
11. Get the Right Packaging
Invest in good packaging design and materials for your dairy products. This influences consumers’ perception of quality and freshness. Pouches, bottles and tubs for liquids like milk and yoghurt should be food-grade plastic for durability and ease of handling. Opt for thinner plastic to reduce costs. Stand-up pouches are gaining popularity. Labelling and branding on packages should stand out.
Cheese packaging requires breathability. Wax paper, greaseproof paper or cheesecloth work well. Create an outer layer of attractive paper or cardboard. For butter and ghee, use food-grade plastic tubs or consider nicely printed paper or foil. The goal is to balance functionality, freshness and appealing aesthetics on a budget.
12. Understand Market Prices and Payment Terms
Closely track the prevailing wholesale and retail prices for various dairy products in your region. This allows you to price competitively and avoid underselling yourself.
Be aware of seasonal fluctuations in dairy prices too. For vendors buying on credit, extend payment terms of at least a month for retail shops and 2-3 months for wholesale buyers. This encourages higher volume purchases more frequently.
Offering discounts for bulk orders from shops helps move older inventory. Timely payment should be rewarded with lower prices.
Penalize late payments by refusing credit sales for repeat offenders.
In addition, make pricing negotiable based on volumes and loyalty. Be flexible but avoid compromising too much on your profit margins.
13. Adhere to Quality Standards and Safety Regulations
Following food safety guidelines and health regulations is essential when marketing dairy products.
Ensure hygienic milking, handling and storage practices are adhered to avoid contamination.
Get quality certification from the Kenya Dairy Board which boosts credibility. Label products with production and expiry dates, ingredients and nutritional information.
Transport dairy items in refrigerated vehicles. Enforce higher standards and regular inspections as your business grows. Train farm workers and vendors on food safety. Stay up to date on government rules and standards for the dairy sector. Failing to meet quality standards can badly damage your brand’s reputation and risk penalties.
14. Choose the Right Sales Channels
Deciding where to sell your dairy output requires balancing costs, volumes and margins. Selling directly to consumers is more profitable but labour-intensive.
Wholesaling to shops and processors, on the other hand, reaches more volume but at lower prices.
Distributors add convenience at the cost of commission fees. Retailers demand trade discounts and weighing these trade-offs will determine the right mix.
Start with a combination of direct sales, shops, local eateries and collection centre contracts.
As production increases, expand by appointing distributors and supplying processors. Opening a small branded retail outlet in a high-traffic area can boost margins. Selling via online platforms offers growth opportunities too. Remain flexible to get the best value from different channels.
15. Communicate Your Brand Story and Farm Practices
Inform consumers not just about your products but who you are as a dairy producer. Share your personal story and values. Highlight any unique practices like regenerative grazing methods, saving rare local cattle breeds or using organic animal feed.
Transparently communicating your farming philosophy and how you care for animals and the environment helps connect with today’s ethically conscious buyers. Distinguishing your production practices and brand persona makes customers feel good choosing your dairy offerings over industrial commodity milk and cheese.
16. Provide Excellent Customer Service
A positive purchasing experience keeps dairy consumers coming back for more. Quickly address consumer complaints and product quality issues. Have a well-trained sales staff that can provide expertise on your offerings and recipes to customers. Home deliveries, farm tours and cheese-making classes add value.
Thank vendors and retailers when they pay on time or do cross promotions. Build personal relationships beyond just transactions. Going the extra mile to understand your customers’ needs makes your dairy business stand out. This gradually builds loyalty to your brand.
17. Continuously Evaluate and Improve
Regularly reviewing your dairy marketing and sales performance provides valuable insights. Identify your top-selling products, most profitable sales channels and biggest customers. Look for additional market segments to expand into. Seek customer feedback to improve packaging, pricing and service.
Be willing to try new marketing ideas and abandon less successful ones. Watch the strategies used by competing dairy brands for inspiration. Attend courses or mentor dairy marketing experts to build your knowledge. With a mindset of constantly optimizing, your dairy marketing strategies will evolve and grow over time.
Marketing and selling dairy products profitably requires understanding your consumers, establishing sales channels and building your brand’s reputation. By applying these tips, smallholder dairy farmers in Kenya can scale up revenues and get rewarded more for their hard work producing quality milk, cheese, yoghurt and butter. With the growing demand for dairy, effective marketing strategies will be central to tapping into this economic opportunity.