By Dipo Olowookere
According to a market research report titled ‘Kenya Dairy Products Market Outlook to 2020 – New Product Launches in Kenya to Dairy Product Market’ by Ken Research, Kenya is largely dependent on agriculture for its GDP, has a well-established dairy sector in the nation but being the eighth largest populated country in Africa, the demand for dairy products is also very high.
Growing dairy farming in the nation has resulted in increased contribution from Kenya in overall dairy product market of Africa.
Effective attractive hygiene packing supported by creative promotion, marketing and advertisement campaigns has helped Unilever butter brand “Rama” to have top brand recognition in Kenya butter market and hence leading to domination of Unilever.
Cheese followed yoghurt in the Kenya dairy product market and is also observed to grow at a rapid pace. Market players’ strategy to reduce the average per unit prices could be stated as the major reason for the growth of the cheese market in the country. Decreased prices resulted in increased number of consumers of cheese in Kenya, increasing the overall revenue generation.
Milk powder market is driven by its use in various baking products and ice cream manufacturing in Kenya. Additionally, the presence of organized players in the market with respect to Nestle, Brookside Dairies, Pearl Dairy, NKCC, RH Devani Ltd. and Promasodor confirms the availability of milk powder in remote areas of the country hence driving the market.
Promotion of yoghurt as substitute product for dessert in the Kenya market affected the retail sales of ice cream during the period leading to lower growth rate.
The entry of Aliko also resulted in increased competition with local firms such as Brookside Dairy, the country’s largest milk processor, alongside New KCC and Githunguri Dairy Farmers Cooperative.
Unfavourable exchange rate of local currency compared to USD impacted the Kenya dairy product market growth negatively leading to lower CAGR.
It has also been speculated that the future plans of many small market players such as Eldoville Dairies Ltd. and NKCC to increase their production capacity and distribution network across the nation will push the overall sales of different segments of dairy products.
Adedapo Adesanya