Milk Distribution Factsheet

 

Consider this:

• Total processed milk in Kenya ( as opposed to raw) = 636 million liters.
• The average consumer price of processed milk per liter – Kshs. 100.
• Total value of processed milk - Kshs. 63, 600,000,000 – Kshs.63b
• Average distributor share of processed milk value – 10 %
• Distributors value of processed milk = Kshs. 6,360,000,000- Kshs. 6.3 billion.
• 
  

Mouthwatering, right?

Yes but, not all processed milk passes through the distributors.

But, whatever way you look at it the figures due to distributors are in billions. Start distributing milk and get a share of the billions.;)

Becoming a milk distributor is easier than ever before. What with long-life milk and competition among processors.

But, to get it right you need to understand the market and the numbers.

Thus, the reason to read the new Milk Distribution Factsheet which gives you answers to the questions:

• What is the market for milk like?
• What do you require to start?
• How much do you require to start?
• What is the process?
• How much are you likely to make?



In addition, you get important facts, details, figures and contacts to enable you to start the business. As updated as November 2021.

Contents included in the dense factsheet are:

Overview

• The Opportunity Size
• Caution
• Background
• Existing Distribution Methods
• The Market
• Production:
• Classification of Milk Processors:
• Types of Milk Products
• By processing method:
• By packaging:
• Trends
• Demand
• Demand Triggers
• Demand Curtailers
• Retailer Satisfiers
• What to expect:
• Competition
• Room For Innovation
• Lowest Barrier
• Highest Barrier
• Highest Demand
• Lowest Demand
• Frequency Of Use
• Retailer Switching Costs
• Discovery
• Loyalty
• Differentiation
• Risks
• Why It Could Work
• Why It Could Fail
• Market Entry
• Milk Distribution Resilience to Economic Downturns
• Ease Of Exit
• Involvement
• Business Outlook
• Key Activities
• Resources Required
• Process
• Basic requirements:
• Capital, Costs, Revenue & Profits
• Medium Level Set-up
• Price Of Milk
• Pre-operational Requirements
• Premises
• Utilities
• Renovations
• Stock
• Licenses
• Operational Equipment (Kshs.)
• Sales & Management Equipment
• Safety & Maintenance Tools
• Marketing Equipment
• Stationery (Kshs.)
• Transport & Communication
• Manpower (Kshs.)
• Working Capital
• Miscellaneous Expenses
• Total Capital Required
• Monthly Expenses
• Monthly Revenue Scenario
• Sales:
• Cost of Goods Sold:
• Gross Profit:
• Monthly Operational Expenses
• Sales Expenses
• Total Monthly Expenses
• Net Monthly Profit
• Milk Processors
• Much more

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Excerpt:

Case Study: Setting up a milk distribution business in Embu town. We look at all what you need and how much you can make :

Location : Embu town

Population - 64,979

Dominant brand: Mount Kenya from Meru Cooperative, approximate 110km away

Reason for Dominance: Availability, Quality

Local brands : Superior

Smaller brands - Royal

Medium Level Set-up

Brand we stock: Option One: Fresha by Githunguri Dairy

Why: Strong brand without a strong local presence, easier to introduce. Marketing support, customer trust.

Processor location: Embu, Githunguri Dairy has a depot in Embu.

Tare

We will set up a semi-formal set up, with plans to scale.

PRICE OF MILK

Informal Retailer to Consumer:

• 500ml - Kshs.50
• 200ml - Kshs.30

Githunguri Farmers Cooperative Price to Distributor

500ml (Fino)

• In carton of 12 packets
• Price per carton - Kshs. 504
• Rate per packet - 42

500ml (Pouch)

• In carton of 12 packets
• Price per carton - Kshs. 468
• Rate per packet - 39
• Distributor to Retailer per packet - Kshs. 44
• Distributor Margin per packet - Kshs.5
• Retailer to consumer per packet- Kshs.50
• Retailer Margin per packet - Kshs.6

200ml (Pouch)

• In carton of 21 packets
• Price per carton - Kshs. 357
• Rate per packet - Kshs.17
• Distributor to Retailer per packet - Kshs. 22
• Distributor Margin per packet - Kshs.5
• Retailer to consumer per packet - Kshs.25- Kshs.30
• Retailer Margin per packe- Kshs.3 to 8.

250ml (Fino)

• In carton of 24 packets
• Price per carton - Kshs. 516
• Rate per packet - 21.5

We are targeting informal retail. Thus initially we will focus on the fast-moving packaging and quantities. Thus 500ml pouch and 200ml pouch. Gradually, we will introduce other packaging

Pre-operational Requirements

Premises

We will acquire premises for storage and to serve as a distribution point. Since we will be delivering the milk to the retailers the shop must not be in a prime location........................