How to Start a Milk Value Addition Business

Milk in its original form is a highly consumed product in many households. Apart from being consumed in its original form, there are other ways milk is consumed. You can ferment it and make different traditional delicacies like Mursik, Mala, Maruranu etc. In fact as long it’s accessible and affordable, every household would love to consume it regardless of it form. This therefore means that milk is a commodity in high demand and you wouldn’t go wrong in any business dealing with milk. In this post we will be looking at how to start a milk value addition business.

How to Start a Milk Value Addition Business- products you can make

When it comes milk value addition business, you have a variety of products you can make. Below are some of the most common:

Packed fresh milk- this is pasteurized milk that is packed in tetra packs, long life packets or short shelf life packets that needs refrigeration. You can decide to sell your own branded milk if you have sufficient supply. This is a highly competitive field but that shouldn’t bother you much if you make high quality milk and target to sell in areas where the big brands aren’t dominant.

A good strategy to make your brand known is to ensure during draught seasons when milk is really scarce that your milk can be found on shelves of supermarkets and shops. This is the best time to try penetrate markets you couldn’t before because even the retailers need milk.

Yoghurt in different flavors- one of the best ways to attract clients for your yoghurt brand is buy having different flavors. You can opt to sell it branded or if you don’t have the capacity, sell in milk ATMs shops as an addition to fresh milk. Some of the common flavors include vanilla, strawberry, pineapple, mango etc. You only need to buy the edible flavors from dealers who deal in food flavors.

Skimmed milk/milk powder- making milk powder involves converting the liquid milk into powder. This needs special machinery that might be a bit expensive but if you have the money why not. You can then pack in in containers or packets.

Mala/fermented milk- mala is a really loved Kenyan delicacy that is used as an accompaniment with Ugali. You can make your own either branded if you have a lot of milk that can help you be able to supply the wide market. If not you can make it and sell in your milk ATM shop.

Cheese- this is a by-product of milk that is made by curdling milk with the aid of an enzyme/coagulant known as rennet. It usually begins with adding a starter culture that converts the lactose in milk to lactic acid and then rennet is added. Some cheese can take more than a year to make but other types take only a few days. Depending with the type of cheese, it can last years and still retain its quality and taste.

Butter- butter is made by churning the milk cream to a semi-solid state.  The cream is then churned at high speeds to make the butter. It is used as a spread on bread, vegetables especially traditional ones like kunde, mrenda, terere, managu etc., for baking etc. There is a huge market for this.

Ghee- ghee is another by product of milk that is made from clarified butter. It can be used as an alternative to butter and is more suitable to people who have a high intolerance for lactose or generally dairy products.

How to Start a Milk Value Addition Business- some of the equipment you need

Milk pasteurizer- a milk pasteurizer will help you produce high quality milk products because the milk isn’t heated directly and therefore it can’t burn. It also helps the milk retain its original natural taste and the milk is more stable. A milk pasteurizer also helps you be more efficient and reduce time of production because you are able to pasteurize more milk at a faster rate per every run.

Pasteurizers come in different types depending with method of heating. You can choose from an electric pasteurizer, gas pasteurizer or wood pasteurizer. Of all these an electric pasteurizer is more convenient and also cheaper than a gas pasteurizer. For wood it depends with the cost of wood and sometimes you might be in a position to get it for free.

Homogenizer- if you are receiving milk from different cows and/or farmers, you need a homogenizer. It is used to mix milk from different sources so as to come up with a uniform and consistent mixture of milk. They break the fat globules from their normal size of around 18 micrometres to 2 micrometres. This helps to ensure that the products are of the right texture, quality, taste etc.

Milk chillers- chillers act a dual purpose. They chill i.e. lower the temperatures of milk to levels that the bacteria that causes milk to go bad can’t survive. They also play the role of storing the milk until when it is needed.

Milk holding tanks- when you are receiving milk from different sources, you need to hold it somewhere before you move to the next stage production. This is where you check the quality of the milk. For example checking if it has been watered down as well as the suitability of the milk by checking if it has any disease causing bacteria, foreign material, etc.

Other requirements

Let us now look at what you require in place to successfully start and operate this business.

Training/trained manpower- you can go two ways about this; either you hire trained people to help in production or you get trained yourself. However if you plan to be doing this in big volumes for selling to the big market then you will need to hire trained people or have those you have hired receive the training. This will help you produce best quality products that meet KEBS standards and also not harmful for consumers regardless of whether they are for mass market or not.

Suitable premises- This business requires you to have a setup for production processes especially if you want to produce for mass market. You will therefore require some of the equipment discussed above. This means that you need a premises that can accommodate the machines as well as the right setup.

The premises should also have all the necessary amenities like electricity, drainage, connected the sewer line and also reliable supply of clean water. It should also be accessible to suppliers and be in a safe place where employees and suppliers can easily access it even at night without worrying about muggers.

Business permits, licences and certificates- any legal business operating in Kenya is required to be registered with the relevant authorities and pay for the necessary permits/licences. With milk value addition, the employees will also need to have medical certificates to prove they are medically fit to handle food for human consumption. What more they need to observe high standards of hygiene.

Ingredients- the other requirements you will need for this business are the ingredients for making butter, cheese and yoghurt. These include food colors, flavouring and starter cultures.

How to Start a Milk Value Addition Business- implementation

Market survey

A market survey is the most important initial undertaking you need to carry out. It is what gives you an idea of how the market will respond to your product. It helps you know if your target market is suitable for your products. You are also able to tell if there is competition and how fierce it is. From a market survey you can pick gaps that have not been utilized by competitors that you can leverage on and also get feedback from potential clients what they like or don’t like about existing brands or what they would like to have from a new product.

Business plan

The first thing to do is coming up with a good business plan. A business plan is a written document containing details of how the business will be operated i.e. how to start, finance and grow the business. It also includes the objectives of your business, how to achieve them and the key stakeholders like key positions, financiers etc.

Sourcing for milk and ingredient suppliers

The next most important thing to take care of before going further with the implementation of the  business plan is to source for reliable suppliers of milk. As with any business, suppliers can break or make a business. Make sure that the supplier(s) offers high quality milk. The milk should not be watered down and should be handled in a very hygienic manner. The equipment transporting the milk should meet high standards of cleanliness too. As for the ingredients make sure that they meets KEBS standards.

Sourcing for right equipment

The other very important thing to do now is to source where you will acquire high quality equipment. This also where you can take a hit and loose a lot of money if you aren’t careful. Go for high quality equipment that meets KEBS standards. For equipment like pasteurizers, holding tanks and chillers we recommend you buy from Saset Limited. Their website is www.saset.co.ke. They are the market leaders in manufacturing of top quality products that meet KEBS standards. Because they are a local/Kenyan business, you get to enjoy easily accessible repair and maintenance services. When you buy from them they transport, install and commission the equipment to you for free.

Business registration

After coming up with a good business plan you can now go ahead and register the business and get all the other required licences, permits and certificates. In Kenya sometimes you need to pay for several permits and certificates to avoid getting in trouble with NEMA, KEBS, KRA, County Council among others.

Searching and renovating the business premises

A good business premises is the one that has enough space to accommodate the machinery set up as well as free movement of people when working. It should also be located at a convenient location not far from the public amenities. It should be connected to electricity, sewer line, drainage and water.

From there you need to renovate it accordingly and this is where you might need an interior designer or someone who can help you come up with a good layout of how the setup should be. You can visit other plants if possible to see how their setup is done and borrow a leaf from them. As you renovate consider thing like storage, how raw materials will be received, how finished products will be loaded for dispatch to the market, how employees move about, how production will flow from initial stage to final stage etc.

Hiring qualified personnel or getting trained

Producing some of the aforementioned products needs a trained person. If you are getting into this field because you have a background in it either because you were working at a milk products company or trained in milk value addition you are good to go. However for mass market production, you might not be able to do it on your own and will need trained manpower. You can opt to hire trained people or train them yourself if you have the knowledge. You can also outsource training at a fee.

On the other hand you might not be having the knowledge and might not be able to hire trained people and probably you just want to start small. In such a case you can get trained yourself. This is recommended even if you are hiring trained people or paying for their training. Knowing how things are done is always important so that you can oversee the quality of products as well as how the products are produced.

Marketing

Once you start production and introducing the product to the market, you now need to start marketing. Because you are beginning and probably on a tight budget, you need to be strategic and smart. Utilize the most cost effective channels/mediums possible like social media, posters at strategic places like shops, low cost adverts on upcoming TV stations and radios that are in desperate need of ad revenue etc. we advise that you set aside a certain percentage of revenue for marketing purposes. This percentage can increase as the business grows in revenue and production and also as expands.

Scaling up/expansion

Once the business has established and you have bagged loyal customers and worked on feedback from clients to improve your products, you can now start scaling up production and expanding your market to other regions. Use the experience gained so far to launch into new markets.

Final word

Milk value addition is a lucrative business due to the wide range of products as well as high consumer demand. Every household in Kenya uses a milk product almost every day albeit some directly from their cows. However in most urban centers milk and it’s by-products is in high demand and consumed daily. You therefore never go wrong with this type of business.

We hope that you find the above information helpful to you in starting a milk value addition business. All the best as you go for it.