This archive report was first published on 1 October 2019.
Kenya's milk consumption has been on a steady rise, with a 11% increase in the first quarter of 2019. According to data from the Kenya Dairy Board, the country retained its position as Africa's largest per capita consumer of milk, with consumption rising to 165 million litres from 148 million litres in the period under review.
Kenyan consumers consumed an average of 110 litres of milk per year per person, up from 80 litres last year. This growth is attributed to a jump in disposable incomes, population growth, and urbanisation.
The country's major milk processors, including Brookside, New KCC, Githunguri, Meru, and Kinangop, produce more than 75% of the milk on the market. Brookside, controlled by the Kenyatta family, accounts for over 30% of the market share, making it the biggest beneficiary of the milk boom.
According to the UN Food and Agricultural Organisation, milk consumption is closely linked to per capita income developments, especially in developing countries. Kenya's per capita incomes are rising compared to the rest of Africa, with the country's economy growing at an average rate of six percent in the last couple of years.
Kenya's dairy industry is valued at over Sh184 billion, contributing over four percent to the gross domestic product. The industry's growth is driven by increasing domestic milk production, which averages 5.3% per year, and dairy processing capacity, which grows at seven percent annually.
However, the country's production costs remain high, making it uncompetitive on the export market. The prices of feeds are the largest impediment to profitable milk production, with Kenyans buying milk at higher prices than much of the rest of Africa.
Finland is the world leader in milk consumption, followed by the Netherlands and Sweden respectively. Kenya has a processing capacity of 1.4 billion litres per annum, with the high consumption of milk leading to the burgeoning of the milk value chain.
