The Lare Milk Dealers find their niche

Our East and Southern Africa series is dedicated to the achievements of five youth-led agribusinesses in the Nakuru and Kilifi counties of Kenya. Each of them has had remarkable success, and each of them has taught us something valuable about rural development that we can bring forward to other projects. All of the groups in this series are supported by Vijabiz, an IFAD-funded project dedicated to empowering young people through mentorship and agribusiness entrepreneurship.
 

High unemployment rates have been a challenge for Kenyan youth for many years. Instead of seeking traditional employment, many young people therefore decide to collaborate and start a venture of their own. Such was the case for the Lare Milk Dealers Youth Group. Originally formed in 2012, Lare is now a 15-member-strong group of young men and women based in Kenya’s Nakuru County.

From the beginning, Lare has focused on dairy: specifically, buying up raw milk from the county’s farmers and selling it to customers. Although this is normally a profitable venture, the group faced challenges from the beginning. There were already many similar milk processing businesses in Nakuru County, making it difficult for them to establish themselves on the market. They lacked sufficient equipment and storage space, limiting the amount they could produce (and the profits they could bring in). The group knew they weren’t reaching their full potential, but they didn’t have enough capital to take the next steps.

In early 2020, they heard about the Vijabiz programme through an advertisement. The programme, a collaboration between IFAD, the CTA, and the USTADI Foundation, offers mentorship and entrepreneurship training to Kenyan youth groups establishing their own ventures. It also awards grants to qualifying groups to help them get started.

The members of the Lare Milk Dealers signed up for the trainings right away. They soon began learning about the dairy value chain, including ways to add value to their products and to their business model that they hadn’t considered before. They also received digital marketing training designed to help them strategically position and sell their products on social media platforms.

At the end of the training sessions, Lare also received a grant of US$10,000 to boost their dairy business. Part of this amount was used to purchase a 200-litre pasteurizer and a refrigerator to safely process and store the milk. They also purchased a milk ATM – a machine that dispenses milk similar to the way typical ATMs dispense cash.

A thriving milk business – with a twist

Today, the Lare Milk Dealers have found their niche. Thanks to the training they received, they’ve found a way to contribute at a different point in the value chain – they now sell hay to the dairy farmers to be used as feed. Ensuring the cows are well fed boosts their milk production, which in turn has a positive impact on Lare’s milk business.

The pasteurizer is proving to be a worthwhile investment. Demand for pasteurized milk is high, which has allowed Lare to raise the price of their milk (from US$0.28 to US$0.46 per litre) – and meanwhile, their overall sales volume has increased too. The milk ATM is quite popular with customers – in addition to its innovative approach, it reduces interpersonal contact, allowing customers to purchase their milk with little risk of contracting COVID-19.

Thanks to the digital marketing training they’ve received, the group now sells their products through social media platforms such as WhatsApp and Facebook. This has allowed them to gain a foothold in the market and reach customers who were inaccessible to them at first.

Moreover, revamping the business has led to additional opportunities for Lare’s members. For example, many of them have received formal training in how to operate the milk pasteurizer – a transferable skill that will serve these youth well for a career in the dairy industry.

Lessons learned

Lare’s experience reminds us that there are opportunities all along the value chain – or, put another way, at multiple points throughout a food system – where youth can add value, find job prospects, and earn income. To ensure that youth can harness all these opportunities, they should be offered integrated support (combining skills training, mentorship, and finance and technology assistance). Investing in youth brings multiple benefits indeed: value chain growth, increased productivity, more job opportunities, and in this case, essential logistics services.

Listen to the voices of the Lare Milk Dealers Youth Group.

Learn more about IFAD’s work in Kenya.

Publication date: 08 September 2021