A litre of raw milk at the farm goes for Ksh.30-50. Each litre of milk can produce four tumblers of 250ml yogurt, which currently retail at Ksh.60 each.
In a nutshell, a litre of milk if converted to yogurt and marketed the right way can give as much as Ksh.220 which is equivalent to 500% value addition (or 300% when you deduct all expenses). Does that awaken your business curiosity? Well, if it doesn‘t you probably aren‘t an entrepreneur.
Yoghurt Production & Supply Business in Kenya
Demand for yoghurt has been rising steadily since 2010 and the market remains significantly under supplied. This means there are opportunities for startups to thrive especially if they offer specialized services, good branding and unique recipes.
The good thing about this kind of business is that it is relatively easy to start and contrary to common belief, it does not cost much to set up. With as little as Ksh.100,000 you can start small production plant and re-inject the capital as your company passes various stages of growth.
Here is a simple step-by-step guide on how you (yes you) can start a successful yogurt making business today.
Step 1: Train Yourself on How to Make Yogurt
Julius Yego learnt how to throw the Javelin online and he became a world star…and you too can learn how to prepare a world class recipe on your own through constant practice via this medium. So go to Youtube, Food.com or any other top website and teach yourself how to make nice yoghurt. Then invest in 1 litre of milk and use it for practice.
Step 2: Invest in Equipment
With a small budget you need to plan wisely so as to get maximum value from each investment. For starters you will need a few high quality sauce pans (sufurias), thermometer, milk sieve (kichungi), weighing scale and a firewood kitchen.
As your company advances you will need to think about packaging. For that, you will approach a company that manufactures plastic tumblers – a very well-known example locally is TechPack Industries Limited which is located in industrial area Nairobi. With as little as Ksh.20,000 you can get enough branded tumblers that you will be using to package your yogurt for supply.
Later on you will find the need to invest in a pasteuriser to replace your firewood kitchen. A pasteurizer is basically an advanced boiler and a good one goes for Ksh.350,000 or thereabout. You can get one supplied by local firms; a good example being FinKen Holdings Limited located Industrial area of Nairobi.
Step 3: Get KEBS Certification
If you are producing good quality products with the recommended packaging and stuff like that, getting a KEBS certification is a no brainer. A typical certification process will cost you about Ksh.32,000.
Step 4: Get Started & Market Widely
Quality – check. KEBS – check. Packaging – check. The only thing that is missing is the market. You can start small by marketing to neighbouring households and institutions. For instance, you can approach your nearest kindergarten and give them a discount so they can be ordering from you frequently. You can even hire a few salespeople who can be hawking your products in commuter buses.
Besides that you will need to approach the big retail outlets – consider supermarkets, government institutions and so forth. What you should basically do within the first few months of operation is to build a name for yourself and to get as many retailers as possible to stock your product.
How Much To Invest
You can start without the pasteurizer and use around Ksh.100,000 total to set up around a firewood kitchen. However, if you are really considering serving a big market then it‘s important to factor in the Ksh.350,000 price of the pasteurizer.
How Much To Expect In Return
You can buy milk from farmers at a price of Ksh.40 per litre and then sell your final product at Ksh.200 per litre or Ksh.50 per 250ml Tumbler (Actually the current market price per Tumbler of Yoghurt is Ksh.58). Assuming you sell 1000 litres per month, that will be equal to Ksh.200,000 in sales revenue. That could translate to a net profit of Ksh.100,000 per month (i.e. after deducting all expenses).
The ball is in your court. Remember, even those big companies you see today were once small ideas that seemed too difficult to implement. So psyche yourself up and go for it – all the best.