STUDY; Facts On ATM Milk Segment In Kenya That Buyers Should Take Note

This article is from a study on the ATM milk market segment in Kenya; as outlined-out by Mr. Julis Mwaura of Tassmatt Agencies Limited, a leading milk ATM entrepreneur in Kenya and the following can be concluded:

1. 1. The Kenyan ATM milk market is growing but concentrated in a few towns, mainly in Nairobi County and neighbouring counties. However, there is a likely general trend of the market segment spreading to other urban areas if the sector is supported. The future potential of the ATM market segment is in targeting growing urban areas across the different counties and targeting all categories of income earners.
   2. The ATM milk market is expanding based on affordability of milk compared to pasteurized packaged milk and has the potential of expanding the formal milk market share beyond the current 30%. to more consumers.
   3. The flexibility in quantity of milk that is sold through milk ATM market segment has enabled consumers to access pasteurized and potentially safe milk thus contributes to household nutritional security. However, the finding indicate that some ATM milk does not meet the safety standards that comprise its value proposition to consumers and the industry.
   4. Consumer perceptions of milk quality were most important in making decisions about where to purchase ATM milk.
   5. The growth of the milk ATM market is linked to a shift from the initial reliance on imported technology towards more locally fabricated machines, which has reduced reduce the cost of the machines. This has stimulated the development and expansion of fabrication and manufacturing industrial cluster. However, this has led to unregulated fabrication that is compromising the quality of these Milk ATM machines in Kenya.
   6. The business ecosystem around the milk ATM retail market is expanding opportunities for job and business creation. In addition to fabrication of milk ATMs, other businesses that have emerged include milk pasteurizing, transportation, milk cooling systems, milk-handling equipment, servicing of the machines and sale of spare parts for milk ATMs in Kenya.
   7. Future growth of the ATM milk supply chain is anchored on
      i) enhancing design of cost-effective,locally fabricated, automated quality assured machines (including calibration, CIP and improvement in energy efficiency);
      ii) building consumer awareness on quality of ATM milk as pasteurized milk since some consumers perceive it as raw milk, and
      iii) a stronger, well-thought through regulatory framework that are more enabling and supportive of expanding milk ATMs quality-oriented market segment. The gaps in regulations for ATM machines and ATM milk (with regulations still in the draft stage) have implications for consumers and the regulator, in terms of food safety concerns as well as opportunistic behaviour of some fabricators, for example use of non-food-grade materials so machines are cheaper to make. With the relevant policy and regulatory framework being in limbo, there has been a rise of food safety issues in the ATM milk market segment.
   8. In terms of future outlook of the milk ATM market segment, the following can be concluded,based on scenarios built:
      • The business-as-usual scenario (status quo) projects the future potential growth of the ATM milk market segment by factors of 2.1–4.4 over the next 10 years.
      • The ATM milk market segment is likely to grow in the future, but it is sensitive to policy andmarket changes. It has the potential to encroach on the informal milk market segment,offering an alternative source of milk to consumers and resulting in maximum growth by afactor of 5.8 of ATM milk volume supplied over the next decade.

Recommendations

• The milk ATM market segment has the potential to be a game changer in the process of formalization of the milk marketing sector if supported with relevant policy and regulations. GoK could fast-track policy and regulations to address unsafe operations and improve consumer confidence in the ATM milk product in order to utilize its potential, mainly linked to its price competitiveness, to be a game changer in the process of formalization of the milk marketing sector.
• Despite ATM milk price competitiveness, food safety issues along the supply chain must be addressed. To enhance safe milk handling along the ATM milk supply chain the ATM business operators supported by Government of Kenya, consumer organisations and other stakeholder need to:o Enhance responsible behaviour along the supply chain through labelling and effective traceability systems, which will enhance consumer trust of pasteurized milk. This will require development and deployment of standard operating procedures at the different nodes of the supply chain.

  o Enhance capacity of the operators through a training programme. KDB can involve other parties to assist in this process, such as the public health department and consumer and food safety lobby organizations. This relates to development appropriate training curriculum and identifying effective means of delivery.

  o Work with other agencies, such as the Kenya Revenue Authority to enhance access to cheap food-grade materials, and with KEBS to development and ensure compliance with fabrication standards, to address the quality issues in ATM milk machines. This also calls for working with industry actors to build capacity for innovation in developing quality, affordable technology that meets the required standards.

  o Encourage private sector investment in expanding the ATM milk market, to develop a strong and robust chain that supplies pasteurized milk to ATM market retail outlets in additional towns.

   

• Sensitizing consumers and assuring them of quality can grow the market prospect for ATM milk while building on its price competitiveness.
• With the investments already made by operators, the upcoming regulations should facilitate improvements to the supply chain, for example a phased approach can be developed to stop the use of non-food-grade materials, to safeguard the interest of the investors and move to regulated machines. On the supply side, key enablers for the supply chain are enhancing growth of co-pasteurizers and building stronger linkages between milk ATM machine operators.
• GoK could enable KDB to strengthen its capacity in terms of enforcement officers, data management systems, ATM milk traceability systems and appropriate systems for registering and monitoring ATMs.
• Future growth depends on policy and market interventions in the sector by KDB that takes a less prescriptive approach but empowers the different operators along the chain . The interventions to facilitate growth in the milk ATM segment will come not only with finalizing the market and policy direction for the segment but also with meeting KDB capacity needs in terms of enforcement officers, data management systems, ATM milk traceability systems and appropriate systems for registering and monitoring ATMs. Further, increased investments in laboratory capacity and equipment as well as use of technology by KDB (e.g. using geographic information systems to map the milk ATMs and their suppliers) is required to enhance compliance rate.

End

To purchase quality, cost effective and durable Milk Dispensing ATM Machines in Kenya Today, talk to Tassmatt Agencies Limited via 0726-410068, inline with other related milk systems like milk pasteurizers, milk coolers, milk chillers, water purification systems, water atms in Kenya, salad and cooking oil ATMs in Kenya.