The Demand for Dairy Products in Kenya

This policy brief (the first of five tailor made for policy makers) highlights the high demand for dairy products in Kenya. Dairy products are important food budget items for many families in Kenya. A survey carried out in 1999 in Nairobi and Nakuru found that households spent an average of 18% of their income on dairy products, second only to their expenditure on cereals such as maize (27%).

Almost all dairy product consumption is in the form of liquid milk. In Kenya, 86% of this milk is marketed raw; only 14% is processed. Demand for both types has increased significantly over the last 10 years.

Other key points are:

• Kenya milk consumption levels are among the highest in the developing world. Most of the milk bought is raw milk supplied by the informal dairy sector.
  
• Mostly because of its higher price, processed, pasteurised milk is consumed in much smaller amounts, except in Nairobi. Studies indicate that this formal market will grow only as household incomes increase. The informal market is thus likely to predominate for many years to come, as it is driven by demand from mostly poor consumers.
  
• Dairy sector policy should recognise the role played by both the informal and formal sectors in the market, and should support their harmonious coexistence and development in the medium term, while aiming for growth in the formal sector in the long term.