The Dairy Nourishes Africa project is working to advance transformation of the African Dairy Sector in Tanzania
Founded by GDP, Dairy Nourishes Africa (DNA), is a 15-20-year, public-private partnership leveraging the collective strength of the global dairy sector and local stakeholders. GDP is providing critical technical dairy capabilities in partnership with Land O’Lakes Venture37 (driving inclusive dairy development) and Bain & Company (accelerating the ability of critical dairy enterprises to grow and increase their impact). (See the GDP Website for more)
Learn more here about some early successes of DNA:
Grande Demam: A dairy processor mitigates COVID-19 impacts on business with support from DNA
Grande Demam is a small, farmer-allied dairy processor based in Tanzania’s milk shed. The business sources from ~800 smallholder farmers and produces yogurt, cheese and mtindi (fermented milk product), which it has historically sold primarily to hotels, lodges, and modern supermarkets.
In early 2020, Tanzania’s borders closed due to COVID-19, collapsing the tourism industry, which cut off Grande Demam’s primary source of revenue. As demand dried up, the business immediately faced enormous financial strain, experiencing a 70% decline in revenue and a 75% reduction in daily processing utilization. Grande Demam was forced to ask employees to work for only half the month, reducing pay by 50%.
When DNA engaged Grande Demam in July 2020, the business was concerned that they would soon need to lay off workers and stop buying milk from farmers to stay afloat.
With the support of DNA, Grande Demam embarked on a COVID-19 response and recovery effort. This included a full analysis of the business to identify immediate and near-term business solutions, including:
· Launching a sales campaign targeting new customers (e.g. local restaurants or fast food chains)
· Shifting production of slow-moving cheddar and gouda to mozzarella, yogurt, and mtindi (a fermented milk product) to match local demand
· Turbocharging last-mile distribution by hiring freelancers and providing branded bicycles to increase reach into lower-income segments
· Offering cheese in smaller pack sizes to increase product trial and meet consumer wallets
· Negotiation of deferred interest payments and potential debt consolidation on outstanding loans
After only four months, Grande Demam’s business has stabilized, protecting the livelihoods of its 20 employees and ~800 smallholder suppliers.
Impressively, the business is on pace to exceed FY19 annual revenue. The management team is also equipped with a growth plan, including repositioning for more B2C sales (diversifying from B2B) and expanding their product line to include faster-moving goods that create a more broad-based foundation for their product mix (e.g., milk). With DNA’s continued support, Grande Demam is well-positioned to achieve profitability and scale, becoming a notable player in Tanzanian dairy in the next 3-5 years.
Tanzania Processors trained in COVID-19 response and recovery to keep businesses operating
COVID-19 has forced African governments to put in place policies and mitigation strategies in place, resulting in significant restrictions on the movement of people, goods and services. Dairy processors – particularly those that source from and invest in smallholder farmers and connect them to markets – have been significantly affected, impacting livelihoods across the value chain as well as food security.
Bain & Company, in response to the COVID-19 pandemic developed a comprehensive toolkit for its clients to protect businesses and their employees, to help them recover from the acute impacts of the pandemic, and finally, to retool them for success in a post-COVID-19 future. DNA utilized this toolkit as the foundation of a streamlined and targeted COVID-19 response customized for small- to medium-sized enterprises in the African dairy sector.
To ensure that dairy processors are empowered to implement the recommendations, DNA has used a training-of-trainers approach to certify local dairy representatives from government, industry bodies, and the private sector, to facilitate share out of the tool. The training sessions, implemented by Land O’Lakes Venture37, began in Tanzania in November 2020, and are supported by the Tanzanian Dairy Board and the Tanzania Milk Processors Association. Trainings are being held both virtually and in-person due to poor connectivity in some locations and will be offered to 54 of the largest dairy processors nationally.
As of December 2020, Venture37 has trained 51 processors on topics from the response toolkit, including maintaining farmer relationships; ensuring continuity of production; securing customers; reviewing sales and marketing; managing finances during the pandemic; and health, safety, and quality measures for both employees and customers. Additional training sessions will continue to be held for more processors.