How Kenyatta’s Brookside Dairy plans to dominate market

Brookside Dairy is 50pc owned by the Kenyatta family.
Brookside Dairy is 50pc owned by the Kenyatta family. PHOTO/COURTESY
East Africa’s biggest milk processor Brookside Dairy is seeking to double its sales within a year in a well calculated plan to further reinforce its dominance of the local dairy industry.

The company, which is majority owned by President Uhuru Kenyatta’s family, is hoping to hit its target by promoting its products through mass media advertising, online adverts, in-store marketing, as well as special events appearances.

“We plan to make a lot of investment including branding through aggressive media advertisements and billboards in the city to extend our lead in the market which now stands at 67 per cent,” Brookside’s marketing director Oliver Mary said during the recent launch of two new yoghurt flavours under its Delamere brands.

Brookside, which made Sh15.4 billion sales in 2013, is 50 per cent owned by the Kenyatta family, 40 per cent by French food processor Danone and 10 per cent by a Dubai equity firm Abraaj Group.

Founded in 1993, Brookside now has a distribution network of more than 200,000 outlets – the largest milk collection network in East Africa, dealing with 260,000 farmers in Kenya and Uganda from whom it collects 2 million litres of raw milk daily.

The company has in recent years acquired its smaller rivals, among them Buzeki – the producer of Molo Milk and Kilifi Gold– Ilara, Delamere and SpinKnit (the producers of Tuzo).

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The buyouts have place Brookside way ahead of market above the New KCC and Kiambu-based Githunguri Dairy (the producers of Fresha) – both of which control a combined market share of 18 per cent according to a study by Tegemeo Institute.

Brookside’s ambitious expansion plan comes shortly after the company announced in March that it was preparing to exit the Tanzanian market by selling its entire stake in Brookside Dairy Tanzania to Danone.

The company that gained a footing in Tanzania in 2004 when it acquired the Arusha plant of the defunct State-owned Tanzania Dairies – promising to revive the firm and eventually a UHT milk processing plant.

This, however, did not materialise immediately and soon Tanzania officials grew impatient and accused Brookside of exporting raw milk to Kenya for processing instead of establishing a local factory.

Brookside argued that Tanzania did not have adequate supplies to feed a factory and maintained that in order to viably process milk in Arusha it needed to collect at least 60,000 litres of raw milk dairy.

Ever since, the relationship between Brookside and the Tanzanian government has remained lukewarm and it appears like the firm has finally succumbed to pressure from high quarters to divest from the country.