The milk shop trend

The rapid growth in the number of small milks shops in South Africa may hold some pointers toward opportunities for similar developments in other African states.
The establishment of milk shops could improve the quality of milk offered in the cities and towns of Africa and promote small-scale processing of value-added milk and fruit juice pro The rapid growth in the number of small milks shops in South Africa may hold some pointers toward opportunities for similar developments in other African states.
The establishment of milk shops could improve the quality of milk offered in the cities and towns of Africa and promote small-scale processing of value-added milk and fruit juice products.
Uganda, for instance, produces 600m lifters of milk a year, but its larger dairy processors only handle 30m lifters.
Recent government moves in Kampala to ban the sale of raw milk which if often unhygienic were quashed due to pressure from traders in the milk.In South Africa, the big growth in the number of dairy shops over the past five years has been part of a trend of startups of small businesses which has been fueled by the large amounts paid out in severance packages to white former-civil servants who have been replaced under the new majority government. Accordingly, the largest concentration of milk shops is in the capital, Pretoria, where some observers estimate that they now supply 20-30% of the fresh milk market.
What is required to set up a dairy shop differs greatly, as does the quality of the products offered. The most basic equipment would be one refrigerated tank, from which raw milk is tapped off. But municipalities may require pasteurization on the premises – or it may be a necessity if the sources of milk are dubious. This means operators must at least have small on-line or batch pasteurizes in which the milk is pasteurised, then pumped into a second bulk cooler. Pasteurised milk is then dispensed from this.
In South Africa, two fabricators specifically address the market which has arisen for dairy shop equipment.
Anton Gilfillan of Central Milk of Middelburg, makes milk tanks from ordinary chest freezers which are adapted by lining them with stainless steel and fitting outlets from which the milk is tapped. The tanks keep the milk at 2-4™  °C, and it is stirred constantly to prevent the cream from separating. Gilfillan offers tanks of capacities between 50 and 800 litres.
Pieter De Lange of De Lange Melkmasjiene of Witbank, a long-established supplier to farmers and dairies, does not agree with these modified fridge-tanks. His tanks supplied for milk shops, although scaled down, are of conventional construction because they must have “dairy standards”, he says. He also does not agree with batch pasteurisers (which Gilfillan offers) because they result in milk standing for hours, allowing bacteria to breed. Batch pasteurisers are okay for yoghurt and cheese production, he says.
Gilfillan believes that milk shops are the suppliers of the future in the raw milk trade simply because they offer convenience, quality and lower prices than packaged milk from big processors. Customers to milk shops bring their own containers or buy milk packaged by the shop, normally in simple plastic bottles. In one case Gilfillan points to in South Africa, a large dairy farmer virtually took over his local fresh milk market by installing 60 tanks in various shops.
De Lange is not as optimistic as Gilfillan about the growth of milk shops.
Both Gilfillan and De Lange have been supplying in the rest of Africa , Zambia, Kenya, Rwanda and Uganda, for instance. Gilfillan is particularly optimistic about sales possibilities for gas-powered units in areas without electricity.
One thing the two men do agree on is that in the competitive fresh milk market, value-adding is the way that milk shops can be profitable.
Milk shops generally offer higher prices to farmers for their milk than the big processors, and much lower prices to the consumers. In South Africa, the capital costs of setting is about $20,000-$45,000 (depending on whether they have pasteurizes). The shops also normally have to pay high rentals because they are best located in high-traffic areas.
The difficulties in making a profit are therefore patent. Shops which are profitable typically offer yogurts, cheeses, fruit juices, and common convenience consumer products.
Capacity to value-add is also essential for the shops because seasonal oversupply of milk means that, for instance in December, milk supply to shops may exceed demand because many customers are on holiday. Again, periodic shortages of milk are a threat to the shops.
In order to value-add, extra equipment is required. Both Gilfillan and De Lange offer processing equipment for small-scale yogurt and cheese-making, and fruit juice-related equipment.
In South Africa, debate about the milk shops has been most intense around the issue of quality and hygiene. The more basic milk shops sometimes have bad hygiene standards and their milk can be dangerous. They differ little from informal traders who sell milk from open cans on the sidewalks in the poorer areas.
Because of the low margins involved in fresh milk sales, volume sales are required. Most of the shops thus have to draw milk from different farmers, and the quality of the milk can accordingly not be assured.
Pasteurization is obviously the safest solution, but it increases costs.
Gilfillan says milk shops are particularly successful – both in hygiene and profitability – where they are operated by a family member of the farmer-suppliers, or in close co-operation with them.
GILFILLAN: flow.jhb@nde.co.za Tel +27 11 4774923 Fax +27 11 4778062
DE LANGE: delmilk@penta-net.co.za Tel +27 13 9322921 Fax +27 13 9322923
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