Dairy Nourishes Africa (DNA): Empowerment Through Partnership

Africa, already home to over 1.3 billion people, will lead the world in population growth by the end of the century, nearly doubling over the next 30 years. The rapid expansion complicates valiant efforts to eradicate poverty, combat hunger and malnutrition, and to cope with a changing climate and dramatic weather patterns. Dairy Nourishes Africa (DNA) is building a 15-20-year public-private partnership to address some of these challenges through the power of dairy and drive the accelerated transformation of African dairy industries. This cross-sector partnership leverages the collective strength of the Global Dairy Platform (GDP) and a wide array of industry, community, and governmental stakeholders. 

Sponsored by the Global Dairy Platform with support from Land O’Lakes Venture37 and Bain & Company, the DNA initiative utilizes a market systems approach to increase incomes, improve health and nutrition, and build more resilient communities across the African continent. Through a holistic effort to foster and support activities throughout the dairy ecosystem, DNA takes an enterprise-centric and government-aligned approach to grow consumer demand, drive dairy enterprises to their full potential, significantly increase farmer production, and create a supportive and interconnected operating environment in which the dairy industry can thrive. DNA has started initial pilots in Tanzania with a planned, phased expansion into other East African countries where there is potential for catalytic impact, such as Kenya, Uganda, Rwanda and Ethiopia.

The dairy industry has a critical role to play in feeding East Africa’s growing population and reducing the chronic malnutrition that affects 21% of the region’s population. Large dairy processors have significant processing capacity throughout key milksheds, yet are highly under-utilized, producing at 20-50% capacity and struggling to achieve profitability. The market for processed dairy products is also underdeveloped, representing less than 5% of total volume of dairy consumed. However, the dairy industry is primed for dramatic growth, with a strong foundation to increase livelihoods and improve the regions’ nutrition status. 

Women in Dairy

Women constitute 70% of the dairy sector labor force in East Africa and are significantly involved in milk production and the marketing of dairy products. However, women’s participation in other parts of the value chain is limited at best, with most benefits directed towards men. Women equally face significant time and mobility constraints, are often neglected by extension and input service providers, and have difficulties in accessing financing as well as incubation and acceleration services.

DNA: Empowerment Through Partnership

Dairy Nourishes Africa focuses on increasing the participation of women and youth across the dairy value chain – as critical actors in the production of dairy products and target consumers. In addition, DNA understands the necessity of creating opportunities through inclusive enterprise. This work is done through farmer-allied enterprises, or businesses that are committed to strengthening the capacity of farmers and treating them fairly, especially women and youth. Farmer-allied enterprises understand that this is key to a successful business model and long-term prosperity in the communities that they operate in and source from. 

DNA and its unique partnership model provide world-class advice and expertise to farmer-allied enterprises from leading global companies including GDP members and Bain & Company, through innovative incubation and acceleration activities. This type of deep engagement would typically only be afforded by Fortune 500 companies. Most recently, DNA signed an MOU with Sebadom, a woman-owned dairy processing company located in Tanzania, to take part in DNA’s acceleration program. This work will build upon DNA’s early successes and solidifies DNA’s commitment to women’s empowerment through partnership and collaboration. 

Grande Demam: A DNA Case Study

Grande Demam is a small-medium sized dairy processor located in Arusha, in the heart of Tanzania’s dairy country. In early 2020, Tanzanian borders closed due to COVID-19, collapsing the tourism industry and cutting off Grande Demam’s primary source of revenue. As demand dried up, this small, farmer-allied enterprise 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%, and worried about its ability to secure offtake from its farmer suppliers. 

After less than 6 months of support from DNA and the initiative’s now repeatable development model, Grande Demam’s business stabilized, protecting the livelihoods of its 20 employees and ~800 smallholder suppliers. Impressively, the business exceeded annual FY19 revenue by >35%. The management team was also equipped with a medium- to long-term value creation plan, giving the business a playbook for resilience. This set of recommendations included repositioning for more B2C sales (diversifying from B2B) and expanding their product line to include faster-moving goods that create a 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.

As DNA expands across East Africa, the initiative will scale  its repeatable model to other dairy enterprises, such as the women-owned Tanzanian dairy processing company – Sebadom.