Dutch dairy is booming business: A window of opportunities for the Kenyan dairy sector
The Netherlands is traditionally known as a country with a big appetite for dairy products, including milk, butter and cheese. Nowadays, a modern and innovative dairy sector is responsible for the production of large quantities of these dairy products, both for the domestic market as for markets abroad. The Dutch dairy sector is known worldwide because of its quality produce. Not surprisingly, the dairy business is booming. This leaves room for opportunities regarding trade with Kenya as well.
In 2019, the estimated total export value of dairy products amounted to €7.9 billion, up €0.2 billion compared to 2018. The dairy sector alone contributed 7% to the Dutch trade balance. Put differently, about 7 cents for every euro that the Netherlands earns by trading with foreign countries can be contributed to the dairy sector. Also for the domestic market the sector’s impact is significant: 35% of its produce is sold locally and the dairy sectors provides employment for the equivalent of 49,000 full time workers.
Since the 1960s we have seen a trend of upscaling within the Dutch dairy industry, with a focus on increased efficiency. By 2019, the dairy industry in the Netherlands had a production value of 7.6 billion euros while production takes place at only 53 factories. In recent years, a larger emphasis has been placed on sustainability of the sector. Limiting the use of antibiotics and switching to green energy are examples of measures taken to reduce the sector’s ecological footprint. Quality and sustainability will remain key focus points of the Dutch dairy sector in the upcoming years.
According to the data of NZO, the Dutch dairy products make up less than 1% of the Kenyan market in dairy products. Kenya’s dairy produce mostly originates from the local producers or neighboring countries, which rely on less capital and technological intensive production methods. This leaves a window for opportunities for both the Kenyan and Dutch entrepreneurs.
These opportunities have not gone unnoticed. The Kenya Market-led Dairy Programme (KMPD), funded by the Netherlands Embassy between 2012 and 2019, aimed to contribute to an improved business and investment climate. More specifically, it worked towards an higher level of competitiveness of the Kenyan dairy sector in ways that were beneficial to various stakeholders within the value. Enhanced competitiveness is defined as the result of higher productivity, better quality of produce and a level playing field in the market. Through collaboration between the Kenyan and Dutch dairy sector stakeholders, an exchange of knowledge and skills, and enhanced trade relations, the competitiveness of Kenya’s dairy sector can be further improved in future years.
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