From by-product to nutritious drink: whey as a new source of nourishment in Ethiopia

Past the grazing pack of mules and donkeys, you are met by a small but busy group of children, their parents, and their extended family. Gathered around a small farmhouse in Ethiopia’s Chancho district, they come to sell the milk from their small herds of cattle. Zago Milk’s staff test it for purity and freshness then pour each load into a milk churn for transport back to Zago’s factory in Sululta, an hour and a half’s drive away. This is the drivers’ last pickup, after a busy morning of travelling around Ethiopia’s lowlands, where dairy farming is more commonly a part of agricultural life.

The owner, Melkam Endale, shares how it all began. ’I started dairy farming in 2011 and expanded to milk processing in 2017. When I first started the milk processing business, I produced raw milk and would sell it in Addis.’ With such a short shelf life for raw, unpasteurised milk, Melkam explains that: ’Marketing was a real problem. I started to think about how I could extend the shelf life of the milk. So, I started pasteurising it. This extended the shelf life a little, but not enough.’

Each year as Ethiopia begins a period of fasting, Melkam would see his demand drop dramatically and he would have to reduce the number of farmers he bought from. ’People who are fasting don’t consume milk or other dairy products. Consumption, including that of meat, drops by 50 or 60%.‘ When asked how he got through these periods he explains: ’The maximum fasting period is two or three months. So, we made butter and cheese from the excess milk. Once the fasting ends, there is suddenly a huge demand. I would have to expand the number of smallholder farmers for raw milk.’ This cycle would repeat year after year.

As a by-product often going to waste, whey remained an issue. Melkam saw a potential market for flavoured whey drinks, especially with malnutrition pervasive across all age groups in Ethiopia, the young and the elderly being especially at risk from its negative consequences. Even in Addis Ababa, as many as 11.4 percent of children are malnourished. Whey, although perceived as a possible addition to the diet, until recently was neither widely available nor accessible in Ethiopia. Although a simple by-product of milk processing, whey contains high-quality protein, lactose, minerals, vitamins, and bioactive compounds. These have been shown to have incredible health benefits, such as improving immune function, reducing blood pressure, enhancing muscle growth, and preventing osteoporosis. Whilst UNICEF questioned the ‘awareness and acceptability of whey products, and the cost-effectiveness and sustainability of whey interventions’, it seemed that Melkam had found a market. Still, to fund this planned expansion into the processing, flavouring, and packaging of whey, Melkam would need additional financing.

Melkam applied for a government development loan 18 months ago. It is still pending. He is quick to point out that: ’This is not exceptional to me. Everyone will wait and go through the same process. Never knowing if it will come or not.’ This difficulty in accessing funding sees him absolutely committed to the idea that there is more room for challenge funds in Ethiopia.

He credits IAP for the necessary shifts in his business model. ’It’s inclusive. It’s not only me. It helps smallholder farmers. I’ve expanded my sourcing by double, so now I can reach more smallholder farmers. So, these funds support the farmers as well as end users through the outlets we use to sell to low-income people.’ Discussing the grant he received, he says that it was mostly for marketing. ’We bought marketing equipment for the street vendors so they can sell our product. They have a pushcart, an icebox, and an umbrella with the Zago Milk logo.’ With these new street vendors working alongside small shops and stalls, Melkam adds: ’We used to sell around 5000 litres per day. Now we sell 9000 - 10000 litres a day.’

On the general principle of challenge funds, he is more than positive. ’There are a lot of people who need challenge fund support. There are people who have the skills, but the limitations of resources mean they cannot implement their plan. They can use these grants and run an inclusive business. In my case, it’s all about involving the farmers and the consumers; I’m in the middle, just the actor in the middle. There are people engaged in similar businesses who could really benefit.’

Without people like Melkam, farmers would have very little access, if any, to this market. As he explains: ’In this country, we have an agrarian economy, you know, most people are engaged in agriculture. They need to improve their productivity and product marketing; and they need to sell at a good price. Entrepreneurs are important to activate this process, and interventions in this area will also help farmers improve their productivity and sustainability.’

On farmers, he adds: When it comes to the dairy sector, they produce raw milk, a very perishable product. When sales fluctuate, they sometimes shift to crop farming instead. So, marketing becomes very important so they can sell their product.’ Supply is clearly growing, so is income. ’Now, I have increased my production. I used to employ 300 or 350 smallholder farmers, now I work with over 750.’ Smallholder farmers were not the only ones to benefit from his new supply chain. Melkam also found a new market in urban low-income people.

Melkam is very confident that he is reaching the low-income community. ’We also have kiosks - small shops - in many residential areas, and we have our street vendors. I would say that at least 80% of our products are sold through these small urban outlets. To low-income people.’

Written by Rob Savage.