Alan Bjerga, NMPF: Hello, and welcome to the Dairy Defined Podcast. Dairy Nourishes Africa, it’s both a fact and it’s also an initiative from Global Dairy Platform, an international effort to advance the sector’s role in responsible food production. Food systems are in the world spotlight and Dairy Nourishes Africa, or DNA, couldn’t be more crucial to it. DNA is developing dairy’s potential in East Africa, starting in Tanzania using the expertise of dairy cooperatives in the entire supply chain to build resilient, sustainable, small holder farms and small business. Today, we hear from key people at every level of this effort, Andrei Mikhalevsky, former CEO of CDI and advisor on the DNA Project with global dairy experience is launching the project in Kenya. Thank you for joining us, Andrei.
Andrei Mikhalevsky: Thank you very much, Alan.
Alan Bjerga, NMPF: Jay Waldvogel is a board member of Global Dairy Platform and Senior Vice President of Strategy and International Development for Dairy Farmers of America. Thank you for joining us, Jay.
Jay Waldvogel: Thanks for the invite. Looking forward to the conversation.
Alan Bjerga, NMPF: Jay is joining us from Chippewa Falls, Wisconsin and Andreii is in Atlanta, Georgia. Also joining us is Dai Harvey, DNA’s Regional Technical Director – he’s in the United Kingdom — and Anaty Kokushubira Kombeson, owner of Sebadom, a small dairy processing business in the Southern Highlands region of Tanzania, from where she joins us today.
I’d like to start with you first, Jay. From a food security standpoint, why is dairy so important? And why are we focusing on East Africa?
Jay Waldvogel: When you talk about food security and dairy’s role, you have to start by understanding who we are as an industry, as a sector. The global dairy industry is a one billion person community, starting with more than 130 million farmers around the world, with 600 million people living and working on those farms, farms that create 125 million jobs, jobs that are supporting hundreds of millions of other family members, collectively more than a billion people. The sheer scale alone indicates our role in food security. But even beyond that, if you look at how dairy plays out locally, highest calling nutrition, shorter supply chains, critical in times like COVID, women-led in many cases, nearly 40 million of those dairy farms are led by women who tend to make better choices on how they use the nutrition from those products, for their kids, for example, regular cash flow and environments that are critical. I’d go on about the issues. So it’s a combination of the sheer size and scale of dairy and its role in food security, but also that really, really local touch where dairy is very much around the corner for the people who need it.
Alan Bjerga, NMPF: So why DNA’s focus on East Africa?
Jay Waldvogel: There’s really three things that define East Africa. One is the need. It’s overwhelming in terms of nutrition. The level of stunting, malnutrition wasting is huge, the flow-on effects to economies, the flow-on effects to education, the societal issues there are dramatic. So it’s needed, very much needed. It’s also possible. You can actually do it there because they have the land, the climate, the weather, a dairy herd, terribly inefficient, but a dairy herd, and an understanding and appreciation of what dairy does for the diet. So you have the resources available to pull. And lastly, and most importantly, I think for us is the credibility. It’s a part of the world where you don’t see a lot of international companies playing. You’re really working with local people, local stakeholders, local farmers, local processors, to find solutions for them. So where it’s most needed, where it’s most possible and where you’re most credible in delivering those results, and we land in East Africa.
Alan Bjerga, NMPF: We’re seeing a lot of attention to our global food security and global food systems. You have September’s UN Food Systems Summit, October brings you World Food Day. From your perspective, how does DNA fit into these global conversations? And how does the global dairy sector benefit from DNA’s work?
Jay Waldvogel: Right now, the Food Systems Summit is the most visible one, but there’s all kinds of other things happening around, you mentioned World Food Day and others that are really talking about agriculture, and often in the context of environment or other things than in food, oddly enough. And it’s important for us to be proactive, to be positive, to be aggressive and telling the real story of dairy and not letting others define us or box us in, in ways that are negative for us. Dairy is incredibly positive. I mentioned the scale and the local nature of it, but the impact we have on livelihoods and the impact we have on development is huge. And you can even look in history, go to Latin America, Mexico, go to Asia, Japan, Korea, and even China right now, and you can see the positive impact these dairies had. So getting our story positively told is important.
And the other thing that affects the industry and really catches the Global Dairy Platform is in the US we are worried about some of the issues around demand, some critical parts of the U.S. steering dairy demand are slowing or stagnating, we know that. But around the world, dairy is still very much a growth industry, still growing at 2%. Most of that growth is coming to the developing world. It’s where people who move into the middle-class, who had the first dollar to spend, decide to spend it on nutrition. And their first choice often is dairy. And we need to keep that running, we need to keep those new consumers, whether they’re in Asia or Africa or Latin America to think dairy first. And if the perception of dairy is bad, we lose that conveyor belt of new consumers coming, consumers who are a strong future for us.
Alan Bjerga, NMPF: Andrei, given your knowledge of these markets, could you tell us a little bit more specifically about DNA’s work on the ground in East Africa and a little bit about the role US Dairy is playing within it?
Andrei Mikhalevsky: Well, Global Dairy Platform founded the DNA initiative originally. They are supported by Venture37, which is now part of Land O’Lakes and they’re supported by Bain. So we have world-class expertise on the ground working at in the market. DNA is designed as a public-private partnership. So as we launched into East Africa, we’re doing that with private funding initially, while we are looking for expanding the efforts with public funding. So that’s how we funded the project. It was initiated by GDP, but what does it really look like on the ground? Well, the first market they selected was Tanzania. We did that a little less than a year ago, and we did it with a very different approach. Over $800 million has been spent in East Africa over the years to try to develop at the market and help with hunger and malnutrition, those things. And they’d had $800 million as little to be found. People may have bought cows into the market and, you know, there was no market for the milk, so the cows obviously turned into food products. If you were to go to school lunch programs that didn’t have a supply of milk, that created an issue.
So this is a value chain approach that started in the middle with a cooperative, or with a processor, work back towards the farm, helping them in some very significant areas, whether it’s women and youth empowerment or sustainability, we helped with animal nutrition, crops, seeds, fertilizer, environmental, sustainability, all those initiatives back towards the farm. And then work forward towards the end user and the consumer, with product mix, how we manage businesses, strengthening economic models. And we’re hoping that the dollars that we target into the market are much more effective.
You’ve asked your second question. What role is US Dairy playing in this market? And first many US farmers through their churches or local organizations already support efforts in Africa. So this is a great way to add onto those efforts. Next, the US was really a late entry entering into the Southeast Asia market, and we have an opportunity in this case to lead the efforts into a new market. The US will also be recognized as a global leader. Many times in the dairy industry we haven’t been recognized as global leadership, and this gives us an opportunity. It’s an opportunity for US Dairy to build a business base in one of the fastest growing regions in the world over the next 20, 30 years. It gives us an early start on building relationships in this part of the world, where we may not have the relationships in place yet. And it gives the US dairy industry a real opportunity to make a difference in this part of the world and to do good, starting with the work in Tanzania.
Alan Bjerga, NMPF: We’re focusing a lot on DNA’s work in Tanzania, but give us a little preview of what’s going to be coming in Kenya, and who’s supporting that effort.
Andrei Mikhalevsky: Very fortunately, we were able to secure a lead sponsor for us to expand into Kenya. That was done by CoBank. We are in the process. Now we’ve selected a processor owned by a cooperative with over 9,000 members into Kenya. And as we launch into the market, US Dairy has been very supportive. Our founding members of GDP have been supportive with US companies such as Dairy Farmers of America and Land O’Lakes, but we’ve had additional support from a number of co-ops and many more people such as Prairie Farms, people such as Hilmar Cheese, California Dairies, United Dairymen of Arizona, so we’ve had quite a bit of support as the US looks at the launch into Kenya. So a very exciting program and lots of opportunity to do good in the world.
Alan Bjerga, NMPF: How can someone in the US, or really anywhere someone is listening to this podcast, help support this effort?
Andrei Mikhalevsky: The best way for people to help support the program is two ways. One is through in-kind support or offering your expertise similar to what you may have done in the past, through mission trips or through your local organizations where you’ve supported efforts in Africa. The second way is to provide some funding and smaller, large, we’re using this as interim funding until we get the larger grants.
Alan Bjerga, NMPF: And we will have more thoughts on how to help. But in the meantime, let’s go to the Southern Highlands region of Tanzania, were Anaty can tell us a little more about how she’s getting dairy to those who need it. Anaty, welcome.
Anaty Kombeson: Thank you so much.
Alan, Bjerga, NMPF: Tell us a little bit about what you do and how you became involved in DNA.
Anaty Kombeson: Well, we are a dairy processing company. We started our company four years ago with me and my mum. We produce yogurt, fresh milk at [phonetic 00:10:16], but we also work with small scale farmers, about a hundred of them, where we source our milk from them on a daily basis. We started this company when I had my kid, she’s six years now, when she was about to start consuming dairy products, it was a bit of a challenge to get the quality milk for her. So because of that challenge that we faced, that is where Sebadom came in. We said, okay, maybe we can grow some business from there.
Alan Bjerga, NMPF: What are some of your biggest challenges as a business?
Anaty Kombeson: One of the challenge we had is sourcing the quality of milk, high quality of milk, because the farmers that we work with, they have a bit of a limited knowledge on animal keeping. Number two, we had problem with storage, keeping of the milk, because milk being a product that can perish, it is perishable very quickly, so we had a problem on that. But we are glad that DNA had helped with these challenges. And running capital as well, it is a problem for small companies like us.
Alan Bjerga, NMPF: How does DNA assist with finance?
Anaty Kombeson: When DNA came in, they came in when the pandemic COVID-19 was serious. And by that time, our business was really bad, so we were not sure if we could continue with the business. So when DNA came in, first of all, we had time to sit down and assess the position of the business, where it was with the pandemic and everything. First, we go to understand what our business was like, because we were making a total loss. So they helped us first, before with the finance, they helped us first to set the business, at least like to push it back to where it was, at least it can operate itself. That is number one. And with the quality of milk what they did, they helped us with the training, with our farmers, on animal keeping. As well as in the storage part, they helped us with the customers that we work with, they provided us with fridges, for them to store our milk. So all those initiatives, they helped us to stabilize our business and to [inaudible 00:13:18] that we have, the money that we have. We have managed to operate our business with the money that we have.
Alan Bjerga, NMPF: Since you and your mother began this business, you’ve grown to 50 employees working with more than 100 farmers. What is your longer term goal?
Anaty Kombeson: Our longer term goal is that in five years we are hoping to grow our business eight times to where we are right now. And we also want to increase the number of farmers that we work with at least to four times to where we are. So by five years, we are hoping to have at least 500 farmers in our database and the business should be able to grow about eight times from where we are right now.
Alan Bjerga, NMPF: Turning it over to Dai Harvey, who is working with Anaty as DNA’s Regional Technical Director. Dai, you think Anaty can meet her goal and what will it take to do so?
Dai Harvey: Yeah, no, absolutely. The great thing about Anaty and her mother is their openness to new ideas, an openness to realizing that when you’re growing your market and growing your customer base, it’s more than just finance that is important. It’s a positive attitude and very much looking at a way that you can look to grow your demand for a quality product.
We have a very nice saying, which is very true, which is “Quality of the product can only get worse when it goes into a factory or into a processing plant”. So investing in your farmers and investing in the quality assurance of your product that’s coming of the farm is really important, and that’s exactly what Anaty and their company has done is invest in the farmers to improve the quality of the product, and that’s a really important piece of the DNA initiative.
Alan Bjerga, NMPF: And how does this effort working with Anaty fit into the goals that that DNA would have in Tanzania and beyond?
Dai Harvey: At this stage we’ve been working in Tanzania developing a repeatable models. This is a honing and fine tuning our approaches for different enterprises of different scales, different farmer, allied enterprises. So an enterprise which is willing to invest back into the supply chain on both forward and backwards, so both into the consumer part and also to the supply side, for the farmers side. Working with them, developing these repeatable models across Tanzania with enterprises at different scales in different regions. Currently we’re working with just under 300,000 consumers and about to, by the end of the year, we’ll be just over 2000 farmers that they’re supplying into the supply chain to those consumers. But at the end of the end of the period that we want to, in five years’ time, we wish to be working with about 2.5 million consumers and working with over 20 of these farmer allied enterprises with our higher goal of working with approximately 20,000 commercially orientated farmers and creating about 3000 jobs.
Alan Bjerga, NMPF: Talk about the need in Africa for basic nutrition.
Dai Harvey: Our real focus is to ensure that dairy and animal source foods can help to address one of the single biggest challenges within Tanzania, and then within the region, which is the large amount of childhood malnutrition across the region, which is very shocking when you hear the numbers. Certain countries in the region will range between 35 to 45% of the children under five suffering from malnutrition.
Alan Bjerga, NMPF: In any sort of economic development, poverty alleviation effort, you often will run into issues of scalability, getting it to the point where the numbers are making a meaningful difference in an economy and a society. Do you see DNA as a potential model that can help build an industry across East Africa with the lessons that you’ve learned?
Dai Harvey: Absolutely. No, very, very much so. And I think this is where DNA is different to other models and to other development investments that have been made in the past. Is that it is, firstly it is scalable. And secondly, we started with an end in mind, and looking at how will this continue to grow year on year.
I’ll give you a very nice example. Was working in Tanzania, looking at, as we were mentioned earlier on about the repeatable model, and gaining proof points within Tanzania, we have carried out various surveys and discovered that less than 2% of schools in our survey had dairy products and milk as part of their meal plans. So we then carried out another survey of the parents who were taking, sending their school, their children to these schools, and 68% of them said if offered dairy products, they would much prefer to offer dairy products than they would the current products, and that they will be willing to pay for them.
So then it gives you a really nice idea of the insights that we can gather by the DNA team.
Alan Bjerga, NMPF: Anaty, tell us a little about your efforts in schools.
Anaty Kombeson: Currently, we are working with two schools, but we have added a extra two schools, so it is four schools right now. And we are glad that at first, the parents were a bit resistant, should I say, but now at least we have seen the improvement. In the plan is that by the end of the year, we are hoping to have like ten schools in a database that we should be working with.
Alan Bjerga, NMPF: What so far have you learned that’s been most gratifying or insightful as you’ve been working with this project?
Dai Harvey: It is incredible how even given the massive challenges that we have faced given the global pandemic and given all of these other challenges, how people are very resilient and continue to be open to ideas and continue to be willing to accept and look at different changes.
Dairy Nourishes Africa can have such an impact on farmers’ livelihoods. And then with that, allowing people to send children to school and to be able to invest for the future. And I think as we just heard from the wonderful experiences from Sebadom, a small, a woman owned enterprise seizing the opportunities, and then really looking at that future, wanting to grow eight fold in over the next five years. What an inspiration, I wish there was more of that in the world.
Alan Bjerga, NMPF: Is there anything that anyone would like to add?
Jay Waldvogel: Yeah, I would want to circle back to some of the things that under mentioned earlier about how you can get involved in while you may choose to want to get involved with Dairy Nourishes Africa. And if we look at our members and companies that have joined already, there’s several different reasons they want to participate. Some simply viewed as a good charitable activity. They simply want to contribute to something that’s doing good. Some look at it and say, it’s a great opportunity for us to support critical global goals. I want to support strategic or sustainable development goals, or a global net zero approach, and this is a way that they can do it. Some view it as a way to reinforce it their companies, their brands are purpose driven. They find it a great way to tell the story of their brands to attract the right kind of employees in the future. And some are quite honestly looking for ways to enter the market. They see this as a way to learn more about interesting market that maybe in the future, they want to invest directly in.
So there’s lots of reasons to be here. And how? We like checks, send us some money, we’re happy to put it to a good use. We love direct involvement. We’ve had heads of R&D from big US companies involved directly in projects, heads of Innovation from US companies involved in projects. And lastly, and maybe most importantly because everybody who hears this can do it, share the story, tell people about what dairy can do, tell people what dairy is doing, and help reinforce that dairy is a positive solution to problems facing the world and really can help people where they need it most.
Anaty Kombeson: I just wanted to thank DNA for what they are doing. Truly, if it wasn’t for them probably we would have closed the business right now. And for us closing the business meaning a hundred people, a hundred families shutting down what they are doing. So we are really grateful and just wanted to encourage DNA team to keep on pushing what they are doing We are very grateful.
Alan Bjerga, NMPF: Jay, Andrei, Dai, Anaty, thank you for your time.
Anaty Kombeson: Thank you.
Andrei Mikhalevsky: You are very welcome, thank you so much.
Alan Bjerga, NMPF: And that’s it for today’s podcast. To learn more about Global Dairy Platform and the DNA effort visit globaldairyplatform.com. If you’re interested in contributing to the effort, in a lot of ways, the email to reach out to is firstname.lastname@example.org. And Anaty has an Instagram page, be sure to follow it at instagram.com/sebadomyoghurt. That’s S E B A D O M yogurt spelled with an H, Y O G H U R T. And for more of the Dairy Defined Podcast, this podcast is on Apple Podcasts, Spotify, SoundCloud, and Google Play under the podcast name Dairy Defined. Thank you for joining us.