Inclusive Business Analysis: Optimising the Dairy Supply Chain by Improving Sourcing and Service Delivery Through Professional Farmer Organisations

Overview of MCDCU and its operations

Established in 1967, Meru Central Dairy Cooperative Union (MCDCU) is a farmer-owned processor based in Meru County, Kenya, dedicated to producing quality dairy products and improving its members livelihoods. Its brand - Mount Kenya - is one of the leading brands in Kenya. As of 2024, the union had a daily processing capacity of 750,000 litres and sourced 560,000 litres of milk daily. It mainly sources from farmer organisations (FOs) – 56% from affiliated FOs (shareholders of the union), 29% from non-affiliated FOs and 15% from Self Help Groups.

Growth ambitions and strategic focus

MCDCU intends to double its milk sourcing and processing capacity in the next two years to meet the growing demand for dairy products locally and in the export market. This report outlines strategies to reach this goal, with a strong focus on delivery of blended services - such as extension, feed, and artificial insemination - to farmers. The report also presents FO professionalism scores (by SCOPEinsight), analyses their financial performance, and provides key recommendations to enhance growth and sustainability of the FOs.

Support through AgriGRADE

MCDCU and its supplying FOs will be supported by AgriGRADE, a three year strategic initiative led by a consortium of Agriterra, IDH, the IDH FarmFit Fund, Oikocredit, and SCOPEinsight. AgriGRADE focuses on strengthening and professionalising FOs through tailored business development services, ultimately connecting them to finance and markets.