From Auckland to Mbarara: The making of Ugandan yoghurt

It all began one day in March 2018, when Martyn Atack received a call from Uganda. Bijoy Varghese from Pearl Dairy, a Uganda based milk processor he had never heard of, was on the other end of the line. Would Atack be available to support their diversification into yoghurt and other milk products, the caller wanted to know.

Pearl Dairy’s brief to Atack was simple but also challenging. The client wanted him to develop a premium quality yoghurt that would retail on the East African market at a price that would make the product accessible to the average consumer.

That required Atack to travel and have a first-hand feel of the market and marked the beginning of a year and half-long journey that would see Atack walk across the equator on his feet for the first time, and touch papyrus, a plant whose products he had seen but never ever dreamt of encountering in its natural setting.

Atack was keenly aware of his limitations. His experience was mostly with the Asia Pacific region, and this was his first consultancy project in the hot climes of Africa. Not only was he expected to develop a product but also advise on the technology selection.

“The primary job of our company is to turn our client’s ideas into successful products. So, my task here was to develop a product that would be loved by consumers and the process that would deliver precisely that,” Atack recalls.

His first visit to East Africa in August 2018, made certain things plain to him. The logistics of Pearl Dairy’s route to market would be a primary consideration in product development. The production line in Mbarara is far away from the main markets. East Africa is also not known for extensive electrification and refrigeration. With large segments of consumers not connected to the electric grid, the product would have to be vended in less than ideal conditions while retaining its essential qualities.

In line with Pearl Dairies earlier strategy of producing only long-life milk, Atack concluded that whatever formulation he came up with would need a long shelf life. While that would be easy to achieve, the challenge was how to get the ingredients that would yield yoghurt that could stay mild in a hot environment.

Benchmarking

“I sampled the best yoghurt on the market to get a sense of the cultures and flavours suited to the East African palate. I then had to get the right suppliers of the ingredients that could deliver the right product profile in terms of texture, flavour, creaminess and thickness at a cost that did not breech the target price line,” he says.

Pearl Dairies was approaching the yoghurt project from the same philosophy of quality, affordability and availability that has driven its milk business. Demand for any consumer product has a direct correlation with price and disposable income. Pearl Dairies was targeting its new product at “anybody who would want to eat yoghurt.”

Atack was impressed by the effort his client was putting into getting the product right. According to him, it is very rare in his business to find a client putting up the level of investment Pearl Dairy was injecting into the yoghurt project.

He was particularly grateful that the client was willing to fly him, “from one end of the world to come and understand the local market.”

“Before you do anything for us, you need to understand the local market,” Bijoy Varghese had told Atack.

That was because the milk processor was keen to see he understood the constraints of the market and how the product was going to reach consumers beforehand.

According to Rohit Rajasekharan, the Executive Assistant to Pearl Dairy chief executive Amit Sagar, they knew they were up against the best in the market and were willing to pay whatever it took to launch a successful product.

“We knew that if we were going to get the right product, we would not only have to select the best technology but also hire the best in class advisory. That is why we got Cogito and Atack to come over here,” he says.

From the cases studies, Atack concluded that you could not allow the yoghurt to have a strong flavour which would only get more pronounced and harsher over time, when exposed to high ambient temperatures. He then did some preliminary work in a local laboratory to try out different combinations of texture, flavour, thickness and creaminess.

The benchmarking was necessary not just because of the product profile. The firm treats each market it operates in differently taking into account purchasing power and volumetric preferences. For instance, while you have a 15gram sachet of powdered milk on the Ugandan market, the same product is packed as 20 grams for Malawi and 50 grams for the Kenyan market.

Back in New Zealand, Atack set up a mini-production line in his house to perfect his formula and align the production process. As he did this, he had to figure out a strategy to calibrate the production line that was being set up in Mbarara to produce the same results as what was coming out of the miniature line in his Auckland home.

“The line in Mbarara was custom made for Pearl Dairy in line with the type of products it was going to produce and the related packaging systems such as pouches and cups. I had to ensure that the main line would reproduce the things my experimental line was giving us within the agreed production cost targets,” Atack says.

It took him 10 months of development from the time of his field visit to align all parameters. Once everything was set, weeks of intense work in Mbarara followed to roll off the first products for consumer tasting in Mbarara and Kampala. After feedback from the market, further adjustments were made to lock-in the final formulation.

“We run four trials before the preferences of consumers were reconciled with what we were putting out. By the time we got to level one, we had a good idea of where things would be,” he says.

Although Ugandan milk processors have since run into obstacles accessing the regional market, Bijoy Varghese, the general manager at Pearl Dairies, says the diversification into yoghurt and the other products underpinned a strategy to increase milk consumption in Uganda and East Africa in general. Only 20 to 22 percent of the milk produced in Uganda is consumed as processed products. Besides constraints of price, Pearl Dairy believes the lack of variation in products is also a limiting factor to the volumes the industry is able to take from farmers.

Bijoy says under ideal conditions with open market access across the EAC, the introduction of the yoghurt product alone, would increase their demand for raw milk by an additional 2 million litres monthly.