Innovators often identify a gap and predict its value to society. That is exactly what Philip Gasatura is doing – bringing pasteurised milk closer to the people.
Gasatura, the managing director of New Found Company (NFC), is the brain behind a milk vending machine.
How it works
The Anytime Milk Machine (ATM), which works like an Automated Teller Machine (ATM), allows consumers to purchase milk from a mechanised nozzle. Here, they bring their own canisters and key in the amount of milk they want and pay for it. The bonus about this innovation is that they don’t have to pay for packaging, making it a cheaper option for consumers. With this innovation, customers have the chance of working within their budgets.
The system also eliminates the middle men – major diary firms – and pumps milk directly from farms to coolers for pasteurisation, from which point it goes straight to the vending machine.
Gasatura, a jolly fellow, sits me down and takes me through his whole innovation. With a background in investment banking and technology, Gasatura quit his job in the United Kingdom (UK) to come back to Uganda to set up something.
Together with some of his friends back in the UK, they came up with a company to finalise some arrangements to give back to the community, in Uganda hence NFC.
“NFC is owned by several British and Ugandan diaspora investors in the UK,” he says, adding “the original investment idea was to develop a dairy farm with a processing plant to sell packed milk to the market.
Demand for milk
After careful research, they realised they would only be adding to the existing under capacity of processing plants. Demand for milk is still growing as shown by the statistics they gathered. But their market research showed that consumers want quality and affordability.
So they set out to find how they can deliver on the consumer expectations. After research on how to provide affordable quality milk, he visited Milan to see the milk dispensers that were being used in communities, removing the need for packaging.
“We later found out that the Italian company had set up similar machines in Kigali and Nairobi, which gave us confidence that the Ugandan consumer would appreciate the concept,” he explains.
This led to the incorporation of NFC (Uganda) in 2011 although operations began in 2014. NFC has a parent company registered in the UK, with the holding company, majorly in charge of operations registered in Uganda.
With an initial capital of $50,000 (about Shs177m) raised from shareholders they set up their first shop in Wandegeya hoping to tap the large student numbers who want ready milk at an affordable rate.
“As poverty levels drop, the Ugandan consumer has a bit more disposable income and the first item they spend on is food. When spending on food, the consumer is quality conscious but price sensitive at the same time,” Gasatura says.
And as such, they picked their market core customer targeting mainly students who are budget consumers, looking for affordable and quality products.
Disposable plastic canisters are used for drawing the milk for those who cannot bring their own bottles.
Gasatura explains that their method of work is more cost effective since they buy the milk directly from the distributors and dairy firms. From the farmers, the milk goes to coolers for pasteurisation and then to the vending machines, which have a capacity of 3,000 litres of dairy daily.
In the year, they have been in operation, the company has been able to set up one site and the average monthly turnover is about Shs15m.
They are also proud of the small milestones they have achieved. For one, Gasatura says, they have been able to provide consumers with a quality and affordable product that has been appreciated by a cross-section of consumers.
But like any business, they have encountered challenges which are majorly operational that include supply chain management, particularly transport and logistics. They aim to have ATM minimum downtime between refills but the traffic slows them down delaying their ability to have the milk ATMs refilled on time.
Power reliability used to be a major challenge since the machines need electricity to keep the milk cool. However, they have been able to purchase cooling machines which can work even after a power blackout.
NFC has also learnt to focus on customer development as opposed to product development. “Have great relationships with your suppliers and customers. Hire character before skill to build great teams,” Gasatura aises.
After more than a year in operation, the company intends to install more milk ATMs under the “Moo” brand in easy access places in Kampala and further move out to other towns across Uganda.
They currently have a plan to roll out 15 milk ATMs over the next 12 months.
A word for budding entrepreneurs
Gasatura aises other upcoming entrepreneurs to have focus.
For Gasatura, being an entrepreneur means signing up to an exciting journey with a lot of disappointments and mishaps but one should learn to quickly get up and move on.
SOURCE: DAILY MONITOR