Emergence of Milk Dispensing Machines as a Retail Innovation in Kenya: Trends and Consumer Patterns

Abstract

African food systems are transforming due to rapid urbaniza- tion, growing food demand, and shifting dietary patterns reflected in increased consumption of processed foods. In the informal–formal African market system, shifting consumption trends are linked to various food marketing innovations. This study investigated the emergence of processed milk dispensing machines (“milk ATMs”) in Kenya as a marketing innovation and their effect on consumption trends. Data was collected through surveying 162 ATM operators and 352 consumers and interviewing key informants. Findings indicate exponential growth of milk ATM enterprises, most (79%) of which are small, sole proprietorships. ATM milk is mostly purchased by low- and middle-income consumers, driven by affordability and conveni- ence. ATM milk is 46% cheaper than packaged milk, but 15% more expensive than raw milk. However, perceived safety con- cerns deter some consumers from buying ATM milk. The study recommends scaling this inclusive business innovation but ensuring it delivers quality milk.