Jackson Opati’s grocery shop in Kibera slum in Nairobi has become the go-to spot for residents looking for cheap fresh farm produce.

The shopkeeper who sells various basic consumer goods including maize, beans, and milk says one of the products that is earning him big is the ATM milk which has a high demand in the area mostly dominated by low-income earners.

He sells the milk depending on the amount of money his customers have. Using a small panel on the front of the machine, he keys in the amount of money that a customer wants to spend and seconds later the corresponding quantity of milk pours into the customer’s container.

“Since I got the vending machine, the number of customers has sharply increased,” he told BBC.

From Monday to Thursday, the businessman sells 150 litres of milk a day. On Fridays and weekends that jumps to 300 litres, giving him Ksh6,000 in profit a week. “For me, it’s a good business,” he says.

Customers who frequent his shop also admitted that the fresh milk is much cheaper than the packed long life milk.

The pasteurised ATM milk goes for Ksh 65 a litre, while packed ultra-heated (UHT) long life-milk normally costs around Ksh110.

The ATM milk vending business is one of the booming businesses in Kenya, especially in the informal settlements where the demand for cheap farm produce is high.

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Starting the business does not require much, all you need is a good location, a shop, and milk vending licenses. Another requirement is a good and reliable source of fresh milk for your business to succeed.

Initial Costs and Considerations

The startup costs for a Milk ATM business can vary depending on the location, the machine’s capacity, and the quality of the products being sold. Here’s a breakdown of typical costs:

• Machine Costs: A Milk ATM typically costs between Ksh 80,000 and Ksh 150,000
• Licenses and Permits: To operate a milk ATM, you’ll need to secure the necessary permits. Licensing costs in Kenya are approximately Ksh 10,000, depending on the county regulations.
• Location: Securing a strategic location is crucial. Rent for a small retail space can range from Ksh 5,000 to Ksh 30,000 per month, depending on the area.
• Inventory Costs: Initial stock for milk or cooking oil will vary. For milk, a 50-liter initial stock might cost around Ksh 5,000.
• Marketing and Branding: To attract customers, investing in branding and marketing is essential. A basic marketing campaign using social media platforms could cost around Ksh 2,000 to Ksh 10,000.