thinking of starting a glass milk delivery service

Henwin

Hi guys, my husband is a dairy farmer which produced 260,000 litres last year.he is getting 30 cent a litre at the moment which barely covers the cost of production, it has often gone as low as 24 cent and then we had to get loans from the bank to pay our bills. in 2015 we got a loan for 20,000 and in 2016 we got a loan for 25000, these were 5 year loans so we are still paying them off.
As the price is so volitile and we have no control over it, I am thinking of using a small amount of this milk to set up a small business whereby i will pasturise the milk, bottle it and deliver to houses in the area before sunrise each morning.
So i would need to build a special room next to the dairy with a pasturiser, bottle steriliser, a sink and fridge. I would also need to buy a refrigerated van.
My plan would be to have a website and an app where customers can order the amount they need and i will deliver them then. I am thinking of charging 1 euro a litre (its roughly 75cent in shops). i dont think i cud charge much more to get repeat custom. they wud leave the empty bottles on d doorstep for me to collect. i think glass is the way to go as people are more environmentally aware now and there is too much plastic around.
Do ye think this is a viable business idea.Its hard seeing my husband work 7 days a week from 6am to 8pm and have nothing out of it only stress about paying bills and i feel this would be a good money earner. i would love to hear your thoughts on this

wexie

I can really only tell you what I would think as a consumer. And, I suppose, tell you about the 3 separate milkmen who tried getting a regular 'round' setup in this area over the past few years....and all failed eventually.

And I'd love for it to be a positive message but I'm going to go on the assumption you're looking for honest feedback (sorry)

Why would people pay 25 cent per liter more (that would be roughly 30% more than in the shops if you're working off an average shop price of 75c/liter) for your particular milk over what they get in the shops?

Considering the product they buy in the shops comes from a plant with professional quality control etc. etc.?

And keep in mind, while it's convenient to have fresh milk outside of your door every morning (that's if you remember to bring it in of course) you're not actually saving anyone a trip to the shops. They're going to be in the shops anyway. The shops that are selling milk for 30% less than you do?

I would imagine it would end up being a significant investment to start with and while I'd love to be able to tell you it would work out well I don't think it would do much for getting you out of debt in the long run

You may well get some people going for the environmental aspect of the glass bottles, but would that be enough to make the investment worthwhile? AND turn a profit?

Brian?

There’s a crowd in Dunlavin already doing glass bottle deliveries to businesses. You should look them up.

Henwin

wexie wrote: »

I can really only tell you what I would think as a consumer. And, I suppose, tell you about the 3 separate milkmen who tried getting a regular 'round' setup in this area over the past few years....and all failed eventually.

And I'd love for it to be a positive message but I'm going to go on the assumption you're looking for honest feedback (sorry)

Why would people pay 25 cent per liter more (that would be roughly 30% more than in the shops if you're working off an average shop price of 75c/liter) for your particular milk over what they get in the shops?

Considering the product they buy in the shops comes from a plant with professional quality control etc. etc.?

And keep in mind, while it's convenient to have fresh milk outside of your door every morning (that's if you remember to bring it in of course) you're not actually saving anyone a trip to the shops. They're going to be in the shops anyway. The shops that are selling milk for 30% less than you do?

I would imagine it would end up being a significant investment to start with and while I'd love to be able to tell you it would work out well I don't think it would do much for getting you out of debt in the long run

You may well get some people going for the environmental aspect of the glass bottles, but would that be enough to make the investment worthwhile? AND turn a profit?

Thanks for the feedback, our milk would be pasturised but not homoginised, thats where they mix the whole lot of the milk and it tastes watery. if you ever taste non homoginised milk you would be shocked at the difference in taste, its much nicer.
regarding the price, i could well reduce that down to 75 cent if it meant getting customers, afterall its double what we are getting at the minute. i know there are going to be high diesel costs and running costs but i am hoping it would still be a viable business in the long run,.
i would also look into start up grants that might cut down the initial costs

setanta1000

Have a look at mymilkman.ie which is a delivery service run by Avonmore - we use it and find it very handy; prices are about 20% higher when you include delivery charge - we love the convenience, and are happy to pay the extra costs for doorstep delivery but would not pay extra for glass bottles.

I think the margins on milk delivery will be very small so maybe you should look at using excess milk to produce a higher margin product - could you look at making cheese or yogurt (or something similar) on site or team up with someone in the locality? I know nothing about milk production or food manufacture so I could be talking complete rubbish but you never know!

wexie

setanta1000 wrote: »

- could you look at making cheese or yogurt (or something similar) on site or team up with someone in the locality?

That might be an idea, the area I grew up in (in Holland) quite a few local farmers would have been making specialty cheese. Garlic cheese, nettle cheese, cumin cheese, lots of different ones.

Although in my opinion the Dutch seem somewhat more adventurous with their cheese than the Irish

Mind I don't know how much more /or less of an investment that would be

Henwin

setanta1000 wrote: »

Have a look at mymilkman.ie which is a delivery service run by Avonmore - we use it and find it very handy; prices are about 20% higher when you include delivery charge - we love the convenience, and are happy to pay the extra costs for doorstep delivery but would not pay extra for glass bottles.

I think the margins on milk delivery will be very small so maybe you should look at using excess milk to produce a higher margin product - could you look at making cheese or yogurt (or something similar) on site or team up with someone in the locality? I know nothing about milk production or food manufacture so I could be talking complete rubbish but you never know!

thanks for your reply, wud you mind me asking how much a litre you pay? i am thinking of charging 80 cent to a litre a bottle. i would not be charging extra for delivery or because im using glass bottles

CeilingFly

One of the food programmes (bbc) had an almost identical situation. 250,000 litres of milk and no profit.

Son did a business course and cheesemaking course and fairly quickly he was using all the milk for cheese

Henwin

ya, my husband also reckons making yoghurt, cheese and butter wud be better options but i disagree as there is a lot more work and cost involved in making these. like i have all the milk i need, all i need to do is pasturise it and bottle it. i need to sit down and do the figures, i am a mother and i work part time so this wud be a side earner and wud also need to take as little time as possible. i plan to do the milk round between 3 and 6am before my husband leaves for his days work. i would hope to sell 100 bottles a day. is this realistic, am i mad to even attempt it. i might have to do some focus groups and get a general idea of peoples views and buying power before investing any money.

jasper100

Henwin wrote: »

Hi guys, my husband is a dairy farmer which produced 260,000 litres last year.he is getting 30 cent a litre at the moment which barely covers the cost of production, it has often gone as low as 24 cent and then we had to get loans from the bank to pay our bills. in 2015 we got a loan for 20,000 and in 2016 we got a loan for 25000, these were 5 year loans so we are still paying them off.
As the price is so volitile and we have no control over it, I am thinking of using a small amount of this milk to set up a small business whereby i will pasturise the milk, bottle it and deliver to houses in the area before sunrise each morning.
So i would need to build a special room next to the dairy with a pasturiser, bottle steriliser, a sink and fridge. I would also need to buy a refrigerated van.
My plan would be to have a website and an app where customers can order the amount they need and i will deliver them then. I am thinking of charging 1 euro a litre (its roughly 75cent in shops). i dont think i cud charge much more to get repeat custom. they wud leave the empty bottles on d doorstep for me to collect. i think glass is the way to go as people are more environmentally aware now and there is too much plastic around.
Do ye think this is a viable business idea.Its hard seeing my husband work 7 days a week from 6am to 8pm and have nothing out of it only stress about paying bills and i feel this would be a good money earner. i would love to hear your thoughts on this

My tuppence worth is that you should focus on local "artisan" shops, cafes and restaurants rather than Joe public.

A Law

I'd definately buy from you if you set it up. We go through about 20 litres a week and would love to be able to reduce all the cartons going in the green bin.

decky1

Brian? wrote: »

There’s a crowd in Dunlavin already doing glass bottle deliveries to businesses. You should look them up.

have a friend who lives up there , say's he's doing very well.just talking about it last week.:cool::cool::cool:

duploelabs

Try a producer of those supplementary dairy products (Cheese, butter, yoghurt) and see if they'd be interested in buying your dairy off you at a wholesale price, well at least better than what they dairy are paying so you can make a profit. Failing that, if you're reluctant to invest in the production facilities yourself, there a many independent non-brand producers who may be in a position to produce them for you under your own branding

doolox

My first job on leaving school was a milkman. My father was a milkman in Manchester with Express Dairies and in Galway with The Galway Milk Company for 40 yrs.

Things are not the same now.

Milk can be dropped off in supermarkets at very low prices. It lasts about 7 days so that daily delivery is no longer needed. Many people opt for low fat milk so that the full flavour of traditional milk is no longer in much demand.

The large scale producers will always win out as they can afford the quality and test resources needed to maintain the 7 day life of modern milk supplies. Homogenisation and almost sterilisation of modern milk is the price a consumer pays for 7 day shelf life. Some even opt for full sterilisation, yielding UHT or ultra heat treated milk which can last a very long time.

I fear that any customer survey you do will yield false results in that people will aspire to take on traditional full-fat but low lifespan milk but will give it up quickly.

Many people aspire to eat brown, wholemeal bread but sales of white are still high enough to give lie to the aspiration and enforce the reality. Most people eat white bread.

Likewise most people will pick up milk in the supermarkets because it is convenient to do so.

More people have cars. Weight is no longer an issue.

More women are working than in the 70's when home delivery was common and could be managed.

Family sizes are smaller.

People are no longer at home on Saturdays when most bill collections were done on traditional milk rounds.

Many modern housing developments are gated communities which makes access for cash collectors more difficult that in former times.

All these factors militate against traditional milk deliveries as being a viable option, but I could be wrong.

A combined milk, eggs butter and cream service to caterers and restaurants etc might work.

Bigus

Good on you for trying to get properly paid for good produce .

You're location and proposed delivery area would have a large bearing on the price, I don't agree with others that the price is number one , especially if the product is different ,better and in superior packaging so I don't see a €1 a litre as a show stopper.

Wealthy families, with loads of young children that drink milk on its own would be the best target. How you find these , or if they even exist anymore is the question.

Would gyms have an interest is selling fresh milk , drank out of a bottle ,I'd say they might.

If you can get this product on sale in a small scale , say by certifying your domestic kitchen first and maybe a plug in refrigerated container that'll fit in one of your current vehicles would be the way to go before investing large amounts of money, and is the ultimate market research before the big investment.

After all this, I'd agree with others that a slightly harder to produce milk derived product(cheese/yogurt/dressing/custard) might be a lot easier to sell , in the long run.

Stephen Strange

Do the maths properly on this would be my advice. If you add in your costs (loan to by a pasteuriser, broken bottles, extra energy usage, diesel, etc) you will probably be looking at less than the 30c per litre that you currently get from the dairy, with the added time and stress of running an additional business.

As said above, you would be much better of looking at other products to use the milk for like Cheese, Yoghurt, Butter, Ice Cream(or a combination of those). Although these will also have start up costs, you end up with a higher value product at the end.

enricoh

I think it's a non runner unfortunately, running round the countryside delivering a litre or two here and there. Possibly delivering 20l to a cafe n 80l to a hotel. But they already have a milkman delivering, along with cream, butter etc.

Is there any old building you could do up as an air bnb . A friend renting last week in rural Donegal e800 for a week, miles from beach etc. I was surprised it was that high.
A shed u can rent out as a workshop? Storage?

Henwin

thanks a million for all the replies, its given me much food for thought, i rang the kerry enterprise board today and they were helpful, i will do a start your own business course when one is available as the current ones are booked out. the sums will need to add up and they help with a business plan.
I honestly dont think a euro a litre delivered to your door is expensive, sur a pint in the local is about 5 euro. supermarkets have ruined so many small farmers with their below cost selling of fruit and veg as well as milk.
To introduce everyone to the product i would drop a free bottle of milk to each house in my parish with details about it as well as a website/app where they cud order from.I really believe in this idea and i would love it to work but have a fear of it failing.
This time next year Rodney.....:D

salmocab

Would the dairy you sell to currently be annoyed at you effectively going into competition with them albeit on a tiny scale? Might not sit well with them regardless of your size and product niche.

iamtony

I'd love to get fresh bottled milk delivered to my door like the good ol days.
I'm in Dublin, I'd say you would have to target a large town or city to make it work.
I see you said you'd aim for 100 bottles a day at 1.00 a bottle or even as low as 75c a bottle. That's less than 100 a day turnover.
If you take into account the cost of just getting a refrigerated van and running it I don't see it being very profitable. I'd say you'd need to deliver quite a bit more.

Henwin

salmocab wrote: »

Would the dairy you sell to currently be annoyed at you effectively going into competition with them albeit on a tiny scale? Might not sit well with them regardless of your size and product niche.

its kerry co-op we supply and they mainly turn the milk into milk powder for the chinese market as well as some butter so i dont think they wud be too bothered by it. they go through about 1.1 billion litres annually

Del2005

Henwin wrote: »

I honestly dont think a euro a litre delivered to your door is expensive, sur a pint in the local is about 5 euro. supermarkets have ruined so many small farmers with their below cost selling of fruit and veg as well as milk.
To introduce everyone to the product i would drop a free bottle of milk to each house in my parish with details about it as well as a website/app where they cud order from.I really believe in this idea and i would love it to work but have a fear of it failing.

That's a 20% price increase and since people will have to go the shop to buy other products it's not worth the savings.

You said you don't like seeing husband working all day for feck all from the dairy. Getting up to go to work at 3am everyday and doing your part time job after is going to be harder and for very little return for the first few years. When will you maintain the van? Because once that goes down you can't deliver and your customers who are paying a premium for the product won't be happy.

Conservatory

We have a milkman here. It annoys me paying him more than the shop but I’d feel bad now if he lost his job because I stopped getting milk. I certainly wouldn’t sign up to a new fella just because he had glass bottles. I’m not a hipster.

SterlingArcher

Great price on the milk.

Love the cheese idea.

Create your own brand.

Marketing it as farm fresh wholesome country cheese.

Get a stall organised, hit the markets. This will give you some solid numbers to work with.

Grassey

There is a milkman does delivery out by me. Generally a 3am drop off.

His subscribers have dropped consistently since he started. Sun's up from about 4 at the minute so by time people take in the milk it's been sitting in the sun for 4 hours or so. Same price as the supermarket so no savings to be had.

Cold milk from a glass bottle with a layer of cream on top can't be beat, though don't think I'd subscribe to a regular door drop delivery, whereas a local farmer calls around every Monday with eggs to sell and I'd always buy some, maybe something like that would get a better uptake at the expense of eating into more of your time though.

Henwin

iamtony wrote: »

I'd love to get fresh bottled milk delivered to my door like the good ol days.
I'm in Dublin, I'd say you would have to target a large town or city to make it work.
I see you said you'd aim for 100 bottles a day at 1.00 a bottle or even as low as 75c a bottle. That's less than 100 a day turnover.
If you take into account the cost of just getting a refrigerated van and running it I don't see it being very profitable. I'd say you'd need to deliver quite a bit more.

ya i was thinking that, i was trying to be cautious in the number i cud deliver before 7am, i presume everyone wud want it delivered before 7, so to deliver 100 bottles i think it would take 3 hours. i wouldnt like to be working all night if i had to double it. i doubt peoplw wud opt for day time deliveries although now that you mention it would say 6-9 in the evening an option

wexie

Grassey wrote: »

whereas a local farmer calls around every Monday with eggs to sell and I'd always buy some, maybe something like that would get a better uptake at the expense of eating into more of your time though.

I'd say you'd need a fair few hens to make that worthwhile no?

Mind you, we have our own hens and the difference between the eggs from happy healthy hens and the ones you buy in the shops is something people are willing to pay for.

wexie

Henwin wrote: »

ya i was thinking that, i was trying to be cautious in the number i cud deliver before 7am, i presume everyone wud want it delivered before 7, so to deliver 100 bottles i think it would take 3 hours. i wouldnt like to be working all night if i had to double it. i doubt peoplw wud opt for day time deliveries although now that you mention it would say 6-9 in the evening an option

I don't know how feasible it would be to start this small scale without major investment but if you could you could try dropping in a few bottles to B&B's nearby?

salmocab

Henwin wrote: »

its kerry co-op we supply and they mainly turn the milk into milk powder for the chinese market as well as some butter so i dont think they wud be too bothered by it. they go through about 1.1 billion litres annually

probably not so but you never know with large companys. To be honest like a lot of people I love the idea of getting fresh milk every morning but with the way people live these days its probably not practical to get milk dropped off every morning. My wifes job in suburbs of Dublin used to get several litres delivered every day but the guy became a nuisance dropping off the evening before occasionally so the milk was sitting out for 12 hours and sometimes not delivering at all because man utd were playing and he was going over. They eventually dropped him as the handiness of having it delivered wasnt enough to have to put up with missed deliveries because a one man operation cant cope 52 weeks of the year.

uck51js9zml2yt

Would you not look at those self service machines that dispense fresh milk.

Mam of 4

Henwin wrote: »

ya i was thinking that, i was trying to be cautious in the number i cud deliver before 7am, i presume everyone wud want it delivered before 7, so to deliver 100 bottles i think it would take 3 hours. i wouldnt like to be working all night if i had to double it. i doubt peoplw wud opt for day time deliveries although now that you mention it would say 6-9 in the evening an option

Our milkman delivers at night , usually between 10.30 -12.00. Don't know if that would be an option for you ?

Fresh milk in a glass bottle , evokes lots of happy memories !
Best of luck to you