Dairy Crest deal offers hope for the British milkman

By Chris Mercer

- Last updated on GMT

Related tags: Milk, Dairy uk

The distant clink of milk bottles at 5am may be a thing of the past
for several British neighbourhoods, but Dairy Crest's bid to create
the UK's largest doorstep delivery business is a sign there may be
life yet in the old British milk float.

The British milkman has become an endangered species in recent years, overtaken by cheaper, plastic cartons now widely available in all supermarkets and convenience stores.

Arla Foods UK this week dumped its doorstep milk business, Express Dairies, lamenting falling profits and a 14 per cent drop in the home delivery market's share of liquid milk sales since 2000.

Rival firm Dairy Crest will, however, pick up the business for £33m; a move set to make it Britain's 'largest milkman' and offering renewed confidence to some industry observers.

One of those is Jim Begg, director general of trade association Dairy UK. "The market has been declining by around 10 per cent per year, but less so more recently. I detect almost a new interest in the whole concept of doorstep deliveries,"​ he told DairyReporter.com​.

There are, according to Begg, three main reasons for this.

Firstly, the supermarkets who largely crippled milkmen and their milk floats in the first place have begun to deliver doorstep groceries, re-educating people about the benefits of such a service.

Tesco, Britain's largest supermarket, saw sales in its home delivery business top £700m in the 2004/05 financial year. The service, which began in 1999, now covers 96 per cent of UK households.

The second reason for the re-birth of milkmen is that they now offer more than just milk, and it's nothing to do with old rumours about milkmen and bored housewives. Milk floats carry a range of products including potatoes, eggs, bin liners and kitchen foil.

Express Dairies recently signed a deal with e-retailing specialist M-Box, which it claimed could transform milkmen into 'e-milkmen', able to deliver an even wider range of consumer goods.

This runs hand in hand with the third main factor, which is the development of new technologies to aid the 21st Century milkman, or indeed milkwoman. "These have resolved many of the old problems of ordering and payment,"​ said Begg, adding that businesses were now more switched on to customer service.

Dairy UK launched the website www.findmeamilkman.net in March, designed to help consumers find their nearest delivery service.

Still, no one is sure how many of Britain's whirring, electric milk floats can really be pulled out of nostalgia (see the website milkfloats.org.uk​). After all, supermarkets could just as easily use their grocery vans to deliver fresh milk to peoples' houses alongside other foods.

And their milk costs less, reflecting retailers' greater efficiency through sheer size and their ability to drive down prices in negotiations with milk processors.

Milkmen do have an environmental edge, mainly because the containers they use can make up to 40 trips, though this is usually closer to nine.

In the end, it still seems unlikely that milk floats and milkmen will rise back to their former glory.

Dairy Crest, however, said this week it was confident of at least stopping the rot. It said it "has the industry-leading business model for doorstep and middle ground, which has delivered good profits and cash in recent years"​.

Dairy UK's Begg agreed there was a "good, solid body of people"​ that held a "real warmth"​ for doorstep milk deliveries, though he declined to predict market performance figures over the next few years.

There are around 9,500 milkmen left in the UK, delivering goods to five million homes, according to Dairy UK figures. This makes up between 11 and 13 per cent of Britain's liquid milk market, which last year saw its first growth for 40 years.

Related topics: Markets, Fresh Milk

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