The 21st-Century Milkman

The 21st-Century Milkman

2/14/2019
The 21st-Century Milkman
Big business is about efficiency and synergy. Streamlined logistics, savvy marketing and active consumer engagement all help to improve outcomes. In most industries, information technology is an integral tool.

In grocery retail, however, digital models of supermarket operation are an outlier in that their offerings are not necessarily faster and cheaper than the traditional model. For food and drinks, the perishable nature of goods also means there is a small window for matching consumers and products. Inevitably, waste occurs.

Four partners spotted this market inefficiency in the Netherlands, and devised a solution that would remove inefficiencies and benefit the environment. Michiel Muller was one of them. 
He remembered his childhood, when a van would distribute milk bottles direct to customers’ doors. Instead of 200 journeys from those streets to one supermarket for milk, one journey was made from the supplier to the end consumers. Simpler times, he thought.

Under the traditional grocery store model, perishable food must travel from original supplier to supermarket vendor. It then sits in storage, waiting to be scooped into a shopper’s basket. From there, it must traverse trolley traffic, dance the checkout cha-cha, and ride the conveyor belt of cost-checks, before another trip to the customer’s home.

Grocery retailers responded with digital delivery services. But without full focus on the online business, that arm is usually loss-making and, counterintuitively, online prices are higher.

Market incumbents faced a conflict. 

“They transition slowly, because if they successfully migrate online, profit drains out of the business. They’re stuck in their own system.”

Meanwhile, Muller and his partners at grocery app Picnic created their own system. By using an app-and-van model, they’ve cut down on wasted food (and time).

“We’re the milkman 2.0: our last-mile model is unique in the world.”

Muller embraces the traditional value of yesteryear’s milkman to service his more than 150,000 users: reliability. Data is key here.

“We calculate journeys to the second, factoring drivetime, order size, customer location — are they easy-access or on the seventh floor? If it’s dark, we add eight seconds. With precision comes predictability.”

This commitment to cutting inefficiency fuels Muller.

“We’ve cut waste plastic and carbon, while our small electrical vans are super-efficient.”

Less than three years on, Picnic is launching in Germany. It has new products every month, such as a tie-up with Heineken, which sees Picnic vans delivering beer at a low price and with minimal packaging. 

Muller and his team are fulfilling their ambition to reduce waste, and to provide normal families in normal towns with a truly affordable luxury.