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The leadership challenges of reinventing a traditional industry

When the German group Müller took over the dairy division of the UK’s Dairy Crest in late 2015, Patrick Müller — then strategy director at the German company — was unsure exactly what a milkman was.

“I’m Swiss . . . we haven’t had milkmen in the last 100 years in Switzerland,” explains Müller, 41, who is no relation to the founding family of the German dairy group.

The Dairy Crest acquisition, which included the UK’s largest milk delivery service, aimed to achieve economies of scale in a shrinking market, as UK milk consumption was falling. Lossmaking Dairy Crest had already announced the closure of a glass bottling plant that served its milk floats, saying it would only deliver milk in non-reusable plastic.

But Müller, a former strategy consultant who joined the dairy group in 2012, was intrigued by the distinctively British service. “I thought, let’s check what it actually is,” he says. He joined a milkman in his 60s, Kevin Bowtell, on his morning rounds in Frimley, Surrey in a decades-old milk float whose battery weighed several tonnes.

Aspects of the service were antiquated. Milkmen would deliver throughout the mornings, returning to collect cash and cheques. But other aspects, Müller thought, tallied with contemporary “megatrends”: the electric vehicles, the reusable bottles, the convenience, the community roots. He pitched to his employer a plan to revive Milk & More, as the former Dairy Crest delivery service was called.


Customers Milk & More gained in a single week during lockdown

“There is this trend that people want to know their supply chain,” Müller says. “People want to have not only cool technology companies, they want the human element.”

Five years later, the changes at Milk & More have been all-encompassing. When Müller took over, it had about 500,000 customers and was losing about 100,000 a year. Milk deliveries had plummeted from more than 90 per cent of the UK market in the 1970s to about 3 per cent. Müller sought to replace the vanishing offline customers with a new digital service, and the company now has a total of 400,000 households on its rounds in southern and eastern England and the Midlands, all of whom use its digital platform.

A United Dairies employee delivering milk and groceries in Maida Vale, London, in 1931 © Miller/Topical Press Agency/Getty

While transferring itself online, the service has also sought to become a “farm shop on wheels”. It now offers oat, almond, soya and other plant-based milks — a vital extension to its core product given the state of the UK dairy milk market, which has been declining for most of the past decade, according to Euromonitor. It also sells organic groceries, artisanal bread, fruit, vegetables and household products from outside suppliers, bought in by a 40-strong team. The transition was overseen by a new executive team, including Andrew Kendall, formerly of Boots, as chief operating officer.

Covid-19 lockdowns were a boon, as households were stuck at home and supermarket supply chains disrupted; at one point, says Müller, the service gained 40,000 customers in a single week. Deliveries helped the German company’s UK and Ireland division return to profit in 2020, and earlier this year Müller quit his role as chief executive of the wider UK business to focus on Milk & More, in which he also acquired a stake.

The journey has required £40m of investment and has in some respects been a ruthless process. Müller abolished the franchising system under which Dairy Crest’s milk floats had operated for decades, with some franchises handed down from father to son. Instead it offered milkmen — and the handful of women in the role — the chance to come on board as employees. This meant offering sick pay and paid holidays, but removing the opportunity to run one’s own business.

“We recruited from scratch again,” says Muller. “We said: ‘Those who want to come are very welcome to apply, but this will not be the same job.’” 

Shifts for the more than 1,000 delivery staff, whose average age is about 55, changed from mornings to overnight, with deliveries made by 7am to cater for working families. Marketing, from being franchisees’ responsibility, shifted entirely online, while local rounds were adjusted algorithmically to fit fluctuating demand. The group invested in almost 600 up-to-date electric vehicles. At the same time Müller says he sought to put in place a more communicative internal culture; the dairy industry, he says, can be “very hierarchical”. 

The transition he led was bumpy. “If you have done something for 30 years and suddenly somebody else comes and says, ‘let’s change it’, you’re not necessarily super positive about that . . . We had to convince 2,000 people that had a very, very super work ethos, but also maybe they were stuck in [the old] model,” Müller says.

Three questions for Patrick Müller

Who is your leadership hero?

David Attenborough. Without having a powerful position, he’s inspiring and igniting global change . . . and action [from] people that are 50 years younger than him. I think that’s a fantastic achievement.

What was the first leadership lesson you learnt?

That leadership is action and not a position. I don’t necessarily like these rock star CEOs that don’t empower people. I don’t believe in this idea that one person is changing the world. I think with Steve Jobs, you had a much higher risk, with him running [Apple], than with Tim Cook now. He actually is pretty humble, he’s pretty collaborative . . . I think probably Apple now is a better company than it was under Steve Jobs.

What would you have done if you had not worked in the dairy industry?

I would probably play piano. I’m not Herbie Hancock material, to really be a jazz musician, but would I love to be one? Yes. They master their instrument, but they play together and create something new by really mastering the rules, but also breaking them.

He had to work especially hard to bring around a group he refers to as “the resistance”. He argued this was a chance to preserve the milk delivery tradition for the next generation. There was also a backlash last year from campaign groups on behalf of elderly and vulnerable people over the move to digital-only, although Müller says the company worked with as many customers as possible to help them switch to the app.

Night work is not for everyone, says Müller, though it has drawn in some men with young families, allowing them time to see their children during the day. “It’s the Marmite thing: you love it or you hate it,” says Müller. “It’s either — in the first couple of weeks you go ‘Oh, no, that’s not for me,’ especially if you get a rainy winter day. Or you go, ‘Wow, I love it. I have my freedom, I’m part of the community and I’m on the road.’”

Recruitment has become a key challenge. With widespread labour shortages, including an acute lack of lorry drivers, milkmen have been tempted elsewhere and agency labour has become unreliable. When we speak, Milk & More has 200 delivery driver vacancies, despite introducing joiner and retention bonuses, and is not able to make all its deliveries (the number of vacancies has since fallen to 173). Staffing issues are dominating Müller’s time — and his inbox. “When something doesn’t turn up, [customers] call me, they write me emails. They really care. It’s the level of emotion that this triggers.”

Meanwhile, competition is building. Start-ups The Modern Milkman, founded in 2018, and DairyDrop, founded two years ago, offer a similar service. Within Milk & More there are ecological challenges, particularly when it comes to packaging; the company is looking at how to reuse milk bottles more than the current typical 25 times without sacrificing their appearance, and has especially struggled to find eco-friendly bacon packaging. It aims to use entirely packaging “fit for the circular economy” within two years.

Müller is confident his company has captured the zeitgeist. Eating and drinking, he says, “are political. Is it produced in China or is it produced here? It’s core to who we are, and people are getting more aware of that again . . . At one point it was only ‘cheaper is better’, but I think that paradigm is shifting. People want to know where it comes from, and how it’s produced, and whether it’s good for the body or not.”

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