Simon Mellin: Showing lots of bottle

Simon Mellin is looking to deliver so much more than a pint of milk to your doorstep. His aim is to build a tech unicorn from his base in east Lancashire.

And the chief executive of Modern Milkman looks to be heading in the right direction with an old-fashioned business model brought right up to date with cutting-edge technology.

Industry watchers are predicting great things for the rapidly growing business. Mention the ‘U’ word and Simon, who was born and bred in Pendle, says: “We’re level-headed and we’ve got a lot of work to do to get there.

“But it would be amazing if we could become a tech unicorn from Lancashire and show that you don’t have to be in Manchester or London, but you can achieve things in areas like this. That, if anything, is the aim.”

As the name suggests, the Colne-based company has taken the traditional milkman’s concept of delivery – putting the pinta on the doorstep and taking away the empty glass bottles for reuse - and brought it into the 21st century.

Sustainability is at the heart of the operation, resetting the throwaway society. All Modern Milkman’s products, which also include a growing range of groceries, are delivered using single-use plastic free, returnable bottles or containers, or recyclable home compostable packaging.

The business works with independent suppliers and farmers to deliver products, including eggs, yogurt and bakery items as well as fruit and vegetables.

It uses intelligent data and analytics to map out milk rounds, assess demand and reduce carbon emissions. Customers sign up to the service using its free app.

Modern Milkman, which began life in 2018, also works closely with a ‘decision intelligence firm’ to combine information, such as shelf-life dates, customer ordering patterns and warehouse data to ensure customers receive deliveries on time with minimum waste in the supply chain.

Having already saved 57 million plastic bottles from landfill, the business announced last October that it had added 200,000 new households to its ever-growing UK milk round.

It is an approach that has caught the eye, singling out the business as a potential unicorn - a privately held company with a value of more than US$1bn. It also led to it scooping the overall judges award and fastest growing company of the year category in last year’s prestigious GP Bullhound Northern Tech Awards.

The business has also attracted strong institutional investment to help it on its journey. The latest funding round saw it raise a total of £50m to support its ongoing scaling and sustainability efforts and its global expansion plans.

Simon, who still lives in Pendle, says: “We started with angel investors and we built it from there. Investors, customers and suppliers, everyone buys in to what we are trying to achieve. It is quite easy to get your head around the issue of plastic waste and it is a really straightforward proposition.”

He recounts the story of the managing director of one of its funders who had tried with his daughter to live plastic free for a month and had given up after just three days. “He realised just how difficult it is to consume anything that is not wrapped in plastic. He got it straight away.”

Modern Milkman started life as one single round in Pendle. The idea was sparked by Simon and three friends watching Sir David Attenborough’s acclaimed Blue Planet BBC documentaries which highlighted the urgent need to reduce plastic waste.

He says: “We started to think about solutions to the problem that had worked before, anything that had been done before that could help. The traditional milk round was all about putting food from the local farm on the doorstep in recycled bottles.

“Most problems have been fixed before, you just have to look back in time at what we used to do. The milkman was part of the local culture when I was growing up.”

While home milk delivery was the norm for many households, particular in the 50s, 60s and 70s, the introduction of fridges into people’s homes and the rise of the supermarket and bulk-buying saw a steep decline in the demand for the daily pinta.

To get an insight into the way surviving milk rounds operated, the fledgling business bought one. Operating in the Colne area it had 100 customers and an old truck.

It soon became clear what the problems were, including managing orders. However, Simon adds: “The big problem was trying to get paid. We were buying milk up front and delivering it to doorsteps. Three weeks in we needed to get money in.

“We went knocking on doors and out of the 100, 90 didn’t answer because they weren’t at home. Others couldn’t pay because they didn’t have cash on them. Today’s lifestyles are really different, with everything moving into direct debit and digital payments.”

However, Simon also discovered customers loved the service they were receiving. He says: “The nostalgia around it is really powerful.”

That positivity inspired the building of the Modern Milkman tech platform, a central database with a front-end web app for the customer, making ordering and payment easier, and a driver app to work out routes and stock requirements. It was the game changer.

Having a decentralised supply chain has also allowed the business to expand.

The business has a portfolio of regional hubs working with a network of independent suppliers. The company’s 2022 revenue will be £50m. The business and its network partners employ around 800 people in total.

Simon, 36, comes from a strong Lancashire farming stock, his dad was a butcher with a shop in Nelson which opened in the 1970s, his grandfather was a farmer.

He says: “I spent a lot of time in the shop as a child and on and around farms. That gave me a broad understanding of food and food production from quite a young age.”

He left Walton High School in Nelson at 16 but didn’t enter the family business. Instead, he trained as a mechanic before entering the world of motorsport as an engineer, spending several years travelling the world working for the likes of Ferrari, Porsche and Aston Martin.

After that spell globe-trotting he returned to Lancashire and started building businesses with his brother Nick. That was when he first began developing the thought process around sustainability and food production which would eventually lead to the Modern Milkman concept.

He says: “Before supermarkets people went shopping two or three times a week and had good relationships with suppliers. That changed when it all moved into supermarkets and shops couldn’t compete.

“The supply chain completely changed from small independents working really well with local producers to the big box supermarkets. The relationship between food and the consumer was completely lost.

“Part of the inspiration behind Modern Milkman was my thinking about trying to reintroduce people with food.”

R&D is an important part of the business as it looks to create innovative ways to deliver more fresh groceries in return and reuse packaging.

Simon says the long-term objective is to become “a market place” for local food producers to offer their produce online, with Modern Milkman delivering on their behalf, plastic-free – in essence building an Amazon for food.

Global expansion is also high on the agenda. The company is looking to launch in Europe, where it is currently testing the model to see if customers understand it. “We’ve seen some pretty good results,” he says.

It also has the USA, which like the UK has a tradition of doorstep milk delivery, in its sights. Simon says: “We’re passionate about finding new regions, routes and areas where we can make a difference.”