Why the farm milk vending machine market has skyrocketed

The market for milk via farm vending machines has skyrocketed during the pandemic as more consumers shop locally.

Daniel Saunders, business support at milk and vegetable vending machine supplier The Milk Station Company, says there are around 400 milk vending machines across the UK, with business accounting for around 75% of the market.

“We have over 300 machines across the UK including Ireland and the Channel Islands.

“Growth in sales of milk and farm products across Europe and the UK reflects consumers’ growing interest in sourcing products that are locally made, exclusively on their doorstep,” he said.

See also: So you want to… set up a milk vending machine?

What is the average cost of setting up a vending machine on a farm?

The average cost of a pasteurizer is in the £30,000 range, according to The Milk Station Company.

“Customers tend to buy the machines outright, often paying them back within a year, but there are some who rent or lease them,” says Mr. Saunders.

What is the demand?

According to Mr. Saunders, footfall has increased at all customer sites during the pandemic.

“Since the easing and eventual easing of restrictions, the demand for these machines has continued unabated.

“Demand has also led to additional machine purchases from existing customers, as well as word of mouth and social media exposure, driving new customer inquiries and purchases.”

Is a building permit required?

If you are constructing a building on a site where none previously existed, planning permission will likely be required.

However, most customers are repurposing existing buildings, says The Milk Station Company.

Is insurance necessary?

Chris Walsh, agricultural specialist at NFU Mutual, says he continues to see interest in agricultural retailing via farm shops and vending machines, but notes that bringing the public to the farm and selling produce direct can introduce new risks.

“Business and product liability insurance is a top requirement for customers accessing the machine while using it or consuming the product in the event of an accident.

“It’s also important to check your facility policy to see where the machine is located to ensure coverage extends to property damage and theft for machinery and stock when it is off site,” he says.

“You might also want to consider business interruption insurance, especially if the vending machine is down and generating significant income,” he added.

Mr Walsh advises when you embark on a new business to consider insurance and risk management from the outset as this will ensure that there are no problems obtaining insurance coverage and that you have fully priced your plans so the business can take off Case calculates later.

“Constantly review the amounts and values ​​you insure to avoid under-insurance and let your insurer know if you will be hiring more staff or receiving new equipment or stock during the year. Milk prices and equipment, for example, have risen sharply.”

Advice to operators of milk sales outlets on the farm

farmers weekly spoke to several producers who are already running milk vending machines to share their tips for others considering the company.

  • Location is key to attracting a large footfall, with high local population density required to achieve the best returns.
  • Off-site milk vending machines can also work well at campsites or in farm shops, especially if growers don’t want to interact with the public directly on the farm.
  • When considering the potential margins for the business, consider the initial start-up costs, equipment depreciation, and the time you spend refilling the vending machine each day. The time required for filling and emptying machines usually takes up to an hour per day. However, this can be longer if the machines are in other locations away from the farm.
  • Food safety requirements must be met and a food hygiene certificate and HACCP (Hazard Analysis and Critical Control Point) plan are essential.
  • Depending on the volume of milk sold, local authorities may also require establishments to be classified as approved establishments for the sale of food according to EC 853/2004.
  • Milk should also be tested regularly according to Food Standards Agency standards. Local environmental health officers should be able to provide further information on specific legal requirements.

First Milk introduces farm vending machine franchises

Members of the First Milk farmers’ cooperative can enter the vending market through a different route with the processor’s vending franchise program to sell milk and cheese under its new Golden Hooves brand.

The brand has a strong focus on regenerative farming practices and will work with producers who apply regenerative principles on the farm.

Stuart McDonald, Head of Golden Hooves at First Milk, says: “There are two locations that are operational and the plan is to increase that to around 20 to 25 locations over the next 18 months.

“We created Golden Hooves as a brand platform to tell the story of regenerative agriculture and connect the consumer to the people and the product,” he says.

First Milk may offer additional dairy products under the new brand over time.

The locations will also have a vending machine selling groceries such as jams, honey, cream and butter, all sourced from local businesses that also follow regenerative principles.

franchise agreement

First Milk will franchise all of its locations that produce pasteurized, non-homogenized whole milk.

Arrangements and costs vary between farms, but include a franchise fee and a small percentage of profits from sales that goes to First Milk, as is common with most franchise arrangements.

First Milk provides the branded vending machines, but the pasteurization equipment must be paid for and installed by the farmer’s franchisee.

Small pasteurizers typically cost between £6,000 and £15,000 for units that can process between 100 and 500 liters per day.

The dairy cooperative will also provide marketing, business and administrative support to franchisees, including ordering products for the produce machinery.

Mr. McDonald says, “We are able to provide that overarching brand and also social media plans, training and support to drive traffic.”

Case Study: Hooks Farm Dairy, Borrowash, Derbyshire

The Smith family opened the first Golden Hooves milk vending machine on their farm near Derby earlier this year.

The 120-acre grass-based dairy farm milks about 50 cows through a robotic parlor.

Brothers Dan and Adam Smith are the third generation at Hooks Farm and helped grow the dairy business in 2018 with the installation of a basic milk vending machine with an honesty box for payment.

The farm is on the outskirts of town near a densely populated area, which has supported demand.

After initially selling around 150 liters per day, demand rose to 200 liters per day during the peak of the pandemic.

The company also introduced 18 flavored syrups for milkshakes.

Hooks Farm was approached by First Milk last fall to operate Golden Hooves’ first location.

In the meantime, a milk and a vegetable vending machine have been installed.

© Louise Allen Photography

added value

Dan Smith says: “Trade is now around 300 liters a day and more on weekends. Additional income is now also coming from the sale of cheese, butter and cream from other local first milk farms.”

This gives others who don’t have an outlet the opportunity to add value as well. The cheese will be marketed under First Milk’s Golden Hooves brand and other products are being tested, says Mr Smith.

According to Mr Smith, the average spend for each customer has almost doubled to around £7.

Milk is £1.20/litre, £2 for two liters and 80p for 500ml, plus 50p for a syrup shot for milkshakes.

Further expansion is being considered, with the current offering being able to add ice cream and coffee.

“Besides the financial benefits, it’s so much fun and enjoyable when you can interact with your customers and there’s a story behind every liter of milk,” says Mr. Smith.

“We chose to work with First Milk because their help and knowledge helps us. The Golden Hooves team has really helped us with the marketing, social media and the regenerative side of the business.”

All Golden Hooves outlets will sell pasteurized milk, requiring farms to invest in an on-farm pasteurizer.

Mr Smith says the initial cost of buying their pasteurizer was £12,000 a few years ago.

Leave a Comment