Thursday, 5 September 2013

Milk vending

Milk vending seems to be expanding. This is the fourth vending operation I know of around the Nelson region. "Village" milk was first, in Takaka. And then the Riverside community and another farm at Moutere jumped in at more or less the same time.

There are strong incentives for farmers to install vending machines - it arbitrages a pretty big margin between prices at the farm gate and the supermarket. Farmers get around 70c /litre for bulk milk, so selling direct for $2 or the $2.50 these people charge is quite attractive and still a reasonable deal for consumers.

Consumers also get what you might think of as a "provenance" benefit. They know exactly where the milk comes from. Assuming that Tesco knows what its doing, this is worth something.

Two other interesting features from this story.

  • they are selling "lightly pasteurised" instead of raw, though one of their new machines will sell raw milk - sounds like a sensible diversification strategy and it differentiates them from the other three.
  • their natural inertia was finally overcome by Fonterra cancelling their winter milk contract - nice work big guys!

1 comment:

  1. Seems only a matter of time before craft milk hits the shelves.