Müller Milk & Ingredients (MMI) has revealed that it is looking to cut up to 40% of the 835 fresh milk and cream SKUs manufactured across its network of six dairies in the UK as it works to reduce costs, plastic use and food waste.
The SKU rationalisation is part of its ‘Project Darwin’ programme, which was unveiled in February and aims to reduce costs by £100m and improve margins to secure a “vibrant and sustainable future for the business”.
MMI stated that by working collaboratively with customers to focus on popular SKUs, it will improve its environmental performance, supporting its long-term sustainability.
A light-weighting exercise, made possible by Müller’s investment on its in-house milk packaging capabilities, will also allow the business to remove 400 tonnes of plastic from its core fresh milk SKUs, while reducing distribution costs.
Patrick Müller, CEO of MMI said: “At a typical dairy more than 90% of the milk we buy from farms is manufactured into less than 80 different product formats, meeting customer requirements for different milk types, pack sizes and labelling formats.
“At the same dairy, the remaining 10% of milk would be processed into a further 125 SKU formats, which is staggering. Typically this milk will be packed into smaller or unusual formats which tend to be far less efficient not only in terms of manufacturing, but through the whole supply chain.
“The environmental cost of persisting with some of these less common SKU’s is significant, requiring our dairies to halt production whilst pack formats are changed for very small production runs, causing unacceptably high levels of product waste, energy use and complexity throughout our business.
“We are working closely with our customers who are fully aligned with the need to simplify and improve environmental and business performance and we are extremely encouraged by the response we’ve had.”
