Müller Milk & Ingredients (MMI) has announced it could cut up to 40% of its 835 fresh milk and cream SKUs in the UK as part of a major cost-cutting drive.
Labelled the ‘SKU rationalisation programme’, the move forms part of Project Darwin, which was announced by the business in February and aims to save £100 million.
The Darwin initiative includes a comprehensive review of every aspect of MMI’s operations – including logistics, back office and people organisation – in order to simplify the business and reduce costs.
By working collaboratively with customers to focus on popular SKUs, MMI said it will improve its environmental performance, supporting its long-term sustainability.
The project will allow the business to remove 400 tonnes of plastic from its core fresh milk SKUs, while reducing distribution costs.
Patrick Müller, CEO of Müller Milk & Ingredients, 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.
“Fresh milk is a loved, iconic British tradition and it’s in 96% of the nation’s fridges. With Project Darwin, we have an opportunity to reinvigorate the industry and we will do so by challenging established practices that have become the norm, benefiting the whole supply chain in the short, medium and long term.”
In January, Müller announced the introduction of a new recyclable cap in the UK, which uses 13% less plastic. All the company’s branded and private-label fresh milk products in the country now include the lighter cap.
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