Announced as part of cost and margin review programme Project Darwin, the cuts could see a reduction of up to 40% in the number of SKUs across its six dairies. Project Darwin was announced in February and aims to save £100m over the course of the year.
It is hoped the ‘lightweighting’ exercise will enable the business to remove 400 tonnes of plastic from its core fresh milk SKUs, while maintaining the integrity and quality of the packaging.
Patrick Müller, CEO of Müller Milk & Ingredients, explained the cuts to the range. “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,” he said. “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.
Müller added that it would also help with production efficiencies.
“The environmental cost of persisting with some of these less common SKUs is significant, requiring our dairies to halt production while pack formats are changed for very small production runs, causing unacceptably high levels of product waste, energy use and complexity throughout our business,” he said. “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.”
