Everything you need to know about investing in milk vending machines.

Everything you need to know about investing in milk vending machines.

Consumers have really embraced the idea of buying farm fresh milk from a vending machine; People really do want to know where their milk comes from. Over 40’s buy fresh milk while younger consumers prefer Milkshakes.

The increased popularity of milk vending machines’ comes from a growing interest in sustainability and freshness, together with a desire to support dairy farmers by paying them a fair price for their products.

You can put an automatic coin operated milk vending machine in your farm shop or in a shed, preferably in an outbuilding that’s publically accessible when the shop is closed. Ideally, you want to make the milk machine available 24 hours a day 7 days a week.

Most milk machines can dispense raw or pasteurised milk, full fat or semi skimmed, cow’s milk or goat’s milk or even buffalo milk. There are even machines that can dispense two types of milk from the same machine.

If you have enough milk you could consider setting up a network of milk vending machines in convenient locations around the local area.

What equipment do you need to set up a Milk vending machine business?

You’ll need the milk vending machine itself, a bottle vending machine, somewhere to site the machines, which could be inside the farm shop or in a shed or outbuilding. Old horse boxes are a popular place to site milk machines

You’ll need mains power and a water supply for cleaning, the machine itself doesn’t need a water supply.

How many litres of milk can you expect to sell?

There are no guarantees of course because there are so many variables that you need to get right.

The UK’s leading supplier of milk machines reports average sales per milk machine at around 80 litres a day. Their most successful farmer sells over 500 litres every day.

How much should you charge?

Prices vary by region so you’ll need to do your own research. The internet makes this pretty easy.

You should be able to charge more than the supermarkets, although as a core staple milk is a very competitive market. People expect to pay a little more for the benefits of buying fresh milk directly from the farm.

The average price of milk sold through milk machines in December 2021 was around £1.20 a litre (with a low price of £1 per litre and a high price of around £1.50 per litre).

A litre of organic raw milk can sell for as much as £3.50.

This compares well with the price to farmers by the dairies which has hovered around £0.32 per litre for the last few years.

How much milk can a machine hold?

Most milk machines have tanks that can hold 50, 100 or even 200 litres. Depending on the machine you can start with a small tank and upgrade it as your sales increase.

What you need to consider before setting up a milk vending business

Be sure it’s right for you and that your milk contract allows it

It’s going to take some time to build up your direct milk sales and in the meantime you’ll need your milk buyer to take the rest of your production.

You may even be looking to just make a little extra margin from direct sales while continuing to sell the bulk of your production through your existing milk contract.

Not all milk contracts are the same, and you need to look at the wording of your agreement carefully to see what restrictions there are on your direct sales. There could be a volume limit or maybe you need to reimburse them for all your direct sales.

It may not be a deal breaker but you don’t want to jeopardise your current milk contract.

Location, Location, Location

Location is key and you’ll need a lot of passing traffic if you don’t want to see all you extra margin eaten up by advertising costs.

If you don’t have a lot of footfall you could consider putting your machine somewhere that does.

You’ll need to share a little of the profit but it could be worthwhile for the extra sales you’ll make.

Ideally, your milk machine should be available for consumers 24 hours a day, 7 days a week. People like to pick up milk early in the morning or on the way back from work.  Farm shop hours may not work for your customers.

Most successful machines are put in sheds close to the farm entrance, on busy roads with good signage. They have hard standing for cars to pull in and turn round and the parking area is always kept clean so people don’t get their shoes dirty.

Should you pasteurise or not pasteurise?

Raw, unpasteurised milk is growing in popularity and you can get a much better price for it. The average price for a litre of organic raw milk is around £3.50 compared with £1.20 for the pasteurised equivalent.

A major benefit of selling raw milk is that you won’t need to buy a pasturiser, a major saving.

On the downside your volumes are likely to be much smaller. Ideally, you would offer both options.

There are machines that dispense two types of milk but it’s unlikely that you would get health and safety clearance to mix pasteurised and unpasteurized in the same machine.

If you want to sell raw milk then you’ll need special licence and the farm will be more thoroughly inspected and monitored.

Whether or not to offer raw milk is determined to a great extend by the TB situation in your area. In the South West of England, it’s difficult to get a raw milk licence at the moment.

Remember that if you have a raw milk licence and you suffer a TB outbreak, your licence will be void. If you pasteurise and get TB, your license remains valid and you can continue to sell.

Consider the legal requirements

Before you set up your new milk vending machine, contact the environmental health department at your local council for advice.

Your farm may need to become an “approved premises” for selling food under EC 853/2004.

Regardless of whether or not you need to become an approved premises, all the basics laid down in food hygiene legislation apply. These include maintaining good standards of finish on buildings, good hygiene and having suitable equipment to handle the milk.

You’ll also need a Hazard Analysis and Critical Control Point (HACCP) Plan. This details the food safety risks on farm and what controls are in place to ensure your milk is safe for the consumer.

In the era of covid this has become even more important to your consumers and they want to see visible evidence that you are taking the risk to their health very seriously.

Anyone involved in the pasteurising or milk vending machine cleaning process will also need to have a food hygiene certificate. You can get one online for about £20.

Make sure to check your insurance policy to see if you need extra cover for consumers coming on to the farm.

Be aware of ongoing testing requirements

Milk has to be regularly tested to ensure it meets Food Standard Agency standards. Your local environmental health officer will advise on the tests you need.

Basic testing requirements for pasteurised milk include two tests, every two weeks; one assesses if pasteurisation has been carried out correctly and another looks at cell counts, bactoscans, E coli and listeria.

The cost is around £45 a fortnight, and the results need to be kept on file. Testing will be more extensive and expensive if you’re selling raw milk.

The environmental health department will also make unannounced spot checks at least once a year to carry out its own tests.

Think about equipment and equipment location

All your equipment needs to be food-grade. If you need to buy a pasteurizer then try to match the size of the pasteuriser with the milk vending machine to maximise efficiencies.

If possible the bulk milk tank, pasteuriser and the vending machine should be close together to reduce handling. Churn trollies or a pump system can also be used to make milk movement easier.

Make it beautiful and keep it clean – Comply with the latest Covid regulations

How your milk vending operation looks and feels to your customers is as important as the location. It should be bright and cheerful to attract peoples attention

Most milk vending machines can be branded for you by the manufacturers using vinyl stickers or wraps

Hygiene and cleanliness are absolutely critical and the vending area should be spotless and equipped with hand sanitisers and paper towels and a waste bin.

Is a Milk Vending business right for you?

Setting up a Milk vending business is a big investment, and could cost between £40,000 and £60,000 so it’s important to do your research thoroughly.

The fact that so many farmers have diversified into milk vending and that consumers seem to love the idea and have voted with their wallets means it is something that every dairy farmer needs to seriously consider.

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