The company said it will also be able to reduce plastic use by 400 tonnes per annum whilst substantially cutting food waste and distribution costs as it simplifies its range of fresh milk and cream products.
The SKU rationalization program, part of MMI’s Darwin project, could see the company pare down the 835 fresh milk and cream SKUs manufactured across its network of six dairies by up to 40%.
MMI said by working with its customers to focus on popular SKUs, the company will improve its environmental performance, benefitting customers and consumers and helping support the long-term sustainability of the business.
The Darwin project is a 12-month £100m ($131m) cost and margin improvement program that was announced in February.
High environmental 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 labeling 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.”
Müller said the environmental cost of persisting with some of these less common SKUs is significant, requiring 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.
“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.
“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.”
Müller UK & Ireland is wholly owned by Unternehmensgruppe Theo Müller which employs 24,000 people throughout Europe. In the UK, Müller buys a quarter of all milk produced on British farms, from more than 1,650 farmers in Britain.
Müller Milk & Ingredients employs 5,500 people and is Britain’s largest producer of branded and private label fresh milk, cream, butter and ingredients products.