Meet the entrepreneur behind one of Europe’s fastest-growing startups… The Modern Milkman

The butcher, the greengrocer and the milkman were once key figures in everyday life in Britain.

But in a world of 24-hour supermarkets and processed foods, they risk extinction.

The dairy farmer went from serving about 85 percent of households in the late 1970s and early 1980s to about 3 percent today.

Some may see this as a sign of the times.

But not Simon Mellin, the boss of one of Europe’s fastest-growing start-ups, who is on a mission to turn them around.

Mellin, 38, founded The Modern Milkman in Lancashire six years ago after watching an episode of Sir David Attenborough’s BBC series Blue Planet.

The budding entrepreneur, who grew up on a farm and left school “without any qualifications”, said he was shocked by the impact of single-use plastics on the environment and wanted to start a business that could make a difference.

He started delivering milk in his home village of Laneshaw Bridge, near Colne, but quickly realised the old-fashioned business model was not suitable for the 21st century as customers wanted more flexibility.

Gone are the days of leaving cash on the doorstep along with a note stating when you want delivery. Now, homeowners want to change their order with the push of a button.

Enter The Modern Milkman. The app focuses on delivering glass-bottled milk, as well as bread, yogurt, eggs, fruit, and vegetables. Just like the old-school milkman, the company delivers overnight, so customers wake up to bottles of milk on their doorstep.

It doesn’t produce its own products, but works with local suppliers, meaning customers can place orders on the app up until 9pm the day before to receive their items by 7.30am. Delivery costs £1.50 for three time slots a week.

The group, now valued at around £250m, briefly gained notoriety in the 2019 general election campaign when then-prime minister Boris Johnson joined Mellin on one of his morning delivery rounds.

Johnson also made headlines that day after taking refuge in one of the company’s refrigerators while trying to avoid reporters.

Business boomed during the pandemic as increasing numbers of households sought delivery options during lockdown panic.

In 2022, that helped propel The Modern Milkman to a record £50m investment round, led by private equity firm ETF Partners and investment group Insight Partners.

The company now makes more than 300,000 deliveries a week, from Newcastle to Southampton, and has recently expanded into the US after acquiring a US company of the same name.

But is this pandemic-fuelled hype about to turn sour? Delivery apps were among the biggest victims after the lockdown boom faded.

Companies like Getir, Gorillas and Gopuff, which promised to deliver items within minutes, expanded aggressively in 2020 as they sought to capitalize on nervous shoppers avoiding supermarkets.

But they failed to maintain that momentum because they spent too much too quickly to expand and the world opened up again.

Mellin insists that The Modern Milkman is different, even though he is “often lumped in with those guys.”

Unlike on-demand grocery shopping apps, which promise to deliver a wide range of products as quickly as possible, Mellin’s company has a smaller selection of items that are scheduled as part of a larger delivery route.

So while people like Getir might make one or two deliveries per hour (having to go to different parts of the city), the Modern Milkman will schedule a route that means his milkmen could make between 30 and 40.

“Retailers have created an expectation in customers that stores are open seven days a week, 24 hours a day, and that we can buy anything whenever we want,” Mellin said.

“We are planning our routes and doing them all at once rather than feeding the impulsive nature.” In 2022, the company recorded sales of £46m but losses of £23m. It has not released its figures for 2023, but Mellin insists the UK business is profitable and the US will continue to grow.

The US business is focused on Connecticut and Massachusetts, Ohio and Rhode Island, but Mellin’s ambitions for the future are big.

“The perfect outcome would be to go public. I think we would have to be careful with the private equity route because we don’t want people to distort what the brand is trying to be,” he said.

But he added that he was “not sure” whether it would be listed in the UK or the US.

“The UK is not without its challenges from a broader market perspective,” he said. “I’m British and patriotic and I’d love to do it in the UK, but I have other stakeholders that I’d have to consult on that.”

His comments fuel a wider debate about reluctance to list in the UK as domestic companies are drawn elsewhere.

Mr Mellin said: “There are two aspects. One is valuation. If you can get into the US market, US money prefers to invest in US companies… The other aspect is that the press can be damaging to founders and people can be afraid of listing in the UK.

“I think people don’t want to be the centre of attention. My success in the UK would be significant, but in the US it would be insignificant.”