Glen Herud’s mission for an ethical dairying company isn’t over yet. In part two of his series documenting his attempts to launch Happy Cow Milk 2.0, Herud talks about single-use plastic in the dairy industry and the plan to get farmers to adopt the “Happy Cow way”.
It’s been a very busy month scurrying around rebuilding Happy Cow Milk Company. I’ve been meeting with all the players in the milk business: supermarkets, distribution companies, and even other milk companies. After outlining my plans to one industry player, they paused, leaned forward, and said: “Glen, if you want to make money, put your milk in a plastic bottle.”
Do I want to make money? Well, yes. It sucks to have no money.
But the reason I have the support of our fans is because we’re dedicated to making a meaningful change. Happy Cow is the company that people just won’t allow to die!
My continued work has been made possible by the tribe of Happy Cow fans. These people have committed to donating anywhere from $3.50 to $100 per month via our Patreon account for the next few months while I search for a way to resuscitate the business.
It’s extraordinary. Complete strangers committing their own hard-earned money because they believe in better dairying and plastic free milk. It’s these wonderful people who will get the credit for the success of Happy Cow Milk.
So, what have I actually been doing?
The hype has died down and now it’s back to reality. After my first Spinoff article where I outlined my story, I’ve received messages from all sorts of companies and people in the milk, distribution, and retail industries with offers to help the Happy Cow cause and find a solution to the plastic problem. I’ve spent the last two months meeting with these people and these companies. But as time has gone on, many have lost interest or pulled out once it became clear how tricky the problems were.
Let’s take plastic bottles as an example. No one in the industry is seriously interested in trying to remove plastic from the milk business because it would require huge changes within their organisations. This is uncertain and risky for their businesses.
This shows how totally addicted to single-use plastic we are as a society. China has recently refused to take the world’s plastic, sending shock waves through the global recycling industry. Around the world, stockpiles of plastic are piling up in recycling centres because, for many countries, it doesn’t make economic sense for them to recycle it. In New Zealand, our recycling system is pretty feeble anyway. Most plastic milk bottles go to landfill and that’s not about to change anytime soon.
Meanwhile, there’s no slowdown in the amount of plastic packaging being used. Quite a few companies have announced recently that they’d be introducing ‘compostable bags’, which is the sort of initiative that gets headlines and makes it look like these companies are doing something.
But the fact is, there’s very little commercial capacity to actually compost all these plastic bags. While these bags are theoretically compostable, they don’t compost in water or landfill. They require a commercial-scale compost facility with heat at 70 degrees. There are precious few commercial composting operations in New Zealand and no adequate system for getting the compostable material to them.
What’s worse, compostable bags can’t be recycled with plastic bags, which means recycling plants and composting plants bear the additional costs of sorting. Most of these bags won’t get recycled or composted, but the public will think they’re doing something.
All this is to say that plastic bottles are not an option for Happy Cow Milk. The original plan was to have 20 farmers across New Zealand equipped with micro milk processing plants who could provide milk to their local communities in reusable packaging at an affordable price.
After I shut down the business, I wondered if this decentralised structure was really achievable or even the best approach. Many advisors have said that it was too complicated with too many moving parts and too much risk.
But in the past month I have talked to the owners of a couple of milk brands. I’ve spoken to the owners of the expensive milks, the very expensive milks and the very cheapest milks. The key insight I got from them was that it’s generally uneconomic to transport milk more than 250km unless your customers are willing to pay $6 per litre.
This is where it totally makes sense to buy from a local farmer/producer who’s located 20-30 km from their major centre. This local model reduces distribution costs dramatically.
After my business failed, I had so much self-doubt. Was I too idealistic? Maybe I didn’t actually understand the milk market fully? Was I ignorant to some key facts? Now that I’ve had time to reflect with my little team of helpers, we’ve managed to analyse the milk business from every angle and I feel I was actually on the right track.
The reason I failed was because I was trying to make a big change and I ran out of resources to see the changes through fully. But now we have your support, and I know that we’re on the right track.
Much of my time over the past month has been spent building the business case. A decentralised model actually makes fundamental business sense because we’re reducing the transport of raw milk from farm to factory and also reducing the cost of transporting the processed milk to consumers.
If we can make it convenient and cost-effective to buy Happy Cow Milk, then I think it’s achievable to capture 5% of the fresh milk market.
We’d need to partner with about 20 farmers across New Zealand who’d each milk about 120 cows and produce 2,700 litres of milk per day. Each farmer would turn over $2.2 million dollars per year. Trust me, if you’re milking 120 cows and bringing in $2.6 million dollars, you’re doing pretty well.
Here’s the key: when a farmer partners with Happy Cow Milk and uses the system we’re developing, they become much more profitable. We expect some of that money to go back to the farm in the form of less intensive farming and much better animal welfare, which we call the “Happy Cow way”. We end up with happy cows, happy farmers and happy customers who can drink milk without any guilt about plastic bottles or intensive farming practices.
So, can we find 20 farmers to jump on board the Happy Cow train? There are 6.5 million dairy cows in New Zealand, so you’d think we could find 2,800 Happy Cows.
Finding these happy herds is my next mission. If I still have no luck, then I guess we’ll work on a plan B. Our fans have told us we can’t quit, and so I carry on.
The Spinoff’s business section is enabled by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.
The Spinoff Daily gets you all the days' best reading in one handy package, fresh to your inbox Monday-Friday at 5pm.