Simon Mellin: How Modern Milkman plans to win the doorstep

It started with vision. Tele-vision, to be exact. Angered by plastic waste after watching the BBC documentary Blue Planet II, Simon Mellin launched Modern Milkman in 2018.

Fast forward to today and the company has around 130,000 customers in the UK, operates in five US states, and has annual turnover north of £50m.

Although the UK still generates about 70 per cent of revenue, Mellin expects the two markets to level out in the next 12 to 18 months, with the US pulling ahead after that.

He is already planning five to ten years out. “We really want to win the doorstep,” he tells Sir Richard Harpin on the Business Leader podcast. In our interview, you will learn about:

• How mentors and non-execs helped him avoid “silly mistakes”
• Why a weekly P&L keeps the business sharp
• Why founders should do their due diligence on investors
• Mellin’s three tips for cracking the American market

From milk cart to mobile app

Simon Mellin bought his local milk round for about £2,000 from a roofer who was running it for extra cash. It came with a truck, 100 customers and a little black book with one customer on every page.

“I knocked on these 100 doors,” he says. “90 of the people weren’t in and 5 of the 10 who were didn’t have any cash. It’s impossible to build a consumer business that gives credit.”

The demand was clearly there. Yet the infrastructure and technology were not. That doorstep reality check shaped Modern Milkman. Mellin grew it by knocking on doors and testing digital marketing. 12 months later, Covid hit and that local brand presence paid off.

“Through Covid, we grew probably 4x or 5x in about two weeks,” he says. Despite the name, he doesn’t see Modern Milkman as a dairy business: “I think ultimately we’re a logistics business. What we put through that supply chain is pretty irrelevant to us.”

In the UK, deliveries run through what Mellin calls “a pseudo-franchise model” based on Amazon’s Delivery Service Partner system. Modern Milkman supplies the vans, depots, stock and sales, and partners hire the drivers. “It was a mix of Domino’s and Amazon in developing this model,” he says. “They care because it’s their business.”

How Modern Milkman cracked the US

Mellin’s route into the US came through a remarkable coincidence. In 2018, a fifth-generation dairy farmer named Seth Bahler in Connecticut launched his own Modern Milkman. The two founders swapped messages on Instagram during Covid and in January 2024, the businesses merged and Mellin moved to America that August.

His advice for founders following him comes in three parts.

First, buy rather than build. Bahler’s knowledge of the market fast-tracked everything and Mellin moved over to immerse himself in it. “I’m pretty sure if we’d started organically, we’d have failed,” he says.

Second, learn the language. “The common language gives us a false sense of security that it culturally works the same, and it couldn’t be further from the truth,” says Mellin.

For example, milk round is a “milk route” and pints become quarts and half-gallons. Americans also buy for food security and provenance rather than sustainability.

Third, take it slow. “America is like 50 or 51 countries in its own right,” he says. “It’s really easy to throw yourself across multiple states and geographies, but attacking one state at a time, making that work, understanding that state and then moving forward is really important.”

Why Modern Milkman uses a weekly P&L

In a delivery business, small margins add up quickly. “The 0.1 per cent is very important in our business, never mind the 1 per cent,” Mellin says. Speed of information is central. The company does a weekly P&L, instead of a monthly or an annual one, to shorten the lead time on information.

He says this practice allows them to make changes faster and keep on top of the business in a better way. Getting the data right has taken several attempts and Mellin admits it is still evolving: “You’re only as good as the data beneath you to make decisions or support decisions you’re making.”

Modern Milkman has raised about £65m. Before the war in Ukraine and the turmoil in financial markets that followed, money flowed freely. “We were burning a lot of cash at that point because everything was about growth,” Mellin says. When it dried up, the business halved its team.

Fundraising routes have included both seed and angel, as well as institutional venture capital and venture debt. Mellin warns that fundraising is too often celebrated as a milestone in itself. “You get tied up in valuation and all the mechanics that sit around that,” he says. “I think sometimes it can create perverse incentives where you’re on a path that’s not necessarily best for you as an individual.”

His own backers have been supportive but he knows that isn’t always the case: “Investors often do due diligence on the business, but it’s not that often that the business does due diligence on the investors.” The real test comes later. “It’s always in the bad times where you really see what people are about.”

Simon Mellin’s four lessons for leaders

Do due diligence on your investors. “Investors often do due diligence on the business, but it’s not that often that the business does due diligence on the investors,” Mellin says. It is in the bad times that you see what backers are really about.

Hire for hunger, not logos. Big-company CVs on big salaries don’t always translate. His best hires have been “hungry people, very curious, who approach everything with a first-principles approach”.

Build in a handbrake. Bullish founders need people around them who can check their instincts. Mellin credits mentors and non-executives who “stopped us making silly mistakes”.

Just get on with it. Plenty of people have great ideas and never act on them. “If you don’t try, you don’t know", he tells Sir Richard Harpin.

Watch the full conversation with Simon Mellin on the Business Leader podcast.