How to Reduce Monthly Milk Costs

When we were called into Adcock Ingram, they wanted to know how to reduce their monthly milk costs. At the outset their bill was around R25,000 per month with about R20,000 of that being spent on milk. For the number of staff members which they had (250 in total) they were spending way too much money on milk and they were looking at ways to reduce their monthly bill. Like with all customers we explained that we can’t save every customer money on their monthly coffee, milk and sugar supplies but we believed that we had a great chance under these circumstances based on their disproportionate spend on milk relative to the number of people they had.

Why do companies spend so much money on milk?

When you break up a company’s monthly spend on coffee, sugar, tea and milk one will almost always find that a company’s milk spend is by far the highest of the four. There are four reasons why this is the case:

1. Unfortunately milk is expensive. No way around that. A litre of long life milk costs around R13 before delivery.
2. The majority of milk usage goes towards cereals and porridge.
3. Most employees use a lot of milk in a “white coffee” or “white tea” with the majority of the cup being filled with milk.
4. In some instances (not all) milk does grow legs and finds its way out the door of some companies.

Ways to reduce monthly milk costs:

There are a number of ways a company can reduce their milk spend.

Using Creamer vs Milk: How Much Money Does it Save

Some companies start out trading their milk for creamer as a first effort to save on costs. For some companies this can work well but using creamer is not without its disadvantages.
The advantages of using a creamer like Cremora are:

• Cremora is considerably cheaper than milk
• Creamer can’t be used as easily for cereals and porridges.

The negatives of using a creamer compared to milk are:

• The taste does not appeal to everyone
• Creamer is not a very healthy product. Most creamers consist of glucose and palm oil which makes them very fattening and is known to cause cholesterol.
• Because creamer is in a powder form it is easier to steal than milk

Using Fresh Milk vs Long Life Milk:

Fresh milk can be considerably cheaper than long life milk and this too can be a good way to save on milk costs.
The advantages of using fresh milk vs long life milk are:

• Fresh milk is about 20% cheaper than long-life milk
• Most people prefer the taste of fresh milk of long life or UHT milk

The disadvantages of using fresh milk

• Fresh milk goes off a lot quicker and requires careful planning to order just the right amount
• Fresh milk almost always comes packaged in sachets and not hard cartons which can pose a storage challenge

Installing Coffee Vending Machines to reduce milk costs

The last way to reduce milk costs is to install vending machine. This is what we suggested for this customer. Coffee vending machines save on milk costs through control. A vending machine works by dispensing only a set portion of milk for everyone’s coffee or tea. This eliminates the possibility of people using milk for cereals and porridges and eliminates theft.
The advantages of using coffee vending machines to reduce milk costs are

• There is no possibility of using milk for cereals and porridges
• People cannot use an excessive amount of milk in the coffees or teas as vending machines dispense only a preset amount
• Vending machines mix and stir everything before the product is dispenses eliminating the need for spoons.

The disadvantages of using coffee vending machines

• Vending machines do use a powdered milk which is not to everyone’s taste
• Employees can feel that they are now being limited as they no longer have control over how they use their milk
• Vending machines comes at a cost themselves (either a rental cost or a purchase cost)

Client Results:Did they save money?

Adcock Ingram was spending R25,000 on coffee, sugar and milk and they were looking at ways to reduce this monthly spend. After installing vending machines their milk bill dropped by more than half and their coffee and sugar usage dropped by about 40%. Overall their monthly spend came down to R12,000 on average per month giving them a total saving of approximately 50%.

Will Coffee Vending Machines Save you Money?

Short answer is, It depends. Coffee vending machines have proved successful in saving money for companies but it does not work for everyone. As a rule of thumb vending machines do not save costs for customers which fit the following profile:

• Too Few Employees – Offices of less than 30 employees for the most part can’t save money on a vending machine. Because installing a vending machine means they have to now pay for a rental. Any saving which a vending machine produced would usually be eaten up by the rental costs.
• Wanting to give options – Vending machines save money through controlling how people make their coffee and tea (not through the fact that the product used in vending machines is cheaper) If you want your staff to be able to control how much milk and sugar they use when they drink coffee and tea and if you want your staff to be able to use milk for cereals, vending machines are probably not suited to your company
• Already have excellent control measures – We have seen some companies who already have excellent measures in place to ensure their people do not use excessive amounts of products. If your company is already controlling usage in some shape or form vending machines are probably not right for you

What is the Next Step?

If you are spending too much money currently on coffee, sugar and milk supplies and you are looking to curb your costs, coffee vending machines might be the solution for you.

If you want to find out more as to whether they might work for you please click the find out more option below to arrange a rental-free trial!