🔒Ellington company’s subscription-based milk delivery service finds growing customer base

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After nearly 10 years as CEO of Ellington-based Oakridge Dairy Farm, Seth Bahler was looking to diversify his revenue and build his company’s brand.

He saw the increased consumer demand for home delivery — in the age of Amazon — but also interest in high-quality, locally-grown food.

“I wanted to put a modern twist on an old [concept],” he said.

So, in 2019, Bahler launched The Modern Milkman, a subscription-based service that initially provided weekly delivery of farm products — milk, eggs, cheese and butter — in Ellington and a few neighboring towns.

In his first year — and with one delivery truck to start — Bahler grew to serve a few hundred clients. He also began to slowly build partnerships with other farms, creameries and bakeries in the state to add yogurts, breads, cookies and specialties to his offerings.

Under the model, subscribers can elect to receive a half, full or family plan of four, six or eight items, respectively.

Then COVID hit.

“We went from 300 clients to more than 3,000 within eight weeks,” Bahler recalled.

He added additional partners to support local farms and businesses and meet growing demand.

Over the past three years, The Modern Milkman has grown to include more than 30 partners across the state. Bahler said that while his subscriber numbers have dipped slightly from the height of the pandemic, he still serves a client base of more than 2,500 across nearly 30 towns in Tolland and Hartford counties.

Subscriptions renew weekly and people can pause their subscription if they’re away, or donate their order to a neighbor or food pantry.

One of Bahler’s earliest clients was Jamie Foster, a licensed dietitian and state representative from Ellington, who’s been a subscriber since 2019. Foster said The Modern Milkman has allowed her to support local businesses, farms and Connecticut’s broader dairy industry, which is a key economic driver for the state.

Connecticut’s 90 dairy farms generate a $2.2 billion annual economic impact in the state and support 5,000 jobs, according to the Connecticut Department of Agriculture.

“As a professional nutritionist, there’s an important role for dairy in a healthy, balanced diet,” Foster said. “And it’s a nice bit of nostalgia with milk delivery.”

Steady distribution channel

In the 1960s, 30% of Americans had their milk delivered. That number dropped to 7% by 1975 as supermarkets became the norm; by 2005, less than one-half of 1% of Americans had milk delivered, government figures show.

But platform-to-consumer food delivery had been growing by 12% annually prior to 2020 and is expected to reach $13.9 billion in 2024, up from $6.8 billion in 2017, according to Statista market research.

Bahler said he differentiates his delivery service by offering “premium quality products that are direct from farms.”

“And some of the farms we buy from don’t even sell through grocery stores,” he added.

One partner is Woodstock Creamery, which sells its yogurt through Modern Milkman.

“We are very local and typically sell our yogurts through farm stands, including in Rocky Hill and Bolton,” said Angela Young, who runs the Woodstock-based creamery.

But partnering with Modern Milkman has become a steady distribution channel for Woodstock Creamery, and now represents Young’s second-largest distribution channel aside from on-site sales.

Young estimates that the volume of yogurt she’s sold through Modern Milkman has increased nearly tenfold since she started partnering with Bahler in 2019. She now dedicates two days a week of her production facility to subscriber demand.

She credits Bahler’s approach of selling only select products from each partner with helping to positively impact a greater number of farms and businesses.

“He’s able to share the wealth by sourcing products from different farms,” Young said.

That’s another benefit Bahler sees in his delivery model. He buys products directly from his partners at fair prices.

“We really try to focus on the [partner] relationships with our farmers and build the connections between the farms and our consumers,” he said.

Modern convenience 

Even as inflation has impacted his margins, Bahler said his company has tried to keep its prices affordable. The business has been profitable in each of its first three years. Weekly subscriptions range from nearly $24 to $40 depending on the order quantity.

And it’s not just farmers benefiting. Josh Virkler, who bought Ellington-based Luanne’s Bakery and opened its first retail location in 2017, has been distributing breads, cookies and granola through Modern Milkman since its early days.

He had considered starting an online delivery service himself but found it more cost-effective to leverage Bahler’s distribution channel.

He said pre-COVID, he was selling about 100 loaves per week, which jumped to nearly 900 at the height of the pandemic. Orders from Bahler’s service still total several hundred. Virkler said Modern Milkman is meeting a unique consumer demand.

“It’s a mix of modern convenience with an old-fashioned feel,” he said.

Bahler said he continues to grow his subscription-based business. He now has six trucks for delivery, in addition to production and facilities managers to support the enterprise. He even sells branded insulated Modern Milkman milk boxes for customers to use for his weekly deliveries.

Last year, an Ohio farm — interested in replicating Bahler’s model — inquired about Modern Milkman’s online platform. As a pilot, Bahler decided to license his technology under a franchise model in exchange for a percentage of the farm’s delivery-based sales. He’s hoping to duplicate that in other parts of the country.

In Connecticut, he’d like to add more partners and expand his service by creating hubs closer to cities. Modern Milkman’s website provides an opportunity for prospective customers to enter their names and zip codes so Bahler can track potential demand by town.

For now, people out of his delivery area can still subscribe to order Bahler’s unique mix of products but must pick up their orders in Ellington.

Bahler remains bullish about demand and future growth. He said Modern Milkman’s client base ranges from health-conscious millennials to young families to elderly residents who cannot drive. The flexibility to adjust the weekly subscription level and order quantity provides an additional level of convenience.

After three years, Bahler estimates the subscription service now drives about 8% of his farm’s revenue.

It seems he’s found a model from the past that may be a big part of his farm’s future.