In the preceding chapters basic information on the technical requirements and costs of various liquid milk processing and distribution systems has been presented. The term basic information is used in order to stress that no attempts have been made in this study to present a complete technical assessment and cost estimate for milk packaging, transport and retailing. The analysis presented in this paper aims at providing data necessary for assessing main requirements and basic differences in requirements among various industrial liquid milk marketing systems. Coefficients have been applied in the cost estimates in order to arrive at indicative financial conclusions but their character inevitably leaves a substantial margin of error. The margin is most likely to be larger than the magnitude of various expenses not considered in this paper such as costs of supervision, indirect labour, administration concerned with liquid milk distribution, costs of sanitation etc. A substantial part of the costs of equipment has not been specified in detail but assessed as a percentage of the main part of the machinery (10 to 30%) since their value will depend mostly on the source of supply (mainly local). Except for single-service packaging systems, stocks of materials have not been included in the calculations, since they will differ very much in size and costs depending on the situation in the country; for instance stocks of new bottles and their accommodation will be larger in countries where bottles have to be imported as compared to those where they are produced locally. A very substantial part of the costs - the losses of milk - could not be estimated financially since the price of milk differs considerably from country to country.
However, apart from all the above reservations, it is believed that the indications given in this analysis will provide those concerned with sufficient information on the basic characteristics of major liquid milk marketing systems. The analysis of retail margins is discussed because of the inclusion of automatic vending machines as one of the systems analysed. The bulk of the costs of this system lies outside the milk plant, and had to be compared with retailing costs which, in this case, generally mean retail margins. Selecting an arbitrary value for a constant margin for packaged milk is certainly a simplification of a much more complex problem. However, those concerned may rectify the analysis of applying margins more suitable to the commercial systems of a particular area.
The choice of a system cannot be based only on figures related to technical requirements and their economic implications. The demands of markets do not depend entirely on the costs of a product. Therefore, it seems appropriate to add a few more relevant considerations not directly related to economics.
Pasteurised milk, however packaged, has a very limited keeping quality because spore-forming micro-organisms survive the heat treatment and germinate later to cause the milk to sour. Even if it is stored at the milk plant, transported and stored at the retail centre or shop at a temperature below 4°C it should be sold to the consumer within about 24 hours of processing. Milk dispensed from cans or automatic vending machines is unlikely to be kept cool after sale and its keeping quality will be greatly influenced by the hygienic condition of the consumer's container. The milk cannot be expected to remain sweet for more than a few hours in warm climates unless it is boiled forthwith, as is a common practice under such conditions.
If the purchaser of pasteurized milk packaged at the milk plant and handled under refrigerated conditions can place the package unopened in a domestic refrigerator within a short time it would be reasonable to expect the milk to keep several days before opening. Once the package is opened the onset of souring of any milk not used immediately will still be delayed for some hours if it is re-placed in the refrigerator, especially if it is retained in the original package. When the consumer has no access to a refrigerator it is usually necessary to use the milk on the day of purchase.
In-bottle sterilized milk at the completion of processing contains very few residual micro-organisms, indeed some bottles may be sterile. Refrigeration is therefore unnecessary and it is generally safe to delay sale of the product for up to 7 days. This may have advantages for the milk plant and the retailer though it must be remembered that the milk represents locked-up working capital until it is sold. However, these two factors make it possible to distribute the milk to far greater distances, though this is limited in practice by the need to recover the bottle. This does not apply if single-service plastic bottles are used. After sale, in-bottle sterilized milk should have a shelf life at ambient temperature of a further 7 days before opening the package. After opening, unused milk remaining in the bottle may still remain sweet for several days provided the bottle is hygienically re-closed after each use.
The UHT process combined with aseptic packaging is such that the packaged milk is virtually sterile. A practicable hygienic standard is that there should be not more than one organism in 1 000 packages. Thus if no micro-organisms are present there can be no bacterial spoilage and the keeping quality on this account is unlimited. In practice chemical instability determines the shelf life and this can be 4 to 6 months before consumption. After opening the package the same considerations as for in-bottle sterilized milk apply. Typical markets for UHT milk are thus those which need, and can pay for, this long life. They include supply to very distant markets, including export, for ships and aircraft and, in some cases to local consumers who wish (and can afford) to keep an emergency stock in ambient temperature storage.
It will be obvious that the success of a system involving re-use of containers - normally glass bottles - depends entirely on the efficiency of bottle recovery. This is achieved in one of three ways. Firstly, the milk may be delivered to the customer's doorstep and empty bottles recovered at the same time. This system has the advantage that it can work in the customer's absence, payment being collected, say, once per week. Secondly, travelling shops may tour the area with frequent stops in each street making their presence known by an audible signal. The customers come to the vehicle bringing empty bottles on which they have already paid a deposit equal to the cost of the bottle. If they require more full bottles than the number of empties they return, extra deposits must be paid. If they require less a corresponding credit is allowed. Thirdly, milk may be sold only from shops to which the customer must go to purchase milk. A similar arrangement whereby the consumer pays a deposit on the bottle is usually operated.
Where one of these methods or a combination of them can be operated it is almost certain that for pasteurized and in-bottle sterilized milk the returnable bottle is the cheapest form of retail packaging. At the present time, countries using glass bottles for more than 50% of packaged pasteurized milk include Bulgaria, India, Japan, Malta, New Zealand, Poland, South Africa and the United Kingdom.
Nevertheless, single-service packages have certain advantages as evidenced by the fact that they are widely, if not exclusively used for pasteurized milk in Austria, Brazil, Canada, Switzerland, Sweden, Denmark, Germany, Finland, France, Israel, Norway and USA. For UHT milk, single-service containers must be used as there is no commercially available system for aseptically filling glass bottles. From an organizational point of view, neither the milk plant nor the retailer has to worry about container recovery and the capital cost of equipment and space for making the container fit for re-use are eliminated. The single-service container is much lighter in weight and generally occupies less space, both of which advantages are attractive to the consumer particularly if he has to purchase from a shop. As has been shown, all the single-service packages are more expensive than the returnable bottle where this is practicable. The most competitive is the sachet because it uses the least weight of material and the packaging operation is simple but this is offset to some extent by the unattrative nature of the filled package and its vulnerability to damage.
From the point of view of availability of materials most countries can produce glass from their own resources whereas in developing countries paper/plastic laminates and the high technology required to produce them must generally be imported with a corresponding need for foreign currency. In some cases disposal of used packages may also present a problem.
These characteristics of the various methods of processing and packaging liquid milk must be borne in mind in relation to the character of the market it is intended to serve and the habits of the milk-consuming population. It should be noted also that the taste and colour of pasteurized milk is different from either in-bottle sterilized or UHT milk and all are different from raw or boiled milk. Where milk is being introduced virtually as a new food these differences do not matter but where the consumer is already accustomed to a particular type time may be needed for a change to be accepted.
Several factors have to be considered when comparing the merits of packaged milk with those of milk sold from bulk. Firstly, as has been shown above, only pasteurized milk can be distributed either packaged or from bulk. Both of the other types (sterilized and UHT) cannot be sold without packaging. Secondly, for reasons also discussed above, the keeping quality of pasteurized milk depends on the temperature at which it is kept after processing. If it leaves the milk plant cold store at a temperature well below 10°C, is transported to the retail shop in insulated vans and is kept by the retailer under refrigerated conditions, the keeping quality of the packaged product after sale is almost always likely to be better than if the milk is dispensed into the customer's container. In addition, packaged milk is generally measured accurately and is safe from adulteration, which is not the case when sales are effected from cans.
If at any stage of operations the temperature of the milk is allowed to rise its keeping quality decreases at a rate depending on this rise and on the time for which it is exposed to ambient temperatures before sale. The system of distributing milk from bulk through automatic vending machines offers a continuity of the ‘cold chain’. The temperature of the milk dispensed into the customer's container is low which gives it an advantage over pasteurized milk, packaged or in cans, sold under unrefrigerated conditions.
One of the major drawbacks of sales through vending machines is the necessity to rebuild or construct centres designed to accommodate the machines. This may often be difficult in crowded cities. Besides, both the known designs of the machine (as applied in Mexico and India) are available only in capacities of 2 000 and 1 000 litres. Simplification and further development of these machines is desirable in order to make their application more flexible and suitable for varying conditions and requirements. The experience gained by their application, particularly in India, seems to indicate that the system enjoys full support from the consumers, both in the lower and higher income strata of the society.
