Milkman concept revived by Dutch online supermarket seeking edge

A Picnic BV electric vehicle. The company has a concept dubbed 'Milkman 2.0' to deliver groceries using electric vehicles. — Picnic BV

The milk float, a home-delivery service that evolved from horse-drawn carriages to early electric vehicles, belongs firmly in the past. Or does it?

A little known Amsterdam-based online grocery company had revived the concept, but with a modern flourish.

Picnic BV has a concept dubbed "Milkman 2.0” to deliver groceries using electric vehicles, focusing on less food waste and fewer food miles travelled. The company buys and delivers locally, with its vans going no faster that 50 kilometres per hour.

"Our aim is create a sustainable infrastructure for food delivery,” Joris Beckers, the company’s 53-year-old co-founder, said in a phone interview.

Founded in 2015, Picnic has unleashed a fleet of 1,000 electric vans on to the streets of the Netherlands and Germany and plans to add "hundreds more” by the end of 2020. The company says the delivery vehicle it has designed and produced is fully electric and "has no small particle emissions and prevents traffic due to its slim design”.

Wealthy backers

Backed by investors including the investment arm of the entrepreneurial Fentener van Vlissingen family, the company raised €250mil (RM1.14bil) in a new round of funding in November.

Other backers include De Hoge Dennen Capital, the De Rijke family and Hoyberg, the investment arm of the Hoyer family, which is a shareholder of Heineken NV.

"We are high growth, high risk, but in it for the long-term,” Beckers said.

The company will use the cash to continue its growth and build a "robotised fulfilment center” for online groceries in Utrecht, Holland. The center will aim to process around 150,000 orders every week, it says.

Building infrastructure

The grocery-delivery market is intensely competitive, and Picnic’s concept is not entirely original. In the UK, Ocado is among online supermarkets with no stores that delivers from its warehouses. In Germany, there’s Bringmeister.

Picnic says it has a 5% market share in the most mature cities in which it is active. The grocery market in the Netherlands totals €40bil (RM183.76bil) and in Germany it’s €175bil (RM803.97bil), according to the company.

This year was a record for Picnic, which added almost 300,000 new customers in the Netherlands and Germany. Picnic’s annual revenue currently stands at about €300mil (RM1.37bil), but the company has its sights set on bigger things.

A law graduate and a biking enthusiast, Beckers, who said at a Shop Talk Europe conference in 2017 that he "stumbled into the Internet world around about 1999, when Amazon was still a little bookstore”, doesn’t want Picnic to stop at groceries.

"Food is our entry point but we’re building an e-commerce infrastructure,” he said.

For instance, the company is operating a number of pilot projects with fashion retailers including Zalando SE to allow customers to send their returns back via Picnic.

"We are disrupting and significantly improving the e-commerce experience,” Beckers said. – Bloomberg

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