Glen Herud is the founder of the Happy Cow Milk company, an entirely new way of doing dairy where the cows keep their young, the milking shed is mobile and the pasteurization is done on farm in a tiny shed that Glenn has made. Hard at it since 2006 Glen has faced technical, political and financial hurdles to get Happy Cow milk company launched and he’s now just on the cusp of concluding a successful crowdfunded investment round.
Vincent: So tell us about this fundraising round. You’re days away from concluding it, how much do you think you’ll raise?
Glen: Oh, we’ll think we’ll, we’ll get the minimum for sure. But we’ve always been funded by the crowd basically from 2018, via Patreon, and then we did a crowdfunding round in November 2019. We raised $400,000 and we built the prototype and the backend software, and now we’re doing another round to launch and start scaling across the country.
VH:Well, that’s exciting. Perhaps you could give us a summary of how the Happy Cow milk company works and why do you need the money? What have you built?
Glen: Well, basically, farmers are under a lot of stress all around the world. Essentially it comes down to the retailers having all the power and the milk processors having the power and the farmers are sort of at the bottom of the food chain. So they are really price takers and what that means is they are constantly trying to get more from less. This is where we see the intensification of all forms of agriculture and the flow on effects or environmental and animal welfare and things like that. So to really fix the animal welfare and the environmental problem, we actually have to give farmers more money and the real way to do that is to bypass the retailers. So we enable farmers to process milk on their farm and then sell it directly to their local community. And as a result, they get about 100-120% more for their milk.
VH: So you’re really decentralising the milk production system. You’re localising it right down to the farm and the local community. Can you explain how the technology works?
Glen: Sure. Well, pasteurization is an old technology, it’s 150 years old. It’s really heating milk. But it’s governed by a lot of regulations. So often the regulations are just too cumbersome for farmers to do it. So what we’ve done is created a system which only works one way and we’ve simplified the whole process. So farmers basically fill up these milk tanks. They put them inside our processing hub. It’s all connected to the internet. They push a button and our system takes over and basically stores all the relevant information in the cloud and steps them through corrections when things go wrong. So basically we provide regulatory compliance for those farmers. And then we match them to customers who have our milk dispensers. So the only way to get milk out of those milk tanks is through our dispenser. So it’s basically all happy cow milk is packaging free, basically.
VH: That’s awesome. And just to give our listeners a bit of a sense of how, how big are these mini factories that you are selling to farmers? By comparison, you see the big Fonterra processing plants and they’re massive factories that get put at the center of a geographical catchment area. But your factories are tiny, the size of a shipping container.
Glen: Well, even smaller than that. We call it a milk factory in a box. I think it’s maybe 3 meters long by 2 meters high, it literally is a box. And inside it we put our pasteurizer tank. So we started off with 60 liter tanks, we’re going to have 100 litre tanks and 200 litre tanks. We just need to reduce the cost of setting up a milk factory. I mean it’s a milk factory, but a person can’t fit inside it. So it’s a little bit unique of how we’ve interpreted the regulations, but we’ve built this full-proof system because we want lay people to be able to process milk. So it doesn’t matter whether you’re in India, Africa, the US or New Zealand. You can be a farmer who’s not completely clued up on milk processing but the system will take care of it and basically won’t let you do it wrong.
VH: The tanks that are inside this mini factory of yours, then get picked up and transported to a local cafe or a retailer, maybe even your own home and get connected up, right? So the same tanks that are used to do the pasteurization are the ones that appear in some sort of retail context, can you explain that?
Glen: So, the most costly part and the most risk around milk processing is when you’ve pasteurized and then you pump it through into a bottling machine or to fill some container. There’s huge costs and risks there. So what we’ve done is we’ve made each tank a pasteurizer, so the farmer fills it up with raw milk, seals it up, pushes the button, it pasteurizes and then they take the entire tank. So there’s no risk of them contaminating the milk. And then our app basically tells them which dispensers or outlets to take them to. So we’ll have schools, retailers, cafes, anyone who wants to sell milk will have a dispenser. And those tanks are monitored in real time. So we know the temperature, we know the volume, and we also know how much is used per day or the current usage. And we predict when the farmer needs to deliver. So the app is only telling farmers to deliver when they need to and they deliver in bulk. So if a cafe uses 300 liters a week, they would probably do one delivery a week, making it more efficient for the farmers as well.
VH: And the experience at the retail end is it’s like a vending machine, right? You have a temp that you can rock up to with a cup or a bottle, and you literally just fill your own.
Glen: Yeah, that’s right. We have the happy cow app. So anyone who wants to buy milk will have the app. It’s a bit like a lime scooter. You scan the barcode on the dispenser, the dispenser knows who you are. You push the button, it’ll dispense whatever milk you need. And then when you’ve done, you just push end and your account’s debited. And then the farmer gets their cap. The retailer gets their portion and we get a fee as well.
VH: What does the milk taste like Glen? Is it different in flavour profile depending on the farm and what the cows have been eating that day?
Glen: Oh yeah. The milk’s different, we don’t talk about it enough, no one really believes you because everyone says their product is the best, but genuinely people love it. And I don’t, I can’t really explain it. It’s just different.So, and a lot of people haven’t really tasted real milk because they buy standardised homogenized milk, which has really been deconstructed and then reconstituted. So cafes love it. Because it’s got a higher protein profile and it makes the milk froth better.
VH: Does technology mean that the cows have a more natural cycle, they keep their calves and your machine comes to them?
Glen: When we launched, we had a mobile cow shed, we milked them in the paddock. And the reason we did that is it meant that I could lease any land. I could lease a sheep farmer’s land or crop farmer’s land and milk from it, where with the typical cow shed, you’d have to build a million dollar piece of concrete to do that. So that’s why we did the mobile cow shed. It also enabled us to leave all our cows with the mothers, something that we didn’t really realise was a big deal. People picked up on it and it’s kind of become what we’re known for. So at the moment we don’t supply the milking equipment. We are just going to attach our processing hub to existing milking parlours, but in the future we’ll design smaller and more mobile units.
VH: So what’s been the uptake of this as an idea? I know you’re getting a lot of support from townies, like me who loved the idea of it. What’s been the reaction in the farming community? Have you actually got any operating and selling their milk at the moment?
Glen: We’ve got a list of farmers all around the world. I mean, we’ve got our farmer, Chris, who’s been waiting for about two years for us to get this together and we’re launching to the Waikato and Auckland in the new year. But we’ve got a lot of people who are watching. I think in New Zealand farmers get their backs up a little bit. They sort of think, here’s this guy, he says his cows are happy. He leaves calves with their mothers. And he’s sort of saying that we’re not good farmers or whatever. So we get all sorts of reactions. But around the world we’re just getting swamped by inquiries. I think there’s was one from Holland this morning. We’ve got people from Sweden, the UK. Australia is really big. I think our third farmer will probably be in the US, Southern California. So that’s the beauty of the system is that we can export these tanks and once you plug them into the internet, they plug it into our cloud. So it doesn’t matter where you are in the world. You can use our systems.
VH: It is an interesting twist on the whole dairy economy, which until recently has been a wholly New Zealand based experience and we shift out dairy products by ship, literally around the world. But here you actually have a dairy solution from New Zealand that’s effectively weightless. I mean, I suppose you’ve got to send the tanks but they’re really buying into almost a software as a service company rather than a dairy company.
Glen: Oh, exactly. It’s taken me a while to get to that conclusion but finally we figured it out and that’s why I say regulation is actually the product that we provide. And yeah, if you look at Xero or you look at Afterpay, which I saw sold for 40 billion or something, we want to do that same thing.
So what do farmers need around the world? They need the ability to process milk, they need the ability to then find customers and farmers are not very good at marketing and they don’t really like it. So we’re basically providing this end to end service a bit like Uber, crowd-based delivery people or crowd-based retailers and sort of a little bit of Airbnb, that sort of crowd economy. But we definitely want to be an international company that’s not exporting blocks of cheese from New Zealand but locals supplying locals. And I think it’s a different way of exporting.
VH: It certainly is, it’s a total mashup of software and dairy, our two largest emerging parts of the economy, in a delightful way. Glen, if any of our listeners want to buy some Happy Cow milk, where could they get it?
Glen: Oh, well, we’re on pledgeme.co.nz. I think we’ve got six days left and we’d love to have some new shareholders on board. We’ve got 460 this latest round and we had 500 beforehand. Or just google Happy Cow.
VH:And what about having a sip of Happy Cow milk? Can we try the product anywhere around the country?
Glen: Well we’re still waiting on MPI approval, so that’s going to happen at the end of August or early September. So until then we can’t sell any milk.
VH: Well, good things take time. So well done Glen and we wish you all the best.
Glen: Yeah. Thank you. I appreciate the time.
This is an edited version of a fuller interview. Listen to the full interview here!