When The Numilk Company launched its first fresh plant-based milk dispenser kiosks in Whole Foods stores in 2018, its founders envisioned a grocery-focused business modeled around the popularity of in-store nut butter grinders and citrus juice squeezers. Over the past two years, however, the company has quietly moved away from that original strategy to focus on developing technology for foodservice applications and now is preparing to scale its footprint and launch at-home devices capable of making nearly any non-dairy milk product consumers desire.
Numilk’s original machines were large kiosks that mixed almond and oat milk on demand, allowing consumers to customize their sweetness levels inside the grocery store. But the company’s strategy was thrown into crisis mode when the pandemic began in March 2020, prompting a pivot towards a volume-based appliance that uses pouches.
While it still operates 10 kiosks around the country, Numilk’s current strategy is to grow big by downsizing its product. The company manufactures a countertop machine available for food service accounts which use ingredient pouches to make fresh plant-based milk and cold lattes on demand. The professional grade machines sell for $699, while pouches cost $4-$6 each. The company has also opened a waitlist for a consumer grade at-home appliance which will sell for $249.
“[The countertop machine] has a real value proposition,” said NuMilk co-founder and CEO Ari Tolwin. “We enable fresh, we save them space, we reduce their waste, and we’re often less expensive than their pre-pack. Our average candidate customer reduces their trash by 1,200 pounds per year – and by the way, in New York City they pay for that trash by the pound – and they reduce their CO2 emissions throughout the supply chain by seven times. And then as far as the machine itself goes, it is extremely simple and fast to use. It’s pretty seamless and enjoyable for the barista.”
When its ingredients are squeezed by the machine and mixed with water, each pouches produces 32 ounces of fresh plant-based milk. Tolwin said the pouches were designed to work exclusively with the machine and even if squeezed by hand would only produce a “sticky mess.”
The new format, Tolwin said, has made innovation simpler and allowed the company to introduce a significantly expanded flavor selection, including original and unsweetened Almond and Cashew milks and original Oat, Black Sesame, Pistachio and Hemp milks, as well as seasonal flavors and functional offerings (Goldenmilk and Moonmilk). The company has also introduced lattes (Cold Brew Caffe, Mushroom, and Ceremonial Matcha) and protein shakes (Chocolate, Vanilla Bean and Cold Brew Coffee) designed for 16 oz. servings.
According to Tolwin, Numilk’s countertop appliances are now available in about 100 coffee shops around North Carolina (where its manufacturing is based), Washington, D.C. and the New York metro area, including some Blue Bottle Coffee locations. With more stores set to open up this year, Tolwin said the company raised a new round of unspecified financing in December 2021 and is now using 2022 as prep time ahead of a broader scaling initiative in 2023.
But getting to this point was no easy feat, Tolwin said. Numilk made the decision to pivot in a period of uncertainty around the virus, when consumers were still being advised by medical professionals to wipe down their groceries. In March 2020, Health departments across the country shut down “high touch” machines in an effort to stamp down spread of the virus, devastating Numilk’s revenues. Tolwin said the brand was able to work with Whole Foods to bottle fresh plant milk every morning in order to keep some cash flow coming in, but he knew the brand would need to pivot in order to compete in the post-COVID marketplace, leading the team to focus on cafe and at-home opportunities.
“When you think about Starbucks, [it] defined what we now call the ‘third space,’ right? It’s not home, it’s not work, it’s a new space – the community space,” he said. “We thought that the cafe business would actually grow stronger at the expense of offices, so we focused on cafes, and homes, and then we had to set about making the right piece of equipment to serve those channels. And so that’s where our countertop machine was born.”
Prior to this, Numilk had outsourced the design and manufacturing of its kiosks, but the shift to a countertop business model also brought production in-house. Tolwin said he was concerned that the pandemic could lead to longer wait times and poorer product quality, so the company quickly hired its own team of engineers to develop a new machine it could begin selling before the end of the year.
As well, Numilk avoided raising more money to support the new initiative and instead relied on its existing funds while minimizing expenses until the countertop machines were in the market.
“We got rid of the office, we got rid of anything that wasn’t nailed down, anything that wasn’t directly related to designing the prototype machine,” he said.
While the countertop appliances use the same core concepts as the kiosks, “very little of the technology transferred over,” he noted. Despite the numerous challenges facing the company, Numilk’s engineering team was able to complete a physical prototype by the summer and the first machine was sold to a Raleigh, North Carolina coffee shop in August 2020.
As it eyes a wider presence for its tech at cafes, Numilk is also preparing for the launch of its at-home machines in the near future. Currently, Tolwin said a waitlist is open via the brand’s website and the company is anticipating the first production run will be sold out when it launches later this year. The company is looking to expand its team “on the business side” (much of the 17-person staff is in engineering) to support the projected growth and is continuing to explore additional innovations that may be more suitable for home use.
“At home, the new machine opens up many more options for consumers,” he said. “Whether it’s for an ice cream base, whether it’s a protein shake, whether it’s additional latte SKUs, milks that are specific diet or allergen friendly – it really offers so much more. The possibilities are sort of endless.”