Woolies in sheep’s clothing: Why the new Milkrun is just startup cosplay

On Thursday, an early morning Instagram post heralded the return of Milkrun. Less than two months after it was dissolved, Woolworths had resurrected the startup’s name, wrapping its blue and white branding neatly around its own fast delivery product — Metro60.

The headlines, including ours, reported that Milkrun was back from the dead. But when it comes to what is actually left of the company, it’s akin to an empty paper bag with the name printed on it.

When Milkrun first launched in 2021, it was the textbook definition of a disruptor. Groceries delivered in ten minutes for just $2.99 (or free for orders over $30) was a wild concept.

If that wasn’t enough to impress, the startup also shunned business models that were built on the uninsured backs of gig economy workers. Milkrun’s staff were salaried.

This retail utopia seemed impossible without some kind of dark pact with an Eldritch god. As it turned out, it just required a lot of money.

Within months of opening its doors, Milkrun landed $88 million in venture capital funding. But it didn’t last long. Redundancies were made and the business had to up its delivery times, though they were still competitive.

Then back in February, the company finally admitted defeat.

Why Woolworths would want Milkrun

As expert analysts have noted, Milkrun’s maths never added up. The 10-minutes-or-less business model combined with salaried employees and strong Australian labour laws meant the business was burning cash at an alarming rate.

Still, the brand was strong and beloved — not just by the startup community but those living in the inner city suburbs that could take advantage of the service.

Lightning-fast groceries, cheap delivery, and an ethical employment structure was an easy sell — especially when you weaved in a cheeky brand identity that didn’t mind ruffling a few feathers.

With this in mind, it’s not particularly surprising that Woolworths would want to scoop up the name and staple it to its own competitor product.

While Metro60 was already established and delivered to more areas than Milkrun, it didn’t have that same sexy brand identity. It was just Woolworths under 60 minutes.

Milkrun meant something to people, and that was clearly worth buying.

While Woolworths has declined to comment on how much it paid for the brand, the rumour mill has it sitting at $10 million.

As the ‘The Branding Lawyer’ Emma Berry pointed out in a LinkedIn post, this bought it the name and trademarks, logo, customer list, operating entity and social media accounts.

In other words, all the tools to cosplay as an edgy startup with a loyal fanbase, but with the grocery conglomerate cash to actually make it work.

But what is ‘it’ exactly now?

Milkrun in name only

While customers and fans celebrate the seeming return of Milkrun, it’s worth asking what’s actually left.

In its original form, the business offered $2.99 (or free) delivery in 10 minutes or less with the assurance that your dollars weren’t helping perpetuate the often-problematic world of gig economy employment.

Comparatively, ‘Milkrun Powered By Metro’ offers a $4.99 flat rate, but it does deliver to more cities and suburbs. It’s been able to scale this way because of its Woolworths roots as well as long times (60 minutes or less, but with an average of 33 minutes) and utilising the Uber network for delivery.

Regardless of your own personal feelings about rideshare companies, salaried employees were at the heart of the Milkrun business. From the outside looking in, it was both its north star and its downfall. While Milkrun did fail, you had to respect its commitment to this particular aspect of its business model.

If this was something that Woolworths believed in, there were other chances to demonstrate this. It has its own grocery retail investor arm, W23. And it never invested in Milkrun. Similarly, Woolworths itself didn’t try that hard to compete with ‘instant’ grocery deliveries.

And it didn’t have to.

As we said earlier, plenty of people saw early on that Milkrun would struggle to survive, particularly after lockdowns ended and more people were popping into the shops again.

All it had to do was wait in the rafters as the brand built a following as a disruptor and ultimately burnt itself out with good intentions. It could then pick at the carcass for the best bits, apply it to an existing product and attract those fans back under the guise of being different.

This is the power of branding — and Woolworths clearly knows this. It even hired someone that was made redundant from Milkrun to work on the relaunch campaign. And it was met with applause and excitement. Overall, it was a clever play.

The real question lies in what it will do with the brand moving forward, especially when so little of the original business that people loved still exists.

It has already been rolled out as a new Metro60 app and has been firmly integrated into the extended Woolworths universe with a promotion in the Everyday Rewards app.

Can a giant and heavily sanitised retail chain keep the last tatters of the brand — its attitude — alive?

It is hard to say, but we very much doubt Woolworths will be green-lighting any ads to deliver ten-minute ‘bags’ to Bondi anytime soon.