Inglenook Dairy's new Milkstream machine offers cafes milk on tap from a tiers of 10-litre bladders below the counter in a bold move to cut plastic carton waste.

Being a small producer in dairy industry, particularly up against supermarket giants, gave Inglenook Dairy greater flexibility to adjust and set its own path, owner Troy Peterken said.

"We are passionate about not putting plastic in the environment, especially when we look at the tonnage we want to try and remove. We're passionate about being market leaders on this," Mr Peterken said.

"We want this to be the next paper straw trend. We want people to go into cafes and ask whether they use Milkstream and if not to demand why."

Mr Peterken never originally planned as a dairy owner to take on reforming packaging. Watching semi-trailer loads of plastic bottles going in and out of the dairy every day got him thinking about the far-reaching ripple effects the business was making in waste contribution.

Inglenook Dairy looked at glass, which only made up two per cent of the business' sales. The dairy's biggest market by far is cafes, making up 70 per cent of consumption and so becoming the focus.

Milkstream is a project that has been six years in the making for Inglenook Dairy. In packaging alone, Inglenook Dairy estimates it can slash three-tones of two-litre plastic bottles down to about 750-800 kilograms of bladders in 12 months.

Mr Peterken said Inglenook Dairy was also refining processes in an ambitious move to be a zero-waste dairy in the next five years. Plans are in the pipeline for Inglenook Dairy to recycle the milk bladders back to their original purpose.

"Our main thought came from when we saw how much plastic we were bringing in. We thought we could make a real difference quickly," Mr Peterken said.

"Once we started to get involved in this, you could see possible effects for cafes in reducing waste, saving on collection and instead investing that money back into the business. You could see how it might take the pressure off councils in how they manage recycling with less skips to collect."

Golden Point-based cafe Drive is the first to install Milkstream, launching the machine earlier this week. This has equated to 32 bladders instead of 160 cartons of full-cream milk. The cafe has gone from needing three waste skips down to two for a week and is on the way to needing less than one.

While milk is costing the cafe about the same amount, Drive manager Jarrah Staley said the cost saving comes in rubbish removal.

Mr Staley said the system also improved in-store efficiencies. Each refrigerated machine held about 40 to 50 litres of milk in bladders, needing only a quick change to hook up a new bladder when the one above ran empty. Baristas can get through the day without running into the main fridge to grab another bladder, like they can do with two-litre milk cartons.

Milkstream could be retrofitted to standard cafe fridges and would include a font, used to dispense the milk from the bladders below.

While Inglenook Dairy has been testing the machine on their premises for at least six months, Mr Peterken said using Milkstream in a high-pressure cafe environment with a constant rush of customers was the ultimate test.

Inglenook Dairy had sold five units to other cafes in Ballarat when Mr Peterken met with The Courier - but he said his phone had not stopped ringing with interested cafe owners.

Inglenook Dairy has built a loyal customer base across the region since launching as a brand in 2011.

Mr Peterken and his wife Rachael founded the business to process her parents' milk on property the family had been dairying on for more than a century.

The dairy is also working to expand its product to butter in the next 12 months. It already offers Greek pot-set yoghurt.

Inglenook Dairy milk is now available in about 30 Woolworths stores throughout Bendigo and Ballarat and west of Melbourne, as well as in independent stores across the region and down the Surf Coast.

Mr Peterken said there was a rising consumer demand for more responsibly-sourced, environmentally-friendly and high quality product.

Milkstream, he hoped, was a way of disrupting the dairy industry for good and proving what could be possible from a community, family-run business in the Ballarat region.

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