OpenDairy has launched an online marketplace to allow direct transactions between dairy buyers and sellers without the need for a trader. To facilitate a full-service experience to its platform users, the Netherlands-based start-up has integrated logistic and financing services, and a “matchmaking” service for dairy sector players.

In 2022 the company expects to reach a trading volume of 40,000 tons, mainly milk powders and butter.

Speaking to FoodIngredientsFirst, the company’s founders detail their vision to ensure a “transparent and seamless” trading process for all users involved. The idea to digitize the dairy trading business came from their experience as traders at Hoogwegt – one of the biggest companies in the European dairy sector – for a decade. 

“Our time spent working in the industry revealed a crucial need for transparency in each step of the trade process. The time for innovation is now and we know the only way to achieve this is through digitizing the entire process from start to finish,” says Henk de Weijer, co-founder and CEO.  

“We focus on the commodities cheese, butter, milk and whey powders. We know the dynamics of these markets the best and can therefore add value for buyers and sellers,” details Martijn Goedhart, co-founder and CEO.

“However, we are open for all types of cooperation. Maybe we will see liquid milk and cream on OpenDairy in the future, who knows. Our software is built in a way that adding products is very easy.”

E-commerce in the B2C arena has skyrocketed over the past decade. OpenDairy points to this as evidence of digital supply chain efficiencies that could be better integrated in the B2B space.The OpenDairy platform focuses on commodities such as cheese, butter, milk and whey powders.

Matchmaking dairy players
Buyers on the platform can submit their requirements and specifications and the platform’s smart system will match the right suppliers for each product. For instance, they can indicate the volume they need, quality demands, origin, required certificates and price they are willing to pay.

Sellers, on the other hand, are able to upload their offers for worldwide buyers to view and react to. As an example, a dairy producer might indicate they are offering a certain volume of skimmed milk powder on the platform, while including all product specifications, as well as departure date and price.

When asked about how OpenDairy actively scales its user base, Hans Caspers, co-founder and head of tech, tells FoodIngredientsFirst: “We leverage our own network, built up in many years of dairy trading. But we also inform prospects proactively about the benefits of using OpenDairy.”

“The most important aspect is to grow liquidity on the platform, meaning users will have a reason to visit often. We’re also working on some great value added features to make sure users have even more reasons to visit OpenDairy.”

Financing and logistics synergies
OpenDairy has partnered with leading financial and credit partners to ensure sellers are

paid quickly and buyers enjoy extended payment terms.

“We want to give the buyers and sellers as much information as possible, so they can make the right decision. For sellers that could mean price predictions or directives for forward offers,” says Caspers.

“Also we will allow sellers to offer based on an index-linked contract and have market makers provide fixed prices to the buyers. Other nice features include smart contracts and automatic currency hedging.”

OpenDairy collaborates with logistics and transportation experts to handle all transportation and documents that clients are able to deal with directly through the platform.

The platform’s centralized order management allows for simple processes, the company stresses.

“We believe in focusing on our core business and outsourcing non-core activities. Logistics is one of those services in the value chain. It’s essential to get the goods from point A to B. Our buyers expect a high level of service at competitive rates,” says Goedhart.

“Sellers don’t want to be bothered with the work. So our thought was, let’s partner up with first class forwarders to provide the best possible service.”Buyers on the platform are able to submit their requirements and specifications and the platform’s smart system will match the right suppliers for each product.

Keeping transparency
OpenDairy allows buyers and sellers to follow their orders in real-time for more accurate

logistics information and peace of mind.

Meanwhile, a two-way rating system also helps ensure transparency. Users of the platform can rate each other post-transaction and this information is made public.

“We also have big plans on sustainability,” adds Caspers. “The buyer should be able to choose not only the fastest or the cheapest, but also the ‘greenest’ transport option. This information is available and can be used.”

Goedhart also notes that the system is ready for expansion beyond Europe. “Sea freight is included and finance providers can finance buyers out of the EU as well.”

“We even want to offer last mile deliveries and customs clearance to provide even more value to buyers outside of the EU. On the supply side, we’re discussing the concept with producers in all main supply regions. And we aim to expand our sales team with overseas sales people as well.”