Interview: OpenDairy to open up traditional dairy trade market

December 17, 2021

The traditional role of commerce is under pressure as digital opportunities offer greater convenience and lower costs. We have seen this in the B2C business where ecommerce has skyrocketed over the past decade. It is now time to bring this to B2B markets, starting in the dairy ingredients.

Online platform provides more value in the supply chain

OpenDairy to open up traditional dairy trade market

The traditional role of commerce is under pressure as digital opportunities offer greater convenience and lower costs. We have seen this in the B2C business where ecommerce has skyrocketed over the past decade. It is now time to bring this to B2B markets, starting in the dairy ingredients.

A typical digital start-up, that’s how OpenDairy appears. No suits with ties and dress shoes as we’re used to in traditional dairy trading, but white sneakers, jeans and casual shirts. This is how the three founders work on their innovative platform in Arnhem.


But there’s more behind these guys than just a hip idea. Two of them made their mark in the international dairy trade: both worked at Hoogwegt for over ten years, one of the largest companies in this sector.

From their loosely decorated office on the tenth floor of one of the office towers near Arnhems central station, they look down on the recently completed new office building of Hoogwegt. It seems very symbolic.

Henk de Weijer and Martijn Goedhart smile, to immediately emphasize that they still have a warm heart for the company where they enjoyed working for a long time and learned the dairy trade.

“After so many years of working for a boss, we wanted to build up something for ourselves. We left Hoogwegt on good terms”, De Weijer explains. Both men terminated their contract early 2020, knowing they weren’t allowed to trade dairy for a year because of the non-compete.

Thrown back

Their plan was to focus on trading non-dairy commodities at first, knowing that from April 2021 they could start trading dairy again. Needless to say that COVID changed all of this. The pandemic made starting a traditional trading company, where business relies heavily on your network and personal meetings, especially difficult. 

Instead of doing what they have done all these years, De Weijer and Goedhart decided to take a good look at the roles they have been playing as traders, to find out that there are many inefficiencies that technology can solve. The result is OpenDairy.

Hans Caspers starts up a big screen and a long list of dairy products appear. The digital entrepreneur has become a shareholder in the meantime and explains that we are looking at the MVP of the startup. The abbreviation stands for ‘minimal viable product’, a term frequently used to describe a first version offering the most added value for users.

That added value touches the essence of the traditional dairy trading industry: on OpenDairy’s platform buyers and sellers of dairy commodities can trade directly with each other. 

For instance: a dairy producer offers a certain volume of skimmed milk powder on the platform, including all specifications, the departure date and the price. Buyers, for example food producers that use milk powder in their products, can also place their product requirements on the platform. The volume they need, quality demands, origin, needed certificates and so on. And of course the price they are willing to pay.


OpenDairy’s software matches supply and demand and shows buyers and sellers which deals they can close. This all is done without the intervention of a trader. “This is the biggest added value of our platform”, Martijn Goedhart explains. “Traders are usually well educated people with a lot of industry knowledge and a large network; so they are expensive. By digitizing this traditional part of a trader’s role we realize large savings.” How large? “The dairy trader works with an average margin of three to four percent. OpenDairy handles this job for just one percent. Seller and buyer each pay half of this fee.”

Logistics and financing

So the digital platform facilitates the trade between buyer and seller, but there is more. In their quest to define what is or should be the role of traders, Goedhart and De Weijer noticed that there are always two other important aspects in trade: financing and logistics. De Weijer: “The dairy trader takes financial risk by paying the seller early and collecting the funds from the buyer. For this risk he charges a premium. But this role can be handled by parties like banks more efficiently, as they are specialised in financing. They finance the majority of the trade houses.”

Part of the OpenDairy platform is to let those specialised parties finance the trades. In the MVP version Rabobank is mentioned. "Rabobank International is our first partner for financing, we are very happy with that," says De Weijer.

Also when it comes to logistics, i.e. transporting the products and, for example, customs formalities, OpenDairy has partners that buyers and sellers can engage via the platform. "In this way, we allow specialised companies to offer their services directly. That too is more efficient and therefore cheaper, assuring that a greater share of the added value remains available in the dairy chain."

"We are convinced that our platform works better for bringing supply and demand together and for organising financing and logistics."

Milk price

According to the initiators, this means that more remains for the dairy company, for example. If that is a cooperative, such as a first user of the MVP, then OpenDairy can also contribute to a better milk price for the farmer. Apart from the lower trade margin the platform charges, its complete transparency can also contribute to this. 

Goedhart: "As a seller, you always hear from a traditional dairy trader that there is little demand for your product. And to buyers they say that there is little supply. With our platform you can see what is actually for sale and what is really in demand. The more parties use it, the more transparent the market becomes."

The expectation is that this will lead to a better price for dairy producers. "We have done a pilot with an auction system and the outcome was that a 15 to 20 percent higher yield price is possible," clarifies Hans Caspers.


Whether these high expectations will be fulfilled will become clear for the first time in 2022. Then OpenDairy will go live. "Our platform is free to use, you only pay when you close a deal," Goedhart emphasises the low threshold for testing the innovative system. 

It is an exciting step for the three entrepreneurs. They each invested part of their savings. In addition, there is an innovation loan from Rabobank and some so-called 'business angels' - wealthy individuals who are prepared to take high risks - have put money into it. "In total, a few hundreds of thousands euros have been invested so far. Our plans to expand the platform further, for example to offer CO2 compensation per transaction, naturally require further investment; this will be possible if we demonstrate in the coming period that this works in the dairy sector," says Caspers.

Because OpenDairy can be used worldwide for all dairy products (with the exception of liquid dairy), the total potential turnover is huge. "The international dairy trade is about 30 billion euros a year and dairy production is growing by an average of 2 percent a year," Goedhart indicates. "So there is room to earn a living with our model", adds De Weijer dryly.

It may also mean that the existing dairy trade will have to take a big hit. "That is true for the traditional role of the dairy trader," says Goedhart. "We are convinced that our platform works better for bringing supply and demand together and for organising financing and logistics. If that is the case, these aspects will become less important for the traditional trading houses. They will then have to focus on other things that add sufficient value."

One option could be for traders to establish closer ties with producers in order to offer a better and more reliable package. And they can do that through the OpenDairy platform, of course? "Yes, they are very welcome," smiles De Weijer.

The interview was originally published in Dutch industry magazine ZuivelZicht, written by Jeen Akkerman.

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