“We had run into Orbis in some of the plants and companies that use our software. It became evident that it really addresses what I would say is one of the more complex components of traceability in the dairy supply chain,” Scott Sexton, chairman and CEO of Dairy.com, told AFN. “Orbis connects to the equipment layer or the automation layer of a plant and provides real-time tracking of the movement of products from intake at the scale or meter at the plant all the way to the end pallet of product that is produced.”
The acquisition will enhance Dairy.com’s ability to provide its target customers, mainly manufacturing facilities, with end-to-end supply chain digitization. The purchase was in the works before the pandemic popped up, which created a few hiccups around the timing of the deal.
Another recent livestock tech company was acquired recently. Find out more here.
Dairy.com was formed in December 2000 by eight of the largest dairy companies in the US during the dot com boom, says Sexton. Originally operating as a trading exchange for dairy commodities, over the past two decades it has expanded into a supply chain management platform.
“When milk comes off a dairy farm, it is a perishable commodity with multiple components. It’s very similar to oil and gas. It comes into dairy facilities like refineries that want certain components in the milk stream,” Sexton explains. “Chobani wants protein to make high protein yogurt, for example. The fat and butterfat go to make ice cream or butter. It’s separated and traded from plant to plant. It makes for a perishable, highly-fragmented, complex, heavily-regulated supply chain.”
Dairy.com’s platform sits underneath this system, he adds, providing a complement to ERP systems instead of competing with them. While Dairy.com manages the flow of products from farm to plant, Orbis adds the last bridge of traceability in keeping tabs on where all of those different dairy components are going within the plant.
Founded in 1998, Orbis also offers its services to the brewers and distillers industry, which shares some commonalities with dairy production in terms of the many different components that are flowing through a manufacturing facility. Its primary objective has been to help its customers achieve a zero loss manufacturing goal.
Dairy.com is no stranger to adopting innovation, innovating solutions to move the industry forward since the early 2000s, according to Sexton. It focused on in-house innovation up until 2013 when it shifted its strategy to acquiring companies that facilitated its status as the digital backbone of dairy.
“We became the logical aggregator of tech service providers for the dairy industry. We have been connecting a lot of these modules together in a way that makes us a unique end-to-end platform that complements ERP. It’s very much been a hybrid approach of M&A.”
Some of its other acquisitions include My Dairy Dashboard in May 2020 and Data Specialists in August 2018.
The road was not without its challenges, however. Surviving the dot come rush was the first hurdle the company had to overcome followed by navigating the complexities of acquiring and aggregating a number of companies under one roof. With each acquisition, Dairy.com has incorporated the leadership of the organizations, retaining key leaders from each.
“Many times we continue to invest in a brand but it’s challenging to incorporate varying underlying software footprints. We migrate when we need to.”
When it comes to tech adoption in the dairy industry more broadly, Sexton has seen decent momentum but believes there is room to improve. When milk loads are picked up in the US, drivers still typically handwrite information about the pickup, he explains. This led the company to develop a Mobile Manifest app that automates data collection and geolocates the movement of loads. They’ve seen rapid adoption of the service, according to him.
Some of the keys to encouraging adoption are providing manufacturing facilities with turnkey solutions at an affordable price point. This has been one of the biggest drivers of Dairy.com’s eagerness to acquire other companies. It’s easier to convince a customer to adopt a new technology when it gets several value propositions for one manageable price in lieu of having to pay several service providers for various services.
“The industry is probably five years behind as far as when it should have happened. Some of that is it’s just hard to get more mature industries to drive adoption of software but it’s more critical than ever,” he says. “Visibility, transparency, and knowledge of where food comes from and whether it is responsibly produced are becoming increasingly important information for food companies to know.”