How Halifax Startup Milk Moovement Is Delivering For 15% Of The U.S. Dairy Market
HALIFAX – Four years ago, a Memorial University grad working for The Dairy Farmers of Newfoundland and Labrador realized there were no good shared software solutions for the Canadian dairy market.
Understanding there was little technology assisting the industry’s supply chain that connected its partners together, Jon King pivoted to his own employer, who eventually became his first client.
This week, King and co-founder and CEO Rob Forsythe announced their company, Milk Moovement, closed on a $20 million USD Series A funding round. The raise was led by venture capital firm VMG Catalyst.
The new backing allows Milk Moovement to add to its already growing staff of 55 and further develop its cloud-based, dairy supply chain software.
“Half my month is usually on the road but it’s all fun stuff,” states Forsythe.
He grew up in Fredericton and also attended Memorial University in St. John’s, where he met King before forming the business. The day he spoke to Huddle he was on the road, working from Syracuse, N.Y.
While Milk Moovement’s initial focus was Canada, both he and King saw opportunity south of the border and both now spend much of their time expanding their services to dairy co-ops stateside.
The U.S. has become such a hub that Forsythe announced last April that Milk Moovement plans to open a new office based in Minneapolis, Minnesota, to further expand across the U.S., where demand for the company’s software continues to grow.
An industry slow to change
While many industries by 2018 had already experienced data revolutions in everything from manufacturing to logistics, the global dairy industry’s approach was antiquated by comparison.
While “disrupting” has become the operative word for smart tech infiltrating longstanding industries, Forsythe prefers to say Milk Moovement is helping a $600 billion (U.S.) industry realize its full potential.
“It’s not just dairy,” says Forsythe. “Agriculture, in general, is traditional, you have generally lower margins than maybe other high-tech industries.”
He feels the industry has taken longer to warm up to change when it comes to data and software but that’s starting to change. Fifteen percent of the U.S. dairy market now comes to Milk Moovement’s doorstep for software and data solutions.
King and Forsythe started Milk Moovement because they were tired of tracking pen-and-paper data through outdated legacy systems. Both realized there should be a better way to track the dairy supply chain.
Four years of rapid growth
It didn’t take long to learn that much of the industry suffered from similar problems: data getting lost, miscommunication, and an overall lack of accountability. Even still, the global dairy industry had yet to experience a major digital transformation.
“At first, we decided to just go kind of poke around and see what was going on,” shares Forsythe. “What we found was there was some software but they were more legacy systems that had been around for 20 to 30 years.”
Forsythe says after talking to a handful of dairy cooperatives in the U.S. he and King quickly saw they should focus their growth south of the border. It also seemed that U.S. dairy cooperatives were more willing to shake things up to achieve better results.
Interestingly, Milk Moovement’s journey has led both founders to learn a lot about Canada’s dairy industry and how it approaches similar tech as well.
“Our belief is that while we started in Canada, Canadians often need to see something proven out in the U.S.,” he says. “I think we’re just a little bit more of a risk-averse country when it comes to tech–and Americans are more willing to take a risk in hopes that it will pay off, and we certainly saw that.”
As Milk Moovement’s platform gained traction by bringing industry data into the cloud, it brought supply chain visibility for the dairy cooperatives that have invested.
It also helped to track and route shipments in real-time and optimized delivery pick-up and drop-off schedules, ultimately creating a significant decrease in food waste and lost profit.
Building trust in U.S. markets
California Dairies Inc., the second largest dairy cooperative in the U.S., was one early adopter. Forsythe uses it as an example of how every number in dairy matters, and perhaps why pen and paper were so relied upon in the first place.
Dairy farms get paid based on the quantity of milk shipped and Forsythe notes it comes down to every pound shipped, in addition to the milk’s quality (fat content per pound, protein levels).
“If you mess up 1,000 pounds, that’s 1,000 pounds of dairy a farmer doesn’t get paid [for] if you lose that in the system.
“I think pen and paper, and why people were so confident in it, was because they’ve been around for so long. It’s what they felt was the most accurate way of tracking,” he continued. “But then we’ve come in and pointed out that a lot gets lost with paper tickets and things like that.”
With so much potential lost in translation, California Dairies Inc. concluded a change was needed. According to Forsythe, the company now sees its entire supply chain differently.
“It’s way more dynamic. They can change things on the fly, whereas before they always had lagging data because it took some kind of paper to get it added into whatever system they were using.
“We had to build trust and say, ‘If you come off these kinds of paper systems, the data will actually be more accurate.’”
With success from those early adopters, Forsythe and King now see massive opportunities ahead solving similar issues in dairy supply chains.
The company has a network of 2,500 dairy farms, over 5,000 users, and now manages about 30 billion pounds of raw milk each year.
Over the past year, Milk Moovement also saw its annual recurring revenue grow more than 10 times. Since its inception, the company has realized a compound annual growth rate in its raw milk under management of 117 percent.
“We used to see ourselves as a software company like every software company does,” says Forsythe, “but we’ve realized that software is just one piece of it.”
Both Forsythe and King have come to realize what goes into their partnership with clients matters more, which perhaps gives them a guide to point their latest investment.
“They trust us to run their payrolls, they trust us to win all their transportation,” remarked Forsythe, “So, we need experts in each of those fields to make sure that the system we build actually solves their problems.”
Tyler Mclean is a Huddle reporter based in Fredericton. Send him your feedback and story ideas: [email protected].