"We were looking for a technology partner who could combine an agile approach to delivery, a modern technology stack, and a deep understanding of trading and resolution mechanisms. NovaFori delivered on all three fronts."
Global Dairy Trade (GDT), a subsidiary of Fonterra Co-Operative Group, provides a reliable and transparent means for buying and selling dairy commodity products from around the world. Since its formation in 2008, GDT has developed into a truly global, multi-seller auction platform across a wide range of product groups. Today, Global Dairy Trade brings together over hundreds of buyers from more than 90 countries, with a range of sellers spanning Europe, USA, India, Australia and New Zealand.
GDT recognised an opportunity to complement its existing twice monthly trading events by creating a new online sales channel, which would enable 24/7*365 trading opportunities for dairy products. GDT approached NovaFori as they were looking for an unusual blend of enterprise-grade auction technology and trading model design capability.
Following the build of their auction platform, GDT has realised that buyers of GDT products have varying needs in terms of quantity, some requiring multiples of a full container, others only a fraction. They needed a data science module to ‘clear’ the market where possible, due to the perishable nature of dairy products.
GDT Marketplace has been built on Novafori's flagship auction and trading platform, which is a full-feature, configurable marketplace platform. The technology combines enterprise-grade performance and a host of flexible trading and resolution mechanisms, which maximise competitive tension and ensure marketplace efficiency through price discovery and matching buyers and sellers.
In addition, we designed and deployed a trade optimisation algorithm focused on market clearance. The algorithm distributes the auctioned product across participating bidders, minimising residual unsold product, satisfying as much demand as possible across all the bidders.
As a result, there was a significant increase in sales price for high demand products, compared to ‘fixed price’ products. Sellers also saw an increase in the rate of market clearance, critical to increase certainty and avoid wastage.
“The introduction of GDT Marketplace will expand the quantity of dairy traded online, offering flexible 24/7 access to a broad range of high quality ingredients and speciality dairy products. GDT Marketplace directly connects buyers and sellers and allows transactions of any dairy product, at any time“, said GDT Director Eric Hansen in announcing the new service.