Homogeneity of powder blends is an important metric for industrial applications in fortified dairy foods including commercial pediatric nutrition products. Product development practices evaluating physical properties and nutrient stability performance are reliant on blending parameters that deliver a uniform powder at both the pilot and commercial scale. Quantities of individual micronutrients in finished products are particularly critical for formulated infant foods. The two preliminary phases of this study focused on developing a simple, efficient method, specifically for a pilot scale ribbon blender, in which maximum homogeneity in fortified dairy-based powder blends could be reached. In phase one, a red iron oxide pigment powder was mixed throughout a white dairy powder and color homogeneity was measured by comparing L*a*b* color values from powder samples extracted from different areas of the ribbon blender. For phase two, sixteen similar fortified dairy blends were produced with varying ribbon blade shaft rpm, fill level, and blending durations according to a response surface method (RSM). The level of homogeneity of ferrous sulfate in the dairy blend was measured in these fortified mixtures to determine optimal blender parameters. After operating parameters were determined for uniform blending, phase three was enacted using these parameters. A comparison study of nutrient stability in fortified model non-agglomerated powder infant formula (PIF) and agglomerated whey protein concentrate (WPC) powder blends was executed to evaluate the degradative effect of microencapsulated ferrous sulfate (MFS) vs. unencapsulated ferrous sulfate (UFS) in these fortified dairy blends. The nutrient degradation rates of vitamins A, E and C in both PIF and WPC base powder, fortified with either MFS or UFS, were determined and compared during an accelerated eight-week stability study. Using p = 0.05, no statistically significant differences in vitamin degradation rates were observed when comparing independent spray-dried dairy-based blends containing unencapsulated or microencapsulated ferrous sulfate (using an encapsulating composition of 60% stearic acid) during eight weeks of accelerated shelf-life storage conditions (37 °C with a 75% relative humidity, RH). Of note, the degradation rates of vitamins A and E in blends containing PIF and UFS were more rapid than the control and suggestively significantly different (p = 0.07).