Cargill exec cites significant marketplace changes
March 6, 2013
by Josh Sosland
WAYZATA, MINN. — While flour milling certainly may be characterized as a mature industry, significant changes in consumer tastes and customer requirements have altered what will be needed for milling companies to thrive in the years ahead, said K. Scott Portnoy, corporate vice-president of Cargill.
Mr. Portnoy, who has been with Cargill for more than 35 years, is a platform leader for the company's Food Ingredients & Systems business units. He spoke to Milling & Baking News after the announcement that Cargill, together with CHS, Inc. and ConAgra Foods, Inc. had agreed to combine their flour milling businesses into a new business to be named Ardent Mills.
The decision to create Ardent may be viewed as an affirmation of the success of Horizon Milling, created in 2002, Mr. Portnoy said.
“Horizon Milling has been very successful, both financially and in terms of how we serve our customer base,” Mr. Portnoy said. “It is a very successful entity. That gave us a lot of confidence that if we could create this successful marriage between Cargill and CHS and improve the business for ourselves and customers, that we could do the same thing again as the model to use going forward with Ardent.”
Adding ConAgra Mills to the mix is not bringing in a stranger to either CHS or Cargill, Mr. Portnoy said.
“ConAgra Foods is a very important ingredient customer for other parts of the food ingredient businesses within Cargill,” he said. “We’ve had a long and good relationship with ConAgra as a supplier.”
For all of the companies involved, the decision to create Ardent reflects some plain realities of the flour milling industry, Mr. Portnoy said.
“It is so important in an industry like this when flour consumption overall is declining slightly to be in a position to be able to help customers with their growth challenges — baking, food service and ingredients,” he said. “To do that, you need to find niches where you can create value, above and beyond the normal flour miller, to provide bakery solutions.
“Over time, to have a sustainable business model, you have to be attuned to your customer growth challenges and product innovation challenges. We think this combination marries up two very strong industry players, but marries them up to create hybrid vigor from a research and development and product development perspective. ConAgra, with their consumer foods business, brings unique consumer insights to Ardent. Horizon brings important and unique insights from an origination point of view. By marrying them up, we will provide our customer base with a much more vigorous set of opportunities going forward. We will be able to be even more responsive from a customer perspective. There have been so many changes in consumer tastes and customer requirements. To have the best of both worlds is very important.”
A longer version of this interview will be published in an upcoming issue of Milling & Baking News.