Strong whole wheat flour production in 2009-10 breaks two-year lull
BakingBusiness.com, July 22, 2010
by L. Joshua Sosland

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WASHINGTON — Production of whole wheat flour in 2009-10 reached an estimated 18,597,000 cwts, up 2,317,000 cwts, or 12%, from a revised 16,280,000 cwts in 2008-09 (years ended May 31). The jump in 2009-10 marks a renewal of rapid growth for U.S. whole wheat flour production following two lackluster years in 2007-08 and 2008-09.

This estimate is based on data gathered from 23 flour milling companies with a combined daily capacity of 1,483,000 cwts, or 92%, of total U.S. flour milling capacity, according to the 2010 Grain & Milling Annual published by Sosland Publishing Co.

The year-to-year increase of 2,317,000 cwts was more than five times greater than the gain of 433,400 cwts in 2008-09 from the year before and was considerably larger than 513,000 cwts in 2007-08. The past year’s increase was nearly as great as the jumps of 2,651,000 cwts in 2006-07 and 2,813,000 in 2005-06, the latter attributed to heightened emphasis on whole grains in the Dietary Guidelines for Americans 2005.

Of the 23 companies providing data to Milling & Baking News on a confidential basis, only three produced less whole wheat flour in 2009-10 than the year before. In the prior two years, nearly as many companies milled less whole wheat flour as produced more.

The largest year-to-year increase for a company was 626,551 cwts, and the largest decrease was 115,752 cwts. Overall, the average change in 2009-10 was a 95,693-cwt increase (versus 28,352 the year before) and the median change was a 35,522-cwt increase (versus a zero change the year before).

On a percentage basis, the average company change was a 28% increase and the median change was a 22% increase. Eight companies had increases of at least 25%. Among companies milling at least 100,000 cwts of whole wheat flour, the largest percentage increase was 34% (two companies) and the largest reduction was 13%.

At an estimated 18,597,000 cwts, production of whole wheat flour in 2009-10 accounted for 4.5% of total U.S. flour production in the past year (based on four most recent reported quarters — April 2009-March 2010), up from the 3.9% share in 2008-09 and 2007-08 and 3.8% in 2006-07.

Because total flour production in this same period was up a modest 339,000 cwts, whole wheat flour accounted for all of the growth in wheat flour production in 2009-10. Absent the increase in whole wheat flour, total U.S. flour production in 2009-10 would have been down 1,978,000 cwts.

Excluding semolina and durum flour output, the increase in whole wheat flour production was even more impressive in 2009-10 on a percentage basis. At 17,624,000 cwts, whole wheat flour production, ex-semolina, was up 2,250,000 cwts, or 15%, from 15,374,000 cwts in 2008-09.

The ex-semolina figure was based on data from milling companies accounting for 95% of U.S. wheat flour production. Excluding semolina, whole wheat flour production equated to 4.6% of U.S. flour production, up from 4% in 2008-09.

Production of whole wheat semolina in 2009-10 was estimated at 973,200 cwts, up 67,100 cwts, or 7%, from 906,100 cwts in 2008-09. The semolina figure was based on data from milling companies accounting for 64% of total U.S. durum milling capacity. Whole wheat accounted for 3.1% of total semolina production in 2009-10, up from 2.9%.

The strength in the whole wheat flour data generated upbeat, even confident observations from grain-based foods executives.

“Interest in whole grains continues to be strong,” said Paul Maass, president and general manager of ConAgra Mills, Omaha. “Our consumer insights team data show 62% of U.S. households now consume whole grain products on a regular basis.”

Through a number of products, ConAgra Milling has aggressively pursued the whole wheat market in recent years, and Mr. Maass has been an outspoken advocate for the promotion of whole wheat flour.

“There continues to be a growing interest in the impact of nutrition on health and wellness,” he said. “If you back up and think of, say the Atkins diet, one of the challenges they had was that there were all these opposing views. Some doctors would say it’s great, and then there was another camp that said it was doing terrible things to your body. But there is universal agreement on the fact that whole wheat flour is healthy and that it’s better for you to consume more whole grains. I think the growth will continue and that whole grains can help grow overall per capita flour consumption, and that’s great for all grain-based foods.”

Growth for whole wheat products has been far more pronounced in the supermarket sector than in food service, Mr. Maass said.

“It’s been in products like bread, pasta and crackers,” he said. “Whole grain tortilla growth has been phenomenal. School food service has quickly adopted whole grains. The commercial food service channel has an opportunity to go down the same path, but they are way behind. When you go to a restaurant, do you have a choice between whole wheat and enriched? At the supermarket you have tremendous choice, and consumer spending for whole grain now exceeds $10 billion in retail sales.”

Commenting on the swings in production between companies, Mr. Maass said price competition is always a factor, but other influences were at play, too.

“The 2009 hard winter crop had very low protein content,” he said. “Customers using hard winter for whole grain didn’t have the dough strength, and many had to shift to spring wheat and to mills better positioned to meet their production needs.”

Commenting on the resumption in growth from the two years before, another miller said the impact of the weak economy during the slow years should not be understated.

“Whole wheat flour is more expensive than white flour,” the miller said. “That’s partly because the supply chain is less mature, so more bakers are buying whole wheat flour in bags rather than bulk. There are also more costs with ingredient systems, with functional and sensory issues.

“Now, even if the economy hasn’t fully recovered, panic has subsided. And there is growing awareness of nutrition along the margins.”

Bakers affirmed better trends in demand for whole grains.

Allen Shiver, president of Flowers Foods, Inc., Thomasville, Ga., credited stepped-up innovation as a key factor.

“Flowers Foods has seen above average unit sales growth in Nature’s Own varieties with 50% or more whole wheat content in 2009 and so far in 2010,” Mr. Shiver said. “We attribute this to the overall growth of the Nature’s Own brand as well as to the eight new breads, buns, and sandwich rounds we

introduced during this period, which have a high whole wheat content. We believe whole wheat baked foods will perform well in the future as consumers better understand the health benefits of whole wheat and embrace its distinctive and heartier taste.”

Asked about the diminished growth the previous two years and the re-acceleration in 2009-10, another baking executive said the trend did not match well with the company’s experience. Heather L. Collins, director of marketing, Sara Lee Fresh, Downers Grove, Ill., said sales of whole wheat bread and buns have been strong each of the past three years.

The strength has been in marked contrast with sales of enriched flour baked foods, which have not performed as well, Ms. Collins said.

Additionally, trends for whole grains remain positive looking forward. Perhaps the strongest growth in whole grains at Sara Lee has been from the buns category, she said.

“Consumers are moving from white buns to wheat buns,” she said.

Sara Lee’s optimism about whole grains stems in large part from consumer research focused on young mothers, a group that is among the heaviest buyers of baked foods. When asked why they were shifting to whole grains, mothers were no longer citing only nutritional information from sources such as the popular media.

“They are also hearing about it from their kids, who are coming home from schools and telling their parents about whole grains,” Ms. Collins said. “Mothers are getting the message 360.”

Mothers also increasingly are resisting the idea they will be able to shift their children to whole wheat bread from white bread over time.

“We’re hearing mothers say, ‘I’m not starting my kids on white bread,’ because they don’t want a problem transitioning,” she said.

Between children coming home and encouraging their parents to buy whole grains and the increasingly central place for whole grains in the Dietary Guidelines for Americans, Ms. Collins said Sara Lee has reason to believe its faith in whole grains is not misplaced.

“One of the big pieces for us is to see bun sales moving from traditional white flour to whole grains,” she said. “It’s very telling. Traditionally, when you’re eating a hot dog or hamburger, you are not so conscientious about what you putting on it or the bun that holds it. That’s not the case now. Whatever they’re eating, we’re seeing consumers want to get their whole grains.”

According to Sara Lee, whole wheat flour’s share of the company’s total flour purchases for its fresh baked foods division rose 3.9 percentage points between fiscal 2007 and fiscal 2010, including a 1.4 point gain in fiscal 2008, a 0.5-point gain in fiscal 2009 and a 2-point gain in fiscal 2010.


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