As members gathered last month for the annual meeting of the North American Millers’ Association, the remarkable transformation of flour milling, one of the most all-encompassing changes ever experienced by any American food industry, was evident in the program, in the many new faces of the NAMA staff; and, most of all, within the milling industry itself. Major companies that had been cornerstones of milling for decades were no longer present. Headlining the change was the departure of Cargill (the managing partner of Horizon Milling), ConAgra Foods and Cereal Food Processors from the roster of companies operating milling businesses. The new NAMA chairman will be Dan Dye, chief executive officer of Ardent Mills, the venture created by the May 2014 combination of the ConAgra Foods, Cargill and CHS milling assets. Together with other transactions completed during the past year, it is estimated that roughly half of U.S. milling capacity was involved in an ownership change since the last NAMA convention.
While all eyes understandably are turned toward Ardent Mills, the industry’s newly-created leader, it would be wrong to miss the remarkable transformation effected throughout the industry during a period of just a few years. In the time leading to the announcement of the merger creating Ardent Mills and in the months since the remainder of the milling industry has not stood idly by. Instead, milling companies large and small have made assertive moves to position themselves to thrive in the face of a rapidly changing customer and competitor environment. Anything but homogeneous in approach, changes undertaken by millers include mergers, milling partnerships, baking/pasta maker alliances and capacity updates/additions.
The actions of the nation’s third largest milling company, Grain Craft, include nearly all of the above steps over the course of several years. Owned by Milner Milling Inc. and Pendleton Flour Mills, the company operates one of the country’s newer flour mills, in Alabama, and grew dramatically with the acquisition of Cereal Food Processors Inc. Miller Milling Co., the
nation’s fourth largest milling company and still one of the newest, has grown by about 1,500% since the company was established with the opening of a single mill in Ohio in the 1980s. Most of the company’s growth (as measured in hundredweights) has occurred in the two years since Nisshin Flour Milling acquired the business. In addition to purchasing four mills formerly owned by ConAgra or Cargill in connection with the Ardent Mills transaction, Miller is in the midst of capital projects that will add almost a third to capacity of the company’s mills in California and Virginia.
Whether the first new mill in decades to be built by Star of the West or an acquisition of a second North Carolina mill by Bartlett, nearly all the top 20 U.S. milling companies have a story to tell of what they have done to be positioned for the new world of milling. In many cases, unprecedented investments have been made in multi-generational family businesses, which is properly seen as votes of confidence in milling’s future.
Importantly, these monumental changes in the ownership structure of milling have largely been from within. The companies operating milling companies in 2014 are led by managers who headed milling businesses before the flurry of activity. The same may be said about the ownership of milling, which has not become the sudden darling of private equity investors. The “new” milling industry should benefit from experienced hands looking to steer their businesses forward in an environment full of promise but with no shortage of challenges.
Many aspects of milling’s transformation were presented to the convention by the editor of this publication. That analysis appears on Page 17 of this issue. It was a — perhaps the — leading figure in milling’s transformation, Mr. Dye, who in an interview after the board meeting provided the surest assessment of the “new” flour milling industry. He said “companies of all sizes are growing, and people are investing and doing well,” adding, “It’s a great time, and NAMA is a great organization to bring together all those people and those pieces in one place.” That’s as close as any industry can come to a bright assessment of its future.