World Grain - May 2013 - 8

from the editor-in-chief

Ardent Mills speaks
to milling’s future

nnouncing the steps to create Ardent
Mills caused great surprise and even
shock from many executives across
the entire grain-based foods industry. Impressed by its size, its reach and even its
imagination, the project revealed by the three
founding companies — Cargill, ConAgra
Foods and CHS — means embarking on a
course that hails a new era not just for these
three leading businesses and American ﬂour
milling, but for all of grain-based foods.
That is especially the case in view of the
likely impact this may have on much of
global food processing. Yes, there has never
before been a merger within ﬂour milling of
this dimension, but the potential extends far
beyond to deﬁne important new parameters.
These may affect how production and
distribution efﬁciency will be measured
in the hugely essential business of making and providing the ingredients that
account for a, if not the, major part of
humankind’s sustenance.
Executives with even limited experience
in milling are aware how acquisitions and
mergers have radically altered the face of the
industry almost from the time the modern
milling industry arose in the late 19th century.
Fascinating describes the way a startling
array of inﬂuences together have prompted
what in the end is a high measure of ownership consolidation — shifts in global and
national wheat production, equipment inven-

Chairman
Charles Sosland
Publisher/Managing Director Mark Cornwell
Director of Advertising Sales
Dan Flavin
EDITORIAL STAFF
Editor-in-Chief
Editor
Managing Editor
World-Grain.com Editor
European Editor
China Consultant
Designer

Morton I. Sosland
Arvin Donley
Meyer Sosland
Susan Reidy
Chris Lyddon
Fengcheng Wang
Ryan Alcantara

tions and innovations that made milling the
ﬁrst successful modern industry more than a
century and a half ago, dramatic transformations in the retail distribution of ﬂour-based
foods, the dominance of commercial baked
foods in introducing consumers to products,
the huge weight of away-from-home eating
and the overwhelming force of government
as a powerful inﬂuence on milling’s structure
and development.
Yet, close examination of milling’s economics and business culture shows little or no
diminishment of the intense competition for
a marketplace that has driven the industry’s
history for decades.
That the proposal involving Ardent Mills
follows quickly on the heels of various transactions that soon will see major parts of what
once was the nation’s largest wholesale baking business, Hostess Brands, Inc., divided
among new owners, as well as baking giants,
is no surprise to observers of baking’s recent
truly amazing course.
Why, it may be asked, would not a milling
executive think wistfully of strengthening his
operating hand at the same time he is witnessing the carving up of a baking business that
once might have been a signiﬁcant potential
or real customer?
Spreading milling operations across the
entire country, as this newest milling merger
promises, may be ranked as one of the surest
ways of protecting market positions with bak-

ing plants that are being divided among a new
or different set of operators.
It is surely unwise, perhaps even ridiculous, to treat the transaction now
unfolding as anything other than of unprecedented scale. Nothing like it has occurred before. It would involve roughly a
third of U.S. daily ﬂour milling capacity,
which is a share never before attained in a
single dealing.
The proposed transaction aims to create
a business with 44 ﬂour mills operating
more than half a million hundredweights
of daily U.S. milling capacity. It would be
the very ﬁrst milling transaction establishing a company that would combine the
milling businesses of two of the three largest companies then operating. Large-scale
cost advantages may be likely under such
circumstances, even though U.S. milling
long has been recognized for its focus on
consistent cost savings.
Combined, the three companies as Ardent
Mills would be the largest U.S. ﬂour milling company by a hefty margin. From a historical perspective the Ardent daily capacity
would be more than four times the capacity
of General Mills at its 1960 peak, which
made it at that time the world’s largest milling company.
While several past transactions appeared
to be of huge long-term consequence, like
(Continued on page 10)

PUBLISHING STAFF
Vice-Chairman
L. Joshua Sosland
President and Publishing Director
Mark Sabo
Vice-President and
Chief Financial Officer
Melanie Hepperly
Audience Development Director
Don Keating
Director of On-line
Advertising and Promotions
Carrie Fluegge
Promotions Manager
Lon Davis
Director of e-Business
Jon Hall
Advertising Manager
Nora Wages
Advertising Materials
Coordinator
Debbie Maniez
Digital Systems Analyst
Marj Potts
Circulation Manager
Judith Arnone

WORLD GRAIN (ISSN 0745-8991) Volume 31, issue 5,
is published monthly by Sosland Publishing Co.,
4800 Main Street, Suite 100, Kansas City, MO 64112 U.S.
Periodicals postage paid at Kansas City, MO 64108 U.S. and
additional mailing offices. Canada Post International Publications
Mail (Canada Distribution) Sales Agreement Number 40612608.
Send returns (Canada) to Pitney Bowes International, P.O. Box
25542, London, ON, N6C 6B2. Printed in the USA.
POSTMASTER: Send address changes to WORLD GRAIN,
PO Box 324, Congers, NY 10920-0324. © Sosland Publishing
Co. All rights reserved. Reproduction of the whole or any
part of the contents without written permission is prohibited.
WORLD GRAIN assumes no responsibility for the validity of
claims in items reported. Sosland Publishing Co. is a division of
Sosland Companies. Inc.

Editorial and advertising inquiries should be directed to our
world headquarters at 4800 Main St., Suite 100,
Kansas City, Missouri 64112 U.S. Tel: 1-816-756-1000,
Fax: 1-816-756-0494 or E-mail worldgrain@sosland.com.
Requests for reprints of articles should be sent to
reprints@sosland.com or call 1-816-756-1000.

May 2013 / World Grain / www.World-Grain.com

http://www.World-Grain.com http://www.World-Grain.com

World Grain - May 2013

Table of Contents for the Digital Edition of World Grain - May 2013