World Grain - December 2014 - 6

FROM THE EDITOR-IN-CHIEF

Food service leads
internationalization
henever internationalization of
grain-based foods is being analyzed
in order to gain insights from a different viewpoint into the future of the industry, the inclination for a long time has been to
focus on grain supply and demand. Depending on whether a country or a region was

would be the criteria usually cited as the
main, if not the sole, determinant of how the
industry that made the ultimate food products unfolded. Indeed, the state of the domestic baking business more often than not
related to the supply of wheat, either grown
domestically or even imported through regular channels of trade.
Even as international trade in wheat and
other grains has expanded due to production
and population gains as well as the reduction
and elimination of trade barriers, this grain
factor has taken a backseat to developments at
the very far end of the industry. That relatively new force is the way in which the outreach
of retail food operators, mainly quick service
restaurants, has radically changed the grainbased foods industries in many countries eager to keep in line with what are new markets.
Without doubt, much of this activity had
its origin many years ago in the international expansion of McDonald's Corp. It was
McDonald's, which now has 35,000 units
around the world, that initially went so far
as to encourage bun suppliers in the United
States to build bakeries in other countries to
supply the fast food chain. For a considerable time, McDonald's occupied a unique
position in striving to establish an international enterprise rivaling what it has established in America. But once its competitors
also encountered an American market that
focus began to shift to trying to build new
customers, mainly in Europe and Asia. Each
of these efforts introduces new forces into
how grain-based foods operates, prompting
changes that affect immediate suppliers like
even to the sort of wheat wanted to produce

Like much else that has happened in the
recent internationalization of grain-based
foods, the process might have begun with
U.S.-based companies, but has quickly
drawn participation from many different
countries. Hardly anything symbolizes that
better than the purchase of a retail chain
known for its bagels by a European group
well respected for its investment acumen.
a spokesman for the acquirer commented,
also citing the numerous brands bought that
could be used in building business globally.
At the same time that the U.S.-based bagel restaurant chain was being bought, an
American doughnut chain announced its
ment to start operations in Colombia. It is
in limiting the reach of grain-based foods.
That is not just true in the wide-open marketplace embracing companies operating in
Canada, the United States and Mexico, but
applies to enterprises with even longer or
newer approaches.
Only a very few of the outreach moves of
the industry, including its quick service food
businesses, were embroiled in the American
controversy involving acquisitions designed
to set up new headquarters where corporate
taxes were lower than in the U.S. While wanting to avoid commenting on such legal issues,
it should be apparent that, based on what has
been transpiring in grain-based foods for
years, that such combinations make great
sense on their own and have not been driven
by a desire to save on or to avoid taxes.
It is no surprise that sophisticated foods
based on grains have become the cornerstone of diets in many countries in all parts
of the world. This is a development that may
be traced to the vitality of trade in grains, but
has evolved into a highly complex business
that only strengthens the fundamental position of grain-based foods.
Morton I. Sosland
Editor-in-chief

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WORLD GRAIN (ISSN 0745-8991) Volume 32, issue 12,

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World Grain - December 2014

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