Milling & Baking News - March 21, 2023 - 34

SIGNATURE interview
KESTRELDRONEMAPPING.COM AND SOSLAND PUBLISHING CO.
TUES | 03 21 2023
business, " he said. " They're involved at
the appropriate levels relative to how the
business is doing; capital placement and
investments in not only our current core
business but any other businesses that we
want to look at. "
While proud of what Grain Craft has
achieved as a business since the company
was formed in 2014 with the combination
of Cereal Food Processors, Inc.; Milner
Milling Co. and Pendleton Flour Mills, Mr.
Frederick said the path to success has not
been without speedbumps. To the contrary,
when asked what had changed since Grain
Craft's creation, Mr. Frederick paused and
shook his head over what had transpired
over the course of the last nine years.
" Let's start with the transaction, " he said
of the 2014 acquisition of Cereal Food Processors.
" First we had major a acquisition
of a much larger competitor (Cereal Foods)
that tripled the size of the business. That's
transformational. Then, two years later,
we go through a recall.
" So, over eight years, we had a major
transaction, a major recall, a once-in-acentury
pandemic and a sale of the entire
business. And then we had a fire. These
are not small events. They are major
events and not always in your control. "
Ultimately, Mr. Frederick said the company
did more than just weather these
episodes. He said someone reviewing
the company's financials over the years
would struggle to discern the potentially
cataclysmic nature of the various incidents
the company experienced.
" You don't see these events (in the financials), "
he said. " What we've learned is that
our very experienced leadership team
Peter T. Frederick
was key in dealing with these incidents.
We've learned a lot of resilience through
all of this. I mean you're talking bolts of
lightning - a recall, a fire, a once-in-a-century
pandemic and a sale. "
Looking forward, Mr. Frederick said
more merger and acquisitions activity is
likely for the milling industry.
" I don't think the industry is done transforming, "
he said. " I think it means other
changes of ownership at some point. "
While the company has not made major
acquisitions since Grain Craft was established
nine years ago, Mr. Frederick said
the lack of transactions did not reflect a
lack of interest.
" We've always been relatively aggressive
about looking at various businesses,
but for many reasons those just never
happened, " he said. " We see ourselves as a
food ingredient provider, and we're looking
at businesses that makes sense, that fit
that strategic vision. Redwood is fully on
board with our vision for the business. "
Even though he declined to share the
names of acquisition candidates Grain
Craft has considered purchasing, Mr. Frederick
said each possible transaction was
viewed through a specific filter.
" We are primarily converters of grains
into food ingredients, " he said. " One of
the things we've always said at Grain
Craft is we won't do things that distract
us from our vision, and that's served us
well. We've just not been distracted about
various initiatives that we could have
undertaken but decided not to. "
This determination to avoid distractions,
to stay focused, is exemplified by the Grain
Craft Innovation and Quality Laboratory
in Manhattan, Kan. Many companies view
innovation as principally focused on its
customers, often in the development of
new end products. While the GCIQ facility
has a baking laboratory, the space is
heavily dedicated to what Mr. Frederick
described as " upstream innovation, " referring
to up the wheat foods chain toward
the breeding and cultivation of wheat.
" By the way, we've filed to trademark
the name 'upstream innovation,' which we
see as a platform, " he said. " We thought
it was distracting to go downstream
in research and development in food
products. We just didn't see that as our
strength, but we did feel if you went back
upstream, to where the farmer is, that's
the space that we operate in. We're the
conduit for grain being converted into
food, so we felt like going upstream was
where we wanted to innovate. "
This focus was fueled by talent the comInnovation
Center in Manhattan, Kan.
34 MILLING & BAKING NEWS
pany already had on its staff, Mr. Frederick
said, particularly singling out Reuben
McLean, who helped spearhead the Grain
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Milling & Baking News - March 21, 2023

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