World Grain - October 2005 - 36

millingoperations

Adding value to flour
The challenge for milling companies is to find
innovative ways to deliver more than just flour
by Mark Fowler

It's a question that all flour milling companies wrestle with:
How can we differentiate our products and services to get
more from our flour than our competitors and obtain the best
financial return?
Flour is frequently priced as a commodity, so milling
companies must be innovative to improve flour sales. This is
achieved by adding value to their products and services by
delivering more than just flour to customers.
Whether it is the responsibility of the sales and marketing department or the research and development team, everyone must work together to achieve the best results. From
my experience, this added value can come from product
differentiation or a focus on customer service. Here are a
few thoughts on ways to get the most from the suppliercustomer relationship.
KNOW YOUR CUSTOMER
First and foremost, you must know your customers, the
products they produce with the flour they purchase and what
flour quality they require to produce those products.
Much like other consumers, it is not uncommon for flour
customers to purchase out of habit. They may request the
same flour quality specifications on a monthly basis without

Flour is frequently priced as a commodity, so
milling companies must be innovative to
improve flour sales. This is achieved by adding
value to their products and services by
delivering more than just flour to customers.

much thought about the quality of flour they need to produce
a desired product.
For example, protein content is one specification that is of36

The American Ingredient Company's Kansas City, Kansas, U.S. ingredient
blending plant uses an automated production process to create and
package specialty ingredient blends. Photo courtesy of the American
Ingredient Company.

ten misinterpreted. I have found that flour milling companies
in developing markets often compete for market share by offering the best "quality" flour, defining quality as higher flour
protein content. In reality, the market is very cost sensitive. By
offering two quality flour types, the traditional higher protein
premium flour can be offered to the consumer as a premium
product for specialty goods.
In addition, you can offer alternative lower protein flour
at a lower price utilizing a blend of wheat types to lower the
cost of wheat to the milling company but still produce good
results for the consumer. In this way, the company is able
to increase sales volume and increase profitability by offering a lower-cost product. Their customers are very satisfied
with the service the milling company offered by helping the
bakeries increase their volume and profitability by lowering
their cost of production.
UNIT SIZES AND DELIVERY SCHEDULES
Unit size and delivery schedules are other creative ways
October 2005 / World Grain / www.World-Grain.com

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World Grain - October 2005

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