Globalization not milling problem
Feb. 28, 2017
Even flour millers on opposite sides of the world would be expected to have quite similar views regarding the important industry goals that merit aggressive pursuit. After all, the flour milling process is nearly identical from country to country, at least among developed nations, and the main customers are mostly engaged in much the same processes to produce bread and similar products. Except for sub-tropical areas deficient in wheat production, millers for the most part have ready access currently to large, if not record-setting, supplies of wheat grown locally. While managerial knowledge and related skills in operating flour mills vary considerably among countries, instances of milling executives moving from area to area would affirm the commonality of business agendas.
Having thus made the case for why similar, if not identical, issues face millers in different nations, let’s look at a recent industry gathering in Australia where consideration was given to major industry issues. It was there that an Australian miller from one of his nation’s oldest companies declared that the success of Australian milling “depends on continual innovation, differentiation and ensuring Australia’s best is the world’s best.” Peter Cobb, who presented these remarks, added that milling’s success depends primarily on developing niche products, not commoditized ones. In talking about product differentiation as a goal of flour milling, he said that success and growth depend on whether a company can develop products that meet the expectations of both low demanding and high demanding customers.
Mr. Cobb did not amplify on what “continual innovation” means for flour milling. Nor did he point out that in most of the world product quality and consistency, not innovation, have had the upper hand for some time. No one would dare to dismiss innovation as a desirable quality in any sort of company, making flour or much else. Indeed, it is product innovation that has gained the attention of wholesale baking in America and in other developed nations.
Providing flour that matches the requirements of whatever product is being made by bakers or other customers long has been the pride of millers. Sure, there have been innovations in flour, but their successes have been limited to the point that this is not a broadly embraced goal.
The same may not be said of another of Mr. Cobb’s target — differentiation. The problem here is that defining this term from milling’s point of view is not the least bit easy. Each milling company strives to differentiate its products, its services and all the other steps defining relations with customers. That is a given even though differentiating the products of flour milling might prove a problematic exercise, especially if this is interpreted to mean change. Observing the stress that occurs each year as the new wheat crop replaces its predecessor, introducing all the large and small adjustments in both milling and baking, leads to a belief that such differentiation is to be avoided, not sought.
Relevant to this observation as to how flour milling bears resemblance among countries, no matter how closely or distantly located, is to bring up attitudes blamed on globalization. The latter, a reflection of international trade, has emerged as an issue in many countries, especially those where powerful elements take opposing points of view. Flour milling, a business that is conducted internationally and a basic part of the food industry in many nations from their founding, is barely touched by these issues because flour is not a commodity that moves long distances in international trade. With few exceptions, it is difficult to cite a flour milling business anywhere that is touched in either a positive or negative way by globalization. One exception, of course, is where a mill seeks to innovate or to differentiate from how others operate. If this is advocated in Australia or other places, it creates something millers must worry about like globalization upsetting what has worked well for a long time.