General Mills decided several years ago to align its products more with the changes taking place in the grains industry, says Ron Olson, vice president for the company's grain
operations. Now, General Mills is at the forefront of the identity-preserved or IP movement.One advantage for General Mill's IP endeavor is its ownership of 35 country
elevators, mostly in Idaho and Montana. "We have a direct link to farmers," says Olson.
General Mills has estimated that of the average consumer dollar spent on
food, inputs and seed get 8 cents, the farmer, 29 cents; country elevators and processors, 7 cents; food manufacturers and finishing processors, 30
cents; and retailers (including marketing/advertising) 26 cents. In the future, a greater share of the profits will be created at the front end of the chain, as seed and inputs are revolutionized through biotech.
In Olson's view, biotech will come around as perceptions change; it has been poorly defined and marketed early on to consumers. "Why would you call something 'genetically-modified organism' and expect people to
eat it?" says Olson. Perceptions will fall particularly when a biotech-developed food product is unveiled with specific health benefits, such as reducing cancer.
Olson says General Mills works closely with Monsanto, and the goals of each company are complimentary. "Monsanto doesn't want to be in the
food industry, and General Mills doesn't want to be in biotech. We as a food company can do product testing and consumer testing they don't have the ability to do, and can give insight into what consumers want."
Olson says the grain industry is shifting from being independent to becoming more interdependent; from producing generic commodities to producing identity-preserved ingredients; from a focus on agronomic
traits development to a greater focus on output traits (such as taste, texture, performance, health); and from open access of grains to proprietary grains.
"My fear is proprietary," he says. "That someone will discover something we can't get our hands on."
Most General Mills cereals are made from soft red wheat. General Mills
uses about 90 million bushels of grain annually, with almost 13 million bushels this year that are variety specific. He says General Mills hopes
50 percent of the grain the company uses will be identity preserved within five years.
Olson says IP helps General Mills maintain consistent product quality.
For example, he says the curling of a flake in a box of cereal is genetic, and dependent on variety. If you see curled and noncurled flakes in the same box, that's because the cereal was made from different grain
varieties. Curled flakes are more desirable, as they crumble less, make the cereal box appear fuller, and have better "mouth feel" for consumers.
"That's a good reason why a lot of our product is going variety specific," says Olson. More uniformity will also help General Mills reduce grain
losses during origination and early processing, and improve extraction rates. Every percent increase in extraction results in $2 million in savings, he says.
Even the wrong hydration from a variety of oats can affect the formation of Cheerios. In one taste test, Olson says 18 of 20 people preferred a
particular cereal made from one wheat variety, over samples of the same cereal made from other wheat varieties.
Olson says General Mills has hired several grain biochemists to "study
every trait we can think of" that may be affected by the IP process.
"We're starting to learn that variety and quality make a difference, and
this will be even greater in the future," he says. "It won't be long until we can pluck a specific gene and put it in the best variety. We'll have a
(specific variety) for Wheaties. We'll have a (specific variety) for Bisquick." Now, Bisquick is a blend of hard and soft wheats.
The premium General Mills pays farmers for IP grain now is as much as
60 cents per bushel. With only 650,000 bushels of wheat needed annually to make Wheaties, he says "it's very easy to pay for what we want."
A half dozen farmers serve on an advisory board that is helping General Mills lay the infrastructure for IP grains. "Some meetings we'll have
farmers, elevators, and other pieces of the food chain in the same room."
Olson says General Mills wants farmers to grow grain to be used in General Mills products for which the consumer will pay more. "If we
need to partner with producers to do that, we'll do so."
At the same rate, he says a singular contact is preferable. "We're not
staffed to check all fields or contact 1,000 farmers." That's where the concept of a closed co-op can be beneficial in helping to source or coordinate IP grain, Olson says.
General Mills decided several years ago to align its products more with the changes taking place in the grains industry, says Ron Olson, vice president for the company's grain
operations. Now, General Mills is at the forefront of the identity-preserved or IP movement.