World Grain - August 2012 - 33

FEATURE: HORIZON MILLING TURNS 10

meet the needs of our customers. Palmquist: The other part that I really notice, it just doesn’t feel like a joint venture. It feels more integrated. So when both companies talk about Horizon Milling and look for things they can do and provide, it’s part of us. It doesn’t have that stand-alone feel to it, which I think quite honestly is providing more value to Horizon Milling because the people who are involved from both sides, being Cargill or CHS, view it as theirs. Dye: I think Mark hits on a good point, because within Cargill, Horizon Milling operates just like another business in Cargill. And I think within CHS, Horizon Milling operates as another part of CHS. And seamlessness is a great word because within both organizations it’s not a separate deal outside the scope of things. It’s right in the center of what we do and is treated by both partners in that manner. Not all partnerships work out that way. Sosland: It’s easier for me to understand this point on the Cargill side than on the CHS side. Mark, when you have Cargill as the managing partner, can you elaborate a little more about how that feels seamless? Is it because origination is a really big part of ﬂour milling? Palmquist: On the front end, I think Cargill has been very sensitive as the managing partner not to come across as suffocating. They have worked very hard at that and made sure that we had structure in place that allowed for it. That opened up the door for both parties to understand that active participation is important for the business. So it went beyond just trying to protect owner’s rights, and went more into the idea that this is great beneﬁt to Horizon Milling. So, yes, origination is a big component, and because of that, there was a great value brought to the equation that Horizon Milling needed to make sure they stayed linked with us. But again, it has gone way beyond that. There’s a mutual respect that grasps best ideas, different ways of looking at things, different ways of performing can come from anywhere, can come out of different organizations. We have very robust board meetings
www.World-Grain.com / World Grain / August 2012

that are not just about going through the ﬁnancials and satisfying ownership obligations. It goes very much into what can we do to help the organization. The other beneﬁt that I always look at is that Cargill brings an understanding of people selection and people development. They understand the beneﬁts and not because they’ve been told that. It’s because that’s the type of people that Cargill has been very wise to bring in. Dan is a great example. Dan comes in not from a milling side, but from the grain side. He understands the value of origination, understands the importance of what CHS can bring to the table, so he makes sure that it’s not only protected, but can continually evolve into a greater balance. In this particular case, strategy inside Horizon Milling and what it means to both companies is actually clearer today, at least in my mind, than it was 10 years ago. Sosland: So how would you describe other differences today from 2002, including broad comments on the milling industry today, your customer base, your product mix? Dye: There have been many changes over time. The industry has changed, so the partnership has adapted. Our customers have consolidated, and we’ve tried to become a lot more strategic in serving customers. So rather than just having a product to sell to whomever wants to buy it, we’ve tried to be more innovative and help customers in the marketplace in product development. We’re continually looking to partner with the customer, to leverage the food science knowledge and expertise within Cargill and to take those applications directly to the customer. As an example, we’ve been able to combine our ﬂour with other Cargill ingredients to meet a nutritional or health speciﬁcation or beneﬁt for a customer. Those are the things we weren’t even thinking about 10 years ago when the joint venture was formed. Sosland: Are there metrics you could offer in terms of how much cross selling there is in 2012 versus 2002?

Dye: Unfortunately, we don’t have those metrics, but what I can tell you is that our approach to the market has changed signiﬁcantly since the partnership was formed. So when we go to the customer today, with more of an enterprise approach, we are bringing multiple Cargill products and services in a coordinated effort. Today, we have a part of our Horizon Milling sales team as members of a cross selling team, that is selling not only ﬂour but other products and services to our customers. It meets the need of the customer who said, “Hey, you know what, we’ve bought ﬂour from you forever, and now we’re buying oils or cocoa or other ingredients.” It’s a lot more efﬁcient in terms of everything from price risk management to applications. That’s a big change over the last 10 years. Sosland: Mark, I’m sure you’ve also seen change. Palmquist: On a market basis, there is just more volatility today than there was 10 years ago. Part of that relates to ingredient prices but part of that is the change in consumer eating habits, which brings the ball back once again to providing solutions for customers. They don’t just need ﬂour. They may need help managing their price risk. Food safety is becoming a much bigger issue. It’s dealing with the changing mix in the products, be it whole wheat, whole grain type or a shift into noodles. All of these things going on have really created some nice advantages for Horizon Milling because it’s well equipped with the base at Cargill, added in with the support of CHS to really help that customer through this whole process. It’s a very difﬁcult environment for a lot of the food companies out there, what they must post on the outside of the package in terms of nutrition and dealing with inventories and very volatile pricing. Being able to help them manage through that creates opportunities, and Horizon Milling has responded very well. Sosland: How would you sum up where this relationship stands today?
33

http://www.World-Grain.com

World Grain - August 2012

Table of Contents for the Digital Edition of World Grain - August 2012