Click to read original story on Chattanooga Times Free Press here.
December 12th, 2020 | by Dave Flessner
Staff Photo by Matt Hamilton / Grain Craft CEO Pete Frederick on Thursday, Dec. 3, 2020.
This story was updated on Monday, Dec. 14, 2020 at 1:03 p.m. to reflect that Peter Frederick is president and CEO of Grain Craft.
Peter Frederick heads what he admits is probably the largest company in Chattanooga most people have never heard about.
From his second-floor office in the Craftworks building on Main Street, Frederick and nearly three dozen other workers, manage 13 flour mills for Grain Craft, the largest independent flour mill in the country.
Grain Craft, which is the third biggest flour milling company in the United States and the ninth biggest milling firm in the world, doesn’t mill or process any wheat in Chattanooga. Its closest mill is in Rome, Georgia, which is one of three mills in the Southeast. Most of the company’s operations are west of the Mississippi in the grain belt, including three mills in Kansas where the company announced in September it is opening a new Grain Craft Lab at the Kansas Wheat Commission’s Kansas Wheat Innovation Center in Manhattan.
But Frederick, a University of Iowa graduate who originally came to Chattanooga to work at another flour mill company and later worked at Cargill in Minneapolis, jumped at the chance to return to Chattanooga when he was given the chance to head company sales 17 years ago.
“I love Chattanooga and this has been a good location for our company,” he said.
Frederick, a 35-year veteran of the flour industry, was named last month as CEO Grain Craft. He succeeds Charlie Stout, who remains as the company chairman.
As president of the company and its predecessor since 2012, Frederick helped integrate the three companies that came together six years ago to form Grain Craft — Milner Milling, Pendleton Flour Mills, and Cereal Food Processors, Inc.
“Pete has deep industry experience and a proven track record of strong leadership,” Stout said. “He was instrumental in the formation of Grain Craft and seamlessly led the merger of the three companies. He recognizes the challenges we must confront and the strengths we already possess to continue to make Grain Craft a leader in the flour milling industry.”
Although the industry is mature and the per capita consumption of wheat flour in the United States dropped by nearly 10% in the past two decades before this year, the pandemic has boosted flour sales as home-bound Americans have been reintroduced to baking.
From its peak in 1997 of about 146 pounds per person, per capita flour consumption fell to about 132 pounds per person with more consumers shifting to low-carb or even Gluten-free diets.
| Company at a glance
Name: Grain Craft, formed in 2014 by the merger of Milner Milling, Pendleton Flour Mills, and Cereal Food Processors, Inc. |
Staff Photo by Matt Hamilton / Grain Craft CEO Pete Frederick talks about the varieties of flour produced by Grain Craft on Thursday, Dec. 3, 2020.
Although flour sales to pizza shops, restaurants and cafeterias have fallen with fewer people dining out or going to work or school, grocery sales of flour have spiked.
Many Americans who regularly ate out or relied upon prepared or processed foods in the past are rediscovering their kitchens and have begun baking bread and other foods using wheat flour. One Midwestern flour company, King Arthur’s, reported a 2,000% jump in sales in March when the coronavirus forced millions of Americans to stay at home and stock up on food staples.
Frederick said Grain Craft’s flour milling and packing operation in McPherson, Kansas, was expanded and upgraded in 2018 to supply several private-label flours to grocery chains “and that business just went crazy this year.
“When the pandemic hit, sales just skyrocketed there,” he said. “If there is a bright spot in this difficult year, it is that people have rediscovered simple things and are finding the joy of grain-based foods.”
Even while flour consumption has grown this year, Grain Craft has closed three flour mills over the past seven years and shifted production to other company facilities.
“Like any manufacturing, you need to make sure you have the scale, flexibility and transportation access to be successful,” Frederick said.
In 2013, Grain Craft closed a leased mill in Hawaii when shipments from the continental U.S became more frequent and cheaper. A few years later, the company shut down a mill in Salt Lake City that was consolidated with another more flexible and efficient mill in Ogden, Utah. Earlier this year, Grain Craft also closed a mill in the industrial part of downtown Cleveland, Ohio along the Cuyahoga River because access to and from the mill had become increasingly difficult, Frederick said.
“Closing the Cleveland mill was a tough decision because that was the original mill that Cereal Food Processors started in and the mill site dates back to the 1870s,” Frederick said. “Unfortunately, it wasn’t as flexible or as cost efficient as some of our other mills and it was more difficult to get wheat into the mill and get flour shipped out from that location.”
In spite of those mill closings, Frederick said Grain Craft is eager to grow and make other acquisitions in the industry.
“There are a lot of opportunities out there and we’ve looked at many potential deals (since the 2014 merger of Milner ad Pendleton with Cereal Food Processors),” he said. “But we’re very keen on not being distracted and making sure we remain focused on our core business and that we executive that well.”
The company name, Grain Craft, was chosen rather than the former flour milling name to reflect the potential of other types of grain crafting, Frederick said.
While Grain Craft corporate ancestry dates back more than a century, the company is continuing to look for new ways and markets to be successful and to help its wheat farms succeed, Frederick said.
That’s why the company is preparing to relocate its Grain Craft lab, now housed at the company’s Wichita, Kansas flour mill, to the Kansas State University campus in February. The farmer-owned, wheat research facility in Manhattan began operations in 2012 as part of the Kansas Wheat Commission’s vision for advancing technology in new wheat variety development.
The new Grain Craft Lab will feature analytical, milling, rheological and application capabilities, along with access to other facilities in the Kansas Wheat Innovation Center, including a complete test kitchen.
“Our new lab takes our commitment to be a resource to our customers to a new level,” Frederick said. “It not only provides a space focused on quality and product performance, but it’s also a space in which we can grow, collaborate and learn together.”
Frederick said he is eager to help farmers to not just boost their crop yields, but to help farmers breed and produce higher quality varieties that Grain Craft can take and build different baking characteristics.
Justin Gilpin, CEO of the Kansas Wheat Commission, said the wheat quality lab “will be the missing piece of the puzzle in this extraordinary research facility that farmers have invested in.”
“We’re excited to collaborate with Grain Craft in this venture,” he said.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.
Staff Photo by Matt Hamilton / Grain Craft CEO Pete Frederick answers interview questions on Thursday, Dec. 3, 2020.