Seaboard Competition
Now Viewing Seaboard's competition in: Grain Milling (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's customers? - Typical customers are commercial bakeries, fast food and quickservice restaurants, cereal manufacturers, and food companies.
Does the company manufacture mixes or branded products? - Many mills manufacture bread mixes, dough, and branded products.
How does the company market its products? - Major types of marketing include trade publications, promotional events, trade shows, and customer visits.
How satisfied is the company with its broker network? - Institutional and retail product sales are driven by a mix of a traditional internal sales force and third-party brokers.
How does the company service its customers? - Because most large mills sell consumer products, customer service typically includes a toll-free number and web-based customer assistance.
Does the company have any joint ventures? - Large mills often develop consumer food products or joint venture with major food companies to develop co-branded products.
What are the typical prices received by the company? - Typical product prices are $35 for a 100-pound sack of bread flour. Cornmeal and rice average $10 per hundredweight (cwt). Prices are susceptible to commodity shortages and oversupply.
Competitive Landscape
Demand is driven by consumer patterns in bread, whole grains, and rice consumption. The profitability of individual companies depends on managing grain prices and inventory effectively, and minimizing the risk of rodents, insects, and molds. Large companies have advantages in advanced milling technology and a diversified product line. Small operations can compete effectively by specializing in organic, non-genetically modified, or heirloom grains. The industry is capital-intensive: average annual revenue per employee is about $800,000.
Business Challenges
CRITICAL ISSUES
Volatile Grain Prices - Grain prices paid by milling companies fluctuate considerably from year to year, due in large part to inconsistencies in wheat supply and demand. Wheat supplies are subject to weather, and poor global harvests can drive up demand for US exports. Government subsidies for competing products, like corn for ethanol and soybeans, can also have a major impact on wheat supply and prices. Higher grain prices can affect operating costs and profit margins for milling companies. Established sales contracts between flour mills and key customers can limit a mill's ability to pass along increased raw material costs.
Dependence on Consumer Trend - Wheat accounts for over half of total industry revenue, and consumers can be fickle about their overall wheat intake. Grain mills depend highly on consumer interest in eating wheat-based products like bread, pasta, and cereal. Low-carbohydrate diets, a shift from bleached white flour, or a switch from barley-based beer to wine can significantly impact profits. Most mills process only one type of flour per site; thus, consumer trends can impact capacity levels and profitability at individual facilities.
Industries Where Seaboard Competes
- Food
- Grains
- Milled Grains, Flours & Baking Mixes(primary)
- Grains
- Agriculture
- Beverages
- Chemicals
