KEY INTERVIEW: Adding Value to Grains, One Innovation at a Time

03 Aug 2015 --- Since its rebranding in November 2014, GoodMills Innovation has put all its efforts into “Unlocking the Power of Grain.” With the multi-million euro backing of Raiffeisen Group Austria and Palsgaard Denmark, the innovation arm of the GoodMills Group milling company is hoping to expand globally to become an €80m company in 2020. Managing Director Michael Gusko told FoodIngredientsFirst how he plans to bring value to grain.

GoodMills Innovation is a division of GoodMills Group, which is wholly owned by Austrian banking group Raiffeisen Group Austria. GoodMills is Europe’s largest milling company, operational in seven European countries, predominantly in Eastern Europe. 40 percent of GoodMills Innovation's shares are owned by the Danish emulsifier producer Palsgaard, which is operating globally. Palsgaard is bringing a more international voice, thus ensuring that the international perspective is firmly anchored in GoodMills Innovation's strategy.

With its offer of functional specialty flours, pre-mixes and innovative tailored grain products, GoodMills Innovation has positioned itself as a leading supplier of grain-based ingredients for the food industry and the bakery sector. It has also laid down its plans to expand globally. From a very small international base in 2000 (<1% sales outside Germany), the company currently enjoys 30% of its sales outside of Germany, with 5% going further afield outside of Europe. By 2020, Gusko hopes to have more than 50% of sales outside of Germany, with some 15% going outside Europe.

Within its food business portfolio, the company concentrates on five main business areas: Easy Baking, Health & Wellbeing, Snack Solutions, Efficient Production and Clean Label Solutions.

Using genuine grain varieties as raw materials and the latest physical refinement processes, flours with added value for health, pre-mixes and extrusion products come to life. All of these ingredients link health and naturalness, and are provided to artisan bakeries, industrial bakers and the food industry.

“We plan to invest €5m per annum as part of our five-year plan,” Gusko reveals. “This will involve the investment in innovative technology, mostly in the area of foods but also petfood and non-food development.”

“As a grain-based company, we find ourselves competing with millers, however we can differentiate ourselves as we are a miller that specialises in technology to get the most from the grain, like heat treatment, for example,” says Gusko. “Most of our grain milling competitors stick with the business of big volume commodities, while we have a different approach.”

Investment in research and development is an area that Gusko thinks sets his company apart from others.

“An example of the difference is clearly seen by the amount that we as a company invest in research & development,” he says. “As a whole, the food & beverage industry invests around 0.2% of sales into R&D, the R&D-intensity of the milling industry is even below 0.01%, while at GoodMills Innovation, we invest around 2.6% in innovation and R&D. If we add the external R&D funding our R&D expenditure as a % of sales sums up to 5.4%. Our investment as a solution provider and innovator is more in line with the automotive engineering industry (4.7% of sales).”

As a company, supported by owners GoodMills and ultimately Raiffeisen Bank Austria, GMI has the investment capacity to look for breakthrough innovation. “A great example of this is our recently launched YePea product,” says Gusko. “This special yellow pea is the answer for European speciality bread bakers who wish to avoid soy products that traditionally give their product that familiar bite. Bakers have been looking for an alternative mainly due to the increasingly negative perception of soy because of its genetically modified status and the intensive farming methods that go into its production.”

YePea gets its soft bite from a multi-stage process that involves steam conditioning, batch fermentation and slow drying followed by gentle toasting until well done. Next, the peas are ground to an optimum particle size. The cooking and fermentation processes ensure that the YePea product can be used by the baker without a soaking process because of its quick water absorbance. Flavor precursors that develop during the toasting process are converted into a mild and nutty taste during baking.

Gusko says: “The yellow pea is a special variety of pea, combined with a special treatment process, relating to its roasting and its milling. Where the pea traditionally failed when compared with the functionality of soy, was its low fat content, which contributes greatly to the ‘bite’ of the final product.”

“YePea has been developed with an improved bite and now benefits from being a low-fat high-protein alternative to soy,” explains Gusko.

So as GoodMills Innovation tackles the challenges of the physical treatment of grains, it continues to expand its knowledge of how enzymes work and the synergies between enzymes, emulsifiers and other important ingredients affected by their own functionality.

Much of the investment in R&D that GoodMills Innovation is making is hoping to translate into a significant increase in revenue for the company. Current turnover stands at around €50m, while the company’s goal is to increase revenue to some €80m by 2020. As Gusko explains, while breakthrough innovation costs money, there is also a fast turnaround on the investment.

“The profitability within the milling industry is generally not great, but we are lucky that we have the backing from such a big organisation as Raiffeissen Bank and Palsgaard Denmark, which are willing to invest in interesting areas. With the right help and the right financing, we can achieve a turnaround on the investment of less than three years, compared with an average return on investment of more than ten years in the general milling industry,” says Gusko.

As Gusko points out, if the company is to achieve its goal of becoming a stable force in the market, growth is essential. “But there is still a long way to go,” says Gusko. “The process may involve making strategic acquisitions. For example, there may be smaller companies out there with interesting technologies. We have the go-ahead to make acquisitions, but I stress that there are only very, very few companies that we would show an interest in. This will give us a broader angle on specialised technologies.”

As the recent launch of YePea demonstrates, GoodMills Innovation is not scared to push the boundaries to create value from all grains and more. With the backing of a secure investor and a buoyant market eager for protein and other grain-related solutions, GoodMills Innovation is sure to be on its way to leading the field.

By Kelly Worgan