Milling & Baking News - May 8, 2018 - 32

exploring with HealthSense primarily have been tortillas, flat
breads and pasta, though Mr. Levangie added, "We're trying
Mr. Levangie said Bay State believes HealthSense will prove
attractive to formulators who currently shun wheat.
"I hope some other food companies rethink the use of wheat
in certain applications," he said. "I mean nobody trying to bring
innovative products to the granola, nutrition bar and snack categories uses wheat anymore. Because now we can deliver a major macronutrient, maybe people will invent some new stuff."
Bay State is marketing HealthSense as a "better fiber alternative" than options available on the market today. For consumers, the product has particular appeal, Mr. Levangie said.
"HealthSense is much more socially acceptable than alternative
fibers because it's slow digesting, fermentable," he said. "We are
focused right now on trying to build this ingredient business as
a better fiber alternative from the ones you are using today. So
the markets we're mostly interested in are markets where flour
and fiber additives already exist. So, if you think about high-fiber
bread, the different fiber-intensive product lines that already exist, if they're using flour, and they are adding fiber, we want to
talk to them."
Bay State continues to work on the fiber content of its HealthSense flour, Mr. Levangie said.
"The intent though is that if you use HealthSense's flour in an
application, and bread being sort of a standard, you'll at least be
able to make a claim of a 'good source' of fiber," he said. "In some
applications we hope for excellent source. And these are some of
the things we're still working on."
Viewed purely through an economic lens, Mr. Levangie said
the market has established a wide differential between the value
of whole wheat flour and fiber.
"We did a lot of work, using consumer data, and we hunted as
best we could around foods where we saw both flour and fiber
additives," he said. "For purposes of this product line being relevant to Bay State, you know fiber is a good size market. We can
make a good living competing in the fiber business. It's cleaner
label. We also think the importance of properly feeding the gut
flora with resistant starch will increase the demand for products
made with HealthSense over time. And once we scale it up, we
believe it will be more cost effective than adding fiber."
Given what Mr. Levangie calls the "fickle" tendencies of consumers and food companies, will Bay State's multi-year focus
on HealthSense pay off through a lasting business?
Bay State has benefited from the willingness of the Rothwell
family to invest with an eye to the long term, Mr. Levangie said.

Gathering with members of the Rea family in a field near Walla Walla,
Wash., where the Reas are growing HealthSense wheat were representatives of Arista Cereal Technologies (developers of high amylose
wheat), Limagrain Cereal Seeds (Bay State's seed breeding partner)
and Bay State Milling employees involved in the HealthSense initiative.

"We've been at rigoursly developing this product and the supply chain from seed to flour for four years, and I personally have
been working on it for 10 years," he said. "And it hasn't contributed anything but cost. Not many companies would commit to
that. And we're disciplined. We are certainly by no means under
the same scrutiny as public companies to deliver quarterly, but
we care about short-term results."
With its shift to specialized ingredients, Bay State has been
"totally rethinking" its flour mills, Mr. Levangie said. He described these changes as evolutionary, in part because the company's long-time focus on sacked versus bulk flour has oriented
its mills toward meeting the needs of smaller customers.
"We tend to have pretty flexible mills that are accustomed to
doing smaller runs, and because we've been in the organic business a while, we have more experience in identify preserved
wheat," he said. "HealthSense is a whole step up, so as others
perhaps have been adding capacity, buying mills, we are more
focused on preparing the mills that we have for the business
that we're creating. That's repurposing some incremental expansions that we've talked about."
Investments have been required in enterprise resource planning systems to help manage the increasing complexity of the
business, and additional storage has been added to the company's mills because of the increased need for segregation and
separation of grain.
"A lot of thought shared by many individuals went into the
strategy here," Mr. Levangie said. "What makes sense? What are
its boundaries? What's in? What's out? That's a big part of the
constant decision making here. Many things needed to come together to make all this possible."
Emphasis on a team culture versus an individual or top-down
approach has been modeled by Mr. Levangie's predecessors
and continues, he said.
"Probably the most exciting thing for me at Bay State is seeing
more and more of our employees taking responsibility for the
strategy," he said. "For example, we just won best new ingredient of year at Expo West for our SowNaked naked oat. The truth
is I had nothing to do with that. A team of our people made this
happen, and it will be a really nice business for us."
So, will Bay State's strategy succeed? Will the company thrive
in a milling industry in which so many of its competitors are focused on consolidation or adding flour milling capacity?
Perhaps those who may be skeptical should remember Thoreau's famous indictment of conformity:
"If a man does not keep pace with his companions, perhaps
it is because he hears a different drummer. Let him step to the
music which he hears, however measured or far away." MBN
- L. Joshua Sosland


32 / May 8, 2018


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