SUN VALLEY, IDAHO — The movement coursing through the food industry toward offering consumers more sustainable, healthful products presents rich opportunities for the North American flour milling industry, said Tedd Kruse, the newly elected chair of the North American Millers’ Association.

In an interview with Milling & Baking News, Kruse, who is president of ADM Milling & Baking Solutions, Decatur, Ill., cited various industry challenges ADM contended with earlier in his career to explain his confidence in the ability of milling to thrive if it adopts a disciplined approach to growth. The interview was conducted Sept. 13 during the NAMA annual meeting at the Sun Valley Resort in Sun Valley.

Kruse was elected NAMA chair that same day by the organization’s board of directors, succeeding Brian Doyle, chairman of King Milling Co., Lowell, Mich. No company has been more prominent in NAMA leadership over the last generation than ADM. As chair, Kruse follows in the footsteps of past ADM presidents H.D. (Joe) Hale, who was Millers’ National Federation chair from 1990-92; Craig L. Hamlin, the first NAMA chair, from 1998-2000; and Mark L. Kolkhorst, 2016-18.

A native of northeastern Iowa, Kruse grew up on a farm that raised corn, soybeans, cattle and hogs. In addition to farming, his father was a sales manager for MoorMan Manufacturing Co., a feed manufacturing company (coincidentally acquired in 1997 by ADM).

“Growing up I had a passion for agriculture, but my passion wasn’t strong enough that I wanted to be a farmer,” he said. “I appreciated the importance of being a frontline farmer. I studied agribusiness and finance with the intent to go into either ag lending or commodity trading.”

At Iowa State University, Ames, Kruse graduated with an agricultural economics degree in agribusiness sales and marketing. Opportunity came when ADM offered Kruse a position as a commodity merchandiser. He began ADM’s intensive training program in 1993, moving every few weeks over a nine month period, gaining exposure to a variety of ADM’s grain storage, handling and processing assets.

Longer stints followed at ADM’s corn processing complex in Cedar Rapids, Iowa, and then the company’s oilseeds facility in Red Wing, Minn., a plant with roots dating back to ADM’s 1902 origins as a linseed oil producer. The Red Wing complex included an oilseed refinery, mostly for industrial customers.

Kruse’s work remained focused on the oilseeds business when he took a position in 1996 at ADM’s Decatur headquarters. It was a period of expansion for soybean and other oilseed crushing capacity, mostly to capitalize on increasing global demand for soybean meal, Kruse said.

The company added edible oil refineries during that period, and Kruse joined the sales team.

“That’s when I really got introduced to the food industry,” he said. “I started selling all the varieties of oils ADM produces, whether soybean oil, canola oil or sunflowerseed oil, corn oil, predominantly to snack makers and bakers, all the different uses for oil in food applications.”

His work in sales led to opportunities to manage assets, including assignments giving him P&L responsibilities for certain assets, responsibilities that broadened until he was promoted to vice president of the oils group.

In contrast to his early work centered principally on the origination and processing of raw commodities, his sales work gave Kruse experience in “more of a value-added business.”

“One of the huge opportunities that transpired when I was involved with the fats and oils business was when FDA (the Food and Drug Administration) came out with their trans fat labeling regulations, and that segued into the trans fat ban,” he said. “There were a lot of products we made that utilized partial hydrogenation, which created trans fats which were really functional, but there were issues with the products. We took advantage of the opportunity to utilize the innovation at ADM to come up with customized solutions for customers so they could make bread, or cookies or snacks without having trans fats. As much of a challenge as that was, and we had a large base of assets dedicated to making those products, we were able to pivot. We listened to our customers, what they needed, what they wanted to come up with customized solutions that not only gave them the functionality they wanted but the flavor and other qualities they appreciated at the end of the day.”

Kruse said the cooperation became a model for ADM and other major processing companies working to meet customer needs.

“It’s what we see with sustainability and regenerative agriculture,” he said. “You have the pull coming from the consumer and others with the food manufacturers saying, ‘How am I going to do it?’ You’re going to do it by partnering with an ADM, with a Bunge, with a Cargill, whoever it might be, and then you put together a whole regen program in your supply network.  We are going to help you work directly with growers. You’re getting that connectivity and all the benefits that go with it — for sustainability goals, for transparency, and your brand.”

With major public commitments food companies have made to lower water usage and/or greenhouse gas emissions for 2030, 2040 and 2050, more such partnerships are inevitable, Kruse said.

Kruse moved to ADM’s corn processing business in 2009, heading up sales principally of the company’s corn sweeteners for food and beverage customers.

“I really enjoyed working with the food customers,” he said. “It also gave me an appreciation for what I was doing, what ADM was doing … the role ADM plays in food manufacturing, whether on the oils side, the sweetener side or the flour side,” he said. “The products we made enable food products to be made to feed people around the world. It’s a pretty noble purpose. My son is now working at ADM. It’s a thrill to see the light turning on as he makes the same realization about the importance of what we do.”

It was during this period in corn processing, Kruse said, ADM began focusing on developing alternative sweeteners to high-fructose corn syrup in response to signs consumers and food and beverage makers were looking to replace HFCS. Those early efforts continue to bear fruit today in the high-intensity sweeteners such as stevia ADM offers.

Two years later, ADM entered a joint venture with ACH Food Companies named Stratas Foods. With his deep experience in fats and oils Kruse was asked to become involved, initially as a member of the company’s board of directors. After nine months on the board, Kruse was elevated to chief executive officer of Stratas.

Kruse described Stratas as a “phenomenal learning experience,” as he was tasked with bringing together two disparate company cultures, building a management team and drafting and executing a strategic plan.

“In the beginning, it was supposed to be one plus one equals three,” he said. “Instead, one plus one wasn’t even making two. I was afforded a level of autonomy you don’t always get in a large corporation. Failures I experienced and things I was able to do were a great foundation for who I am today, how I lead today.”

He led Stratas for 10 years. That the company was dedicated to taking legacy commodity-type products and adding value by making them more functional formed an approach Kruse said he is taking to the legacy ADM milling business.

“It’s a huge opportunity as we have transitioned it over to ADM Milling & Baking Solutions,” said Kruse, who was named president of the milling company in 2020 after the business was moved to Decatur from its longtime headquarters in Overland Park, Kan.  “We are working to take the great work my predecessors had done with the milling business and try to make it a more value added and specialty business.”

Adding value, or “innovative solutions,” is one of five strategic pillars of ADM Milling & Baking Solutions, he said.

“One of the reasons I’m so excited about that is the innovation partner we have internally is our Nutrition business, which is already making some great ingredients that bring heart health, digestive health and cognitive health into the mix,” Kruse said. “What we want to do is take those ingredients and start working them into our flour blends, our concentrates, bakery mixes. We think that’s a huge opportunity, and we have only scratched the surface so far. That’s a big way I will take the learnings I gained at Stratas to bring that into the ADM Milling & Baking Solutions business.”

Kruse touched on several other of ADM Milling’s strategic pillars, which include sustainability commercialization, execution excellence, sales and operations planning acceleration and people and culture. For example he described ways ADM is changing how it operates through “execution excellence,” an efficiency initiative formerly described as network optimization. Objectives include operating the company’s flour mills with less downtime, higher yields and lower manufacturing costs.

“A lot of the way we are doing that is looking at our total network of mills,” he said. “One of the things I’m really excited about that we’ve really advanced on is cross border cooperation. How we’re looking at North America more holistically.”

He said that in the past, mills would look at their individual markets and territories rather than seeing themselves as part of a broader network. This siloed approach also lessened ADM’s ability to optimize the utilization of its network of mills in Canada, where the company is the leading miller.

“Now we’re looking at all of North America and across the board collaboration whether it’s wheat or finished flour,” Kruse said. “It is really helping make us a more effective, efficient supplier for our customer.”

Examples he cited include the Northeast, where the company operates mills in New York (Hudson and Buffalo) and in nearby Ontario (Port Colborne).

“You have facilities that are relatively close to each other,” he said. “We’re taking advantage of that proximity and the capability of each one of those locations to more effectively meet what our customers tell us they want.”

A similar model applies in the West, with mills in Calgary in Alberta and Cheney and Spokane in Washington.

“We’re able to leverage those assets to go not only across the border but then really extend it down the West Coast and how we are serving the western region of the US for our customers,” Kruse said. “It’s not that we weren’t doing it before. It’s that we are making it a higher priority. Some of the opportunities that are out there have enabled us to accelerate.”

Another approach for execution excellence revolves around optimizing operations planning, Kruse said.

“It’s scheduling production more effectively, running the plants more effectively,” he said. “It’s how we get products to different regions, doing more rail-to-truck transfers. It’s getting product to customers we were not servicing before, which goes back to this idea of certainty of supply, consistency and reliability. It’s something we’ve heard all along from our customers, especially during the pandemic, how important those things are. We’re focused on driving further improvement in those areas to become a more strategic partner to our customers.”

A decision to roll out new marketing and branding around HarvestEdge largely has been completed, Kruse said, accompanied by a rationalization of numerous legacy stock-keeping units, brands that were vestiges in some cases of decades-old acquisitions.

“Now we’ve come back to focus on fundamentals — the team and the culture we have, continuing to support diversity and inclusion, within what we’re doing, not only in Milling & Baking Solutions but all across ADM,” Kruse said. “We are driving higher levels of collaboration and communications. Teams responsible for culture. We’re going to work on that to improve every day as we go forward.”

Kruse said he is pleased with the direction the milling business has taken over the last four years and how the division has “solidified” its place within ADM.

“Now we’re focused on continuing our journey,” he said. “So, we’ve had the discipline to rationalize some of our older, less efficient mills that required heavy investments, while investing in newer, more efficient facilities like our state-of-the-art mill in Mendota.”

As president of Milling & Baking Solutions at ADM, Kruse is well aware of industry trends. According to data from the US Department of Agriculture, US daily milling capacity peaked at 1,674,210 cwts in July-September 2019. In the two years that followed, capacity fell by 91,548 cwts but has been creeping back up since, regaining 19,180 cwts. With several new mill projects and expansions underway, capacity appears poised to approach the previous high.

“It would be great to more effectively find a way to meet the capacity our industry already has to meet customer needs,” he said. “I think that has the potential to lead to some challenging environments as we go forward. It’s no different than the crush industry or other industries within ag that are cyclical.”

Even as he voiced caution about the sector’s cyclicality, Kruse was optimistic about milling and its long-term prospects. He spoke hopefully about opportunities across the industry to differentiate around qualities such as sustainability/regenerative agriculture and health and wellness.

“If we continue to invest in new technologies and innovate with new products and applications, that will lead to a lot of opportunities for our industry to continue to differentiate and continue to create value that can be mutually beneficial for ourselves for our customers and ultimately, consumers,” he said.

As incoming NAMA chair, Kruse offered a similarly upbeat view of the direction the association has taken under the leadership of Jane DeMarchi, the group’s president.

“Getting a strategic plan in place was huge for NAMA,” he said. “Jane and I came into the organization relatively close to each other. I think the plan was a great opportunity to shape the direction the association is going to go, and to have that roadmap out there for members and partners to have clear alignment about what we’re trying to do. The three pillars of the plan — advocacy, collaboration and engagement —is core to what we are trying to do.”

He described advocacy as work aimed at leveraging millers’ collective voice to shape regulations and policies important to members and collaboration as a chance for connectivity around technical expertise between staff and strategic partners.