On May 15, Savage Companies and Bartlett and Company announced a merger agreement that will bring Bartlett Grain Co. and Bartlett Milling Co. under the umbrella of Salt Lake City, Utah, U.S.-based Savage, a logistics and transportation company. Two days later, The Mennel Milling Co. announced it had reached an agreement to acquire Keynes Bros., Logan, Ohio, U.S. Keynes operates a flour mill in Logan as well as several country elevators.
As noteworthy as the rapid-fire pace at which the transactions were announced, is the remarkable legacy of the three milling companies involved. It is difficult to imagine any other U.S. industry in which combinations of companies with such rich heritages would still be possible in 2018. Keynes Bros. origins date to 1855, with the first Keynes family member (Robert W.) acquiring a mill in 1869. The business has remained in the Keynes family for five generations. Mennel Milling also is a five-generation business, established in 1886 in Fostoria, Ohio, U.S., where the company is still headquartered. Kansas City, Missouri, U.S.-based Bartlett is the newest company of the three, having been established “only” 110 years ago and entering the milling business still far more recently.
Despite the age of the businesses, all three companies have meaningfully built on their legacies during the past generation. Keynes Bros. nearly doubled the capacity of its Ohio mill in 1999, and Bartlett in 2007 acquired one of the most technologically advanced flour mills in the United States, in Wilson’s Mills, North Carolina, U.S. Mennel has been active over the past generation both in constructing new flour mills, modernizing its existing facilities and in expanding through acquisition in the Central states and the Southeast.
The entry into milling ownership of a new player — Savage Companies — is also of great interest. Even considering the changes that have transpired in milling over the last half century, the appearance of Savage represents something new. For decades, the parent organizations of flour milling companies have had origins essentially in one of three businesses — flour milling/grain processing, food processing or grain. Savage breaks this mold, with its focus principally on rail, truck and marine transportation, logistics, materials handling and other industrial and environmental services. For their part, Bartlett executives have emphasized the similarity of the two companies' cultures as a key to the decision to merge Bartlett’s grain and milling businesses with Savage. The transaction also should be viewed as affirming the importance transportation plays in milling economics. This influence has been key to the gradual shift of flour production assets toward population centers. More recently, surging costs and uncertain availability have brought ever greater attention to the importance of transportation in milling (and across the food industry). Bartlett’s partnering with a transportation specialist injects a potentially powerful new dynamic into milling’s competitive landscape.
Also worthy of note in the two transactions was the absence of the participation of the industry’s largest milling companies. That Savage was interested in acquiring a mid-size milling company and Mennel’s continued growth both testify to the viability and even attractiveness in 2018 of regional companies — a hopeful sign for milling. Bartlett, Mennel and Keynes combined account for roughly 6 percent of U.S. flour milling capacity. At a time when flour demand trends have been disheartening, the significant investments in milling by Savage and Mennel represent a welcome and encouraging sign.