Marketing Regenerative Wheat Flour in the United States
Finally, a commercial-scale grain origination program that sells field management practices to food buyers.
‘Marketing’ has always been a point of confusion in the world of commodity grain.
Farmers confuse grain elevators as their market, when ultimately, it’s consumers and broader society that dictate value and spark trends.
Commercial intermediaries just want to manage costs, when they could create market value from production reporting in some cases.
Responsibilities for industry marketing are scattered across countless institutions and farm groups, without any mandates to develop new demand segments.
Meanwhile, the demand coming at landowners for carbon and biodiversity restoration is enormous. Since carbon storage and other soil health metrics, as well as wildlife and species restoration, are location-specific, field-level traceability is going to be necessary to tap into these markets.
This report outlines a new U.S. grain origination program that pulls field management records through into packages of flour, demonstrating how it works to market regenerative agriculture as actual food. It is a case study of supply chain interactions for achieving climate-related regenerative agriculture direct sourcing commitments.
King Arthur Baking is marketing a value chain together with partners Farmer Direct Foods, Kiss the Ground, and several flour milling co-packers. The roles for each stakeholder are targeted, straightforward, and specific:
Farmers voluntarily adopt practices that allow them to use less chemical inputs and improve soil health; organize a selling group; and compile data on field activities.
Handling and processing companies segregate ingredients with environmental and nutritional advantages, and pull through the associated data.
Public awareness and policy development is undertaken by organizations with explicit mandates to fix climate-related risks in agriculture.
Let’s look closer at each node to better understand the supply chain opportunities.
Farmer Direct Foods (FDF) is an origination program for grains based in the state of Kansas. Originally founded as the American White Wheat Producers Association in 1988, Farmer Direct Foods became a co-operative marketing group in 2003. According to their website, in 2022, the group was purchased by Heirloom Brands and “transformed from a manufacturing business to a consumer-facing brand of premium, artisan-quality products.”
Regenerative wheat production is defined by FDF as “minimal tilling, crop rotation and dry farming… and planting cover crops between harvests.” They go on to state that, “FDF pays a premium to farmers…who commit to these environmentally conscious guidelines, additionally sharing a portion of profits to encourage the future of mindful farming.”
Whether or not these actions alone accomplish the claims Heirloom Brands is making is unknown, as there isn’t an outcomes-based validation system involved. Some might judge FDF’s definition as ‘not regenerative enough.’
But that’s not the point here.
This project appears to break new ground by communicating data through the supply chain so that it can be sold along with the flour. In other words, it is providing consumers with information needed to decide for themselves if the practices followed by FDF’s members truly reflect their environmental values and scientific understanding.
Also, FDF’s commitments go beyond environmental, into social and community regeneration. In addition to membership in 1% For the Planet, “Farmer Direct Foods support organizations like The Land Institute, which works to develop alternatives to current destructive agricultural practices, and Cat’s Cupboard, which provides immediate access to food and personal hygiene products at no cost to the K-State community.”
They’re spending real money doing good work that doesn’t benefit their bottom line, aka, corporate social responsibility. And it can all be easily validated by the target organizations.
Flour mills in different regions process grain for King Arthur Baking because they don’t own any. Through co-packing agreements, the mills dedicate plant capacity, and develop processes to keep King Arthur’s products from getting mixed up with commonly-produced flour manufactured at other times. Steps taken by the mill to enable field activities to be traced from the retail package may include:
Sequential processing of individual farmer deliveries.
Minimal or no blending of grain from different farms.
A lot numbering system to identify the field of origin.
Individual grain purchase contracts that itemize field data.
A digital software platform for sharing this data throughout the supply chain.
King Arthur Baking is moving towards its climate goals in a different way than the big CPG brands, who are still working off of mass-balance accounting and ‘offsets’. Offsets pay someone else to do something good to make up for something bad that the company does, so that it can keep on doing it.
PepsiCo’ mass balance accounting, for example, calculated that the ingredients used in all of their foods produced are grown on 7 million acres worldwide, and so their goal is to support farmers to adopt regenerative practices on 7 million acres. These aren’t the same 7 million acres, making it trickier to calculate the true ROI.
King Arthur’s commitment is more of an ‘inset’ - an internal change in business practice that eliminates the bad thing from happening in the first place. This research suggests that they are truly committed to sourcing 100% grain grown regeneratively because they have built all the necessary supply chain partnerships to do so by 2030.
Kiss the Ground, a U.S. regenerative advocacy group, was founded in California and is considered a pioneer of the regenerative movement, especially since producing a Netflix documentary film on regenerative agriculture’s ability to heal nature from input-intensive farming. Kiss the Ground also led the push to launch Regenerate America, a new U.S. lobby group. The two organizations undertake the high-level awareness and policy development that come together to establish new markets.
In a recent release, Kiss the Ground highlighted King Arthur’s ‘Regenerative Mission’:
“In addition to a verbal commitment or "pledge" to a regenerative future, which we hear often from large food brands, our friends at King Arthur Baking have set themselves apart through taking action. Beyond a pledge to be 100% regenerative by 2030, they have committed to actively educating their audience on regenerative agriculture and have shifted the source of their white whole wheat flour to Farmer Direct (a collective that sources wheat from farmers committed to regenerative practices).
… The baking pros have also enrolled in a 20,000+ acre regenerative pilot program with a Kansas milling partner, Ardent Mills…In a recent Instagram post, King Arthur broke down regenerative agriculture for their audience members that may be new to the concept… King Arthur is one of the Regenerate America Coalition members urging congress to support regenerative agriculture in the next farm bill.”
That is what effective industry market development sounds like.
Carrots & Sticks
The motivation for farmers to change, and a key principle of regenerative economics, is the concept of ‘carrots and sticks’, i.e. financial rewards and costly restrictions, delivered by governments and markets. For example:
The premium and profit-sharing paid by Farmer Direct Foods and King Arthur Baking is one of the first carrots to emerge in North American commodity grain markets.
Costly restrictions have been rolling out across European agriculture, hitting both landowners and suppliers of food ingredients from around the world with new sticks.
Canada’s On Farm Climate Action Fund (OFCAF) offers carrots to de-risk new land management practices.
Pulling harmful crop inputs off the market are sticks the government uses to force farmers to find better alternatives.
These opportunities and challenges are far too complex for agriculture to overcome in silos. Collaboration is better than infighting. The food system, as it pertains to grain, consists of just 3 basic players: farmers, commercial processors, and food brands. They all answer to governments and society. This case study demonstrates how collaboration across the entire supply chain can work for advancing initiatives and opening up new markets.