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Summary
The global wheat market has faced both challenges and growth since 2020. As the second most produced cereal in the world with 735 million tons, wheat has seen a decline in milling activities due to the COVID-19 pandemic, with an estimated drop in activity of -30% to -50%. Despite this, wheat exports have increased, with the port of Rouen in France seeing a 24% rise. However, France experienced its third worst wheat harvest in 25 years due to adverse weather conditions in autumn 2020, with a 26% decrease. The organic wheat segment in France has shown a strong dynamic, with wheat constituting 36% of organic field crop volumes. France remains a key player in the wheat market, ranking 6th globally in production and maintaining a positive trade balance.
The European market, where wheat accounts for 45% of total grain production, has continued to focus primarily on wheat. Despite the challenges posed by the pandemic, the wheat sector exhibits resilience with fluctuations in production and exports influenced by various exogenous factors.
Main trends in the Wheat market demand
Wheat consumption remains a key component of human dietary habits in the targeted country, serving as the backbone for essential food products such as bread, biscuits, and pasta. This primary demand stems from human consumption, which takes up approximately 60% of the domestically produced wheat. The demand for wheat is not just limited to human consumption; nearly 30% caters to the animal feed market, displaying the wheat's versatile role in the agricultural and food industry. The increasing demand for high-quality wheat for human consumption significantly influences the market trends. Europe has been a prodigious producer of wheat, especially for use within the continent, showcasing strong regional demand. Specifically, the European Union alone has produced around 150 million tons of wheat, with a considerable portion of this production going towards human food products. Another impactful trend is the rise in bakery and biscuit industry in the country.
Despite a temporary setback due to the pandemic with a minor decline in industry revenue, there has been a consistent upward trend, excluding 2020, in the turnover of bakeries and pastries. This rise correlates with the consumption habit of French people, with a striking 95% eating bread at least once a week. As for the positioning of wheat-based foods within the market, a significant 62.8% of the domestically produced flour is utilized in bread-making industries, indicating a robust and prevailing demand for wheat as a raw material. Animal feed is another substantial segment driving wheat demand, with wheat grains, due to their low water content and high protein levels, being an excellent alternative to oilseeds in feed recipes. Wheat accounts for between 16 to 19% of the total domestic harvest applied to feed, indicating consumption of 6-7 million tons solely for this purpose. It is important to note that demand for wheat is not just a domestic affair.
France, for example, has become a significant player in the export market, exporting wheat worth 4.1 billion dollars. Algeria stands as the top import destination, accounting for 29% of the French wheat export, followed by Belgium and the Netherlands. The demand for wheat and its derivatives has remained relatively stable over the past few years, despite the challenges posed by the COVID-19 pandemic, which caused disruptions but also presented new opportunities, such as increased exports and an uptick in industrial pasta sales. The wheat market, therefore, reflects robust demand supported by a stable human consumption base and a steadily growing need for wheat in animal feed.
Key players in the wheat and flour production market
The wheat and flour production market is host to a diverse array of players, from agricultural cooperatives to private entities and specialized feed producers. These companies play crucial roles in different segments of the market, ranging from wheat cultivation to processing and distribution.
- Agricultural Cooperatives Agricultural cooperatives have a significant presence in the market, representing the collective interests of farmers and playing a crucial part in wheat production and distribution.
- Axereal, one of the prominent cooperatives, not only supports its member farmers in cultivation but also actively participates in the processing and global distribution of wheat.
- Similarly, Invivo, a large cooperative group, reinforces the strength and stability of the market with its multitude of services for its farmer members, engaging in trade and marketing of agricultural products.
- Cooperatives like The Gouessant and Vivescia exhibit considerable activity in the sector, contributing to the economy's agricultural backbone by providing resources, services, and distribution channels necessary for efficient market function.
- Axereal, one of the prominent cooperatives, not only supports its member farmers in cultivation but also actively participates in the processing and global distribution of wheat.
- Private Groups - Private groups in the industry include Bellows and Advens, companies that have carved their niches within the marketplace. These companies often bring innovation and competitive strategies to the sector, necessary for maintaining a dynamic and robust market capable of meeting different demands and challenges.
- Animal Feed Producers - Animal feed producers like Nuwen Animal Nutrition and Euralis have specialized focuses within the market, primarily targeting the production of high-quality feed for livestock—an essential sector given the substantial portion of wheat used for animal feed. This specialization allows them to cater to the needs of the animal husbandry sector with precision, contributing to the overall efficiency of the wheat market.
- Millers and Feed Mills - The market for processed wheat flour is catered to by milling firms, with companies such as Bread Observatory leading the pack. These mills are fundamental to transforming raw wheat into flour, which is a critical ingredient for numerous food products consumed globally. Specialized mills like these meet the demands of bakers and other food producers, ensuring a steady supply of this essential commodity.
Each of these market players, whether they are involved in the initial production of wheat or the final processing into flour and feed, contributes to a complex and interlinked market system. Their roles are vital not only to the agricultural and food sectors but also to the overall global economy, nourishing populations and supporting countless livelihoods.
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- Number of pages : 30 pages
- Format : Digital and PDF versions
- Last update : 21/04/2021
Summary and extracts
1 Market overview
1.1 Definition and scope of the study
Wheat is a cereal of the grasses used for human consumption and to a lesser extent for animal feed. The human consumption (bread, biscuits, flour-based products and raw wheat) represents the main outlet with nearly 60% of the harvest This is followed by animal consumption at nearly 30%. The other outlets are linked to u industrial sages (starch and gluten) as well as to substrate uses for the biofuel and bioethanol production .
There are two types of wheat on the market:
- Durum wheat It is produced mainly in Europe, North America and the Middle East, is very rich in gluten and is used for the production of semolina and pasta.
- Soft wheat/bromegrass The most important one is produced in China, India, Russia, the United States and France to make flour for bread.
The wheat sector is concentrated around producers, processors and distributors. Producers can be individual farmers or larger farms. In France, these farmers are generally members of cooperatives which collect, process and sometimes distribute . The remainder of the distribution is carried out exclusively in the networks of mass distribution . At the global level, the China is the leading producer of wheat with over 130 million tonnes produced (i.e. about 18% of the total), ahead of India, Russia, the United States and France.
The sector is essentially made up of large agricultural cooperatives, generating several million euros in turnover and themselves bringing together farms and individual farmers. These players are looking for export growth drivers because it is complicated to maintain and improve margins in France under pressure from large distributors who do not want to impact on consumer price increases.
The wheat sector is an underlying market of the cereal sector which is a volatile market as it depends on several exogenous factors influencing volumes and prices. In France, a 34% growth compared to 2017 was observed in soft wheat production with a volume of exploitation representing more than 10% of the total area of France (soft wheat representing almost 20 times the production of durum wheat in France). The wheat market is subject to climatic conditions but also to political measures (financial aid) and legislative measures impacting the way of production and the necessary quality.
List of charts
- Production de céréales par type
- Production de blé par pays
- Exportations de blé par pays
- Répartition de la farine du marché français en fonction de son utilisation
- Evolution du chiffre d'affaires des boulangeries / pâtisseries par année (code NAF : 10.71)
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Latest news
Beer: now world leader, Soufflet wants to make malt greener - 15/11/2023
- Malteries Soufflet has acquired 100% of Australia's United Malt through a €1 billion investment.
- Following the purchase, the division of the InVivo group became number one in the sector, with 41 plants and a quarter of the world market.
- Malteries Soufflet has opened operations in new countries, including North America and Australia.
- Craft beers account for 15% of beer sales worldwide
- Malteries Soufflet expects craft beer consumption to pick up again in less than two years
InVivo, the cooperative turned giant - 04/07/2023
- InVivo is an agricultural cooperative giant with sales of 12 billion euros.
- InVivo has reached agreement to buy United Malt Group (UMG)
- The purchase of UMG is estimated at over 1 billion euros
- Following this transaction, InVivo will become the world's leading maltster.
- The global beer market, in which malt is a key ingredient, is experiencing dynamic growth.
- InVivo doubled in size following the merger with family giant Soufflet, reaching sales of over €10 billion.
- InVivo has over 13,000 employees and more than 90 industrial sites.
- It was formed from the union of 185 agricultural cooperatives.
- InVivo owns 76% of Teract, a distribution subsidiary.
- The initial merger that led to the creation of InVivo took place in 2001 between Sigma and Uncaa.
Beer: Malterie Soufflet wins United Malt and becomes world champion - 03/07/2023
- Malteries Soufflet has become the world leader in malt, with almost a quarter of the global market.
- The company paid 1.5 billion Australian dollars (nearly 1 billion euros) to acquire United Malt Group, the 4th largest malt company in the world.
- With this purchase, Malteries Soufflet has doubled its activities.
- The purchase adds 12 processing plants to Malteries Soufflet's list of 29 industrial sites, located in Canada, the United States, Australia and the United Kingdom.
Beer: €1 billion takeover bid by Malteries Soufflet for Australian malt champion - 31/03/2023
- Acquisition of United Malt Group (UMG), the world's fourth-largest malt producer, for 1 billion euros
- - Malteries Soufflet sales after acquisition: 2.2 billion euros
- - Worldwide malt market share after acquisition: approx. 20%
- - Annual growth in beer market: 2 to 3%
- - Sales of InVivo, owner of Soufflet: 12 billion euros
- - InVivo: operations in 38 countries, 90 industrial sites, including 63 in France
- - 93% of malt used by the beer industry
France's InVivo to become world leader in malt - 31/03/2023
- Recent acquisition of La Malterie du Château by InVivo.
- Exclusive negotiations between Malteries Soufflet and United Malt Group (UMG) for a potential takeover.
- The deal could be finalized within three to six months.
- InVivo has sales of 12 billion euros.
- Malteries Soufflet would become the world's leading maltster, with annual production of 3.7 million tonnes and a 20% market share.
- UMG valued at 1 billion euros
- Expected beer market growth of between 2.5% and 5% over the next five years.
- According to IWSR, beer accounts for 75% of global alcohol volumes.
- Whisky market growth between 5% and 6% per year.
- Geographical complementarity between Malteries Soufflet (Europe, Latin America, Africa) and United Malt Group (Australia, Canada, New Zealand).
The InVivo group creates a wheat division called Episens - 06/02/2023
- More than 2400 employees
- 24 production sites
- Division sales €892 million in 2021-22
- With Episens, creation of the wheat division with the merger of Invivo's milling activities with Moulins Soufflet, and the ingredients activities of AIT ingrédients and Soufflet Biotechnologies
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