Bühler’s new CEO talks with World Grain about his vision for the company that he has been a part of for 28 years.
As Bühler’s senior leadership is transitioning, the company is focusing on meeting its customers’ needs and taking proactive steps to address megatrends that are impacting the global food industry on a macro- and micro-economic level.
As part of the company reorganization, Stefan Scheiber officially started as chief executive officer (CEO) of Bühler AG on July 1. This appointment was announced a year ago in accordance with the announcement that Calvin Grieder would pass the CEO title to Scheiber so that he could focus on his position of chairman of the board. Grieder, who became CEO in 2001 and chairman in 2014, was the first person outside the Bühler family to serve as CEO.
Scheiber, who most recently served as CEO of Bühler’s Grains & Food business, began with the company in 1988. Over the course of his 28-year career with Bühler, he has headed various sales and production organizations in Kenya, South Africa and Germany, living and working some 15 years abroad. In 2005, he was appointed head of the Sales and Service Division, thus becoming a member of the executive board of Bühler. In 2009, he took charge of the Food Processing Division and in 2014 of the entire Grains & Food business of Bühler.
Scheiber recently sat down with World Grain for an interview.
WG: As you move from your previous position as the Head of the Bühler Grains & Food Business to Chief Executive Officer of Bühler Group, what accomplishments are you most proud of and what tasks do you believe are most important for your successor, Johannes Wick, to address?
Scheiber: First of all, talking about accomplishments, it is not about me, it’s about the whole Grains & Food organization of Bühler, supported by our colleagues from Advanced Materials. But to answer your question, we got positive market response of having made the step from an engineering and technology company to a global provider of industrial feed and food processing solutions. We want every human being to have access to healthy food – and our mission is to create innovations for a better world. That’s our motivation; that is where we can make an impact. Today, we think in terms of entire value chains covering areas such as feed and food safety, nutrition, and sustainability. Though process engineering technology remains crucial, today we embed it in complete solutions and for this purpose have started to build service-driven business models around it. It is important not only for Johannes, but for Bühler as a whole to identify the relevant consumer, market and technology trends and to be very fast in developing customized products and services in response.
WG: Under Calvin Grieder, Bühler saw significant growth in revenue and also underwent a major reorganization of its corporate structure. What are your goals for Bühler and what strategies will you implement to achieve those goals?
Scheiber: What you call reorganization was more a simplification of our internal structures to make it easier for our customers to work with us, especially for complex projects where numerous products and technologies are involved. Based on this organization, my agenda is a combination of continuity and accelerated change. On the one hand, there’s continuity, because I have now been with this fantastic company for more than 20 years. I was part of the team that developed the current strategy, which is still in place. We don’t need a new strategy yet, but instead are focusing on the execution of the one we have already defined. Its core elements include further investments in regional service, applications centers and schools in order to be close to our customers and the closing of gaps in our solutions portfolio. In doing so, we want to maintain and even strengthen our leading position in milling, rice, optical sorting and chocolate. On the other hand, there’s accelerated change, because we will seize the opportunities presented by megatrends such as the Internet of Things or Industry 4.0. In this area, we must pick up speed. Our ultimate goal is clear: to engineer our customers’ success. That’s the basis of everything – our profitable growth above the market average as well as our ability to offer our employees fascinating job and career opportunities.
WG: What are the biggest challenges that Bühler faces in the next five years?
Scheiber: To become fast enough to capitalize on the great opportunities coming from megatrends such as digitization, mobility, healthy food or new manufacturing methods.
WG: Bühler describes itself as a thought leader in global food technology and strategy. How does the company plan to maintain and enhance this reputation?
Scheiber: We are challenged daily to rethink what we are doing, to be receptive to new ideas, and to be very close to our markets and customers. In recent years, we have put a cutting-edge innovation management process in place, which includes our customers, partners from the scientific community, and our employees. Let me give you a few examples: We are sponsoring a professorship at the Swiss Institute of Technology in Zurich (ETH Zurich) to jointly discover alternative protein sources such as insects or algae. We are a partner of the MassChallenge startup platform and booster. We have set up the Urs Bühler Innovation Fund staffed with top scientific experts. Last, but not least, we hold a so-called Innovation Challenge every other year in which all our 10,500 employees worldwide can participate. Every Bühler employee can join in and submit ideas for new products, services or business models. The top four teams are then funded to work out their proposals up to the point of market maturity. Finally, we also hold events, such as our Networking Days in Uzwil at the end of August this year, in order to bring our global community together.
WG: What are the macro-economic issues that you track most closely to help you understand the challenges that your customers and Bühler face?
Scheiber: We try to think from the end: What is driving the behavior of end consumers and what impact might this have on our customers? What impact does politics have, for instance, on regulations? How is technology changing the world? When people start refusing gluten, we can ignore this trend or shake our heads, because we know that in many cases it is basically not well-founded. But if gluten-free becomes a lifestyle, we want to offer our customers the solutions required to produce, say, gluten-free pasta to meet this customer demand. It is not up to us to judge these trends, but to ensure that our customers can take advantage of them. This is what we can influence. Then, of course, macro-economic issues such as the price of oil or the volatility of currencies also have an impact on our business. But we cannot really do much about them other than protect ourselves and our customers, for instance, by financial hedging. That’s why we focus on business opportunities, even if markets are going down or currencies are going crazy. Because, after all, life goes on, and crises often also give rise to new opportunities.
WG: How have the economic disruptions in oil-producing countries along with the turmoil in the once much-lauded BRIC nations impacted the global grain, flour and feed industries and Bühler?
Scheiber: All oil-producing countries are generally suffering from lower investment power for imports, which results in the demand of local solutions with local grains. Besides this, you have to look at each of these countries differently. Brazil went into a recession mainly because of changes in politics. Russia is suffering from the lower oil price and Western sanctions. In India, the flour and specialty milling industry has progressed well, whereas rice milling experienced a slowdown over the past two years. And China’s grain milling industry is currently hit by overcapacities, which have slowed down investments. For us this means two things: On the one hand, we must get used to securing our business in difficult market environments. On the other, we must offset shortfalls in such regions by growth in others. This is precisely the beauty of our regional setup and broad portfolio. It not only generates synergies but also mitigates risk.
WG: Bühler has invested significantly in its global network of customer service, spare parts and roll corrugating centers. Why are they so important for its business?
Scheiber: These centers will be a key differentiator for us in the future, and also a strong growth driver. Who else in the marketplace can be closer to their customers than we are? And this not only pertains physically with geographical sites, but also mentally. This network of almost 100 service stations that focus on maintenance and spare parts is just the first step. The next big thing will be business models which are truly service-driven. New technologies enable us to offer preventive maintenance.
WG: For decades, training and continuing education have played a significant role in the strategy of Bühler to develop relationships with its customers and the industries it serves. Bühler now has training centers in Switzerland (Uzwil), the United States (Manhattan, Kansas), Kenya (Nairobi), China (Wuxi) and India (Bangalore). Do you have any plans for adding more? What is the role of these centers along with that of training in the overall strategy of Bühler?
Scheiber: You don’t let interns fly an Airbus. Training and education are therefore a firm part of our business model. We offer premium high-tech products, which in the end generate a best return on investment for our customers. To ensure this return, you need to know how to make the best use of these technologies and equipment and how to optimally run the associated processes. That’s why constant training and continuing education are so important. And they will become even more important, because the knowledge of raw materials and process technologies is exploding. In the future, we will see our equipment packed with sensors generating big data. The question then is how to handle these large amounts of data, extract the most relevant information, draw the right conclusions, and manage the processes with them. I believe that big data will maybe reduce some manpower requirement because more and more operations will be automated, but that the remaining people will need ever-higher qualifications. To meet this future training requirement, I don’t see many more physical training centers, but a new e-learning world.
WG: As part of its Networking Days, Bühler has identified four core topics that will transform the grain processing industry and change the way Bühler does business: nutrition; food and feed safety; sustainability; and the Internet of Things. How does Bühler intend to address its customers’ needs in these areas?
Scheiber: These topics are the fundamental challenges and opportunities for our whole industry. We will team up with our customers and partners to find out how best to seize these opportunities and enter this new world. We are already working on initial solutions in this area.
Nutrition: We all know that the world is facing a protein gap, which will become dramatic within the next decades if we fail to act now. Pulses are high in protein and are experiencing a revival in the Western world. Soon we may see alternative protein sources such as insects and algae, where we are currently developing knowledge and technologies in our own labs and together with our partners from the scientific community. How can we produce sustainable solutions together which will benefit us all? How can we reduce the use of antibiotics to avoid intolerance of people for this important medicine?
Food and Feed Safety: Both topics belong together. Food safety begins with feed safety, and we are offering integrated solutions for both aspects of this value chain. Digitization is producing a level of transparency never known before – for example, the FDA now has an app which informs you about all product recalls. Novel process monitoring developments are presenting fresh opportunities to make processes fully traceable and thus to build trust along the entire value chain.
Sustainability: Many processes in the feed and food industry consume large amounts of energy and water. And 30% of all food produced is still lost from field to fork. How can we become more energy-efficient and optimize the food value chain to get more out of it? During the Networking Days, we will show solutions which require up to 30% less energy and even higher reduction of water consumption. However, looking at the industry in general, this is only the beginning.
Internet of Things: Bandwidth, sensors and computing power have become so cheap that we are now in a phase where everything will be interconnected and networked. Just think about how digitization has already disrupted the finance, media and telecom industries as well as tourism, trading, retailing and other areas. Self-driving cars and trucks will turn the logistics and car industries upside down. And all these upheavals stand to have a major impact also on our own industry, which is not an isolated island. We will see changes, new business models and also competition emerging that we haven’t even thought of. Bühler plans to be at the forefront of these developments – together with our customers and partners.
WG: What nutritional and dietary trends are impacting your business and how is Bühler responding to them?
Scheiber: We track consumer and market trends and respond to them by launching innovations. One global trend is the need for vegetable proteins, where we offer solutions for processing high-protein crops such as pulses or quinoa and protein texturing processes for producing meat substitutes. Demand is also increasing for tasty, wholesome, and minimally processed snack foods. Just recently, we took over Hosokawa Bepex to extend our technology portfolio for manufacturing healthy snack bars based on ingredients such as cereals, flakes, nuts and fruit pastes. On the other hand, in places where urbanization and incomes are increasing, a need exists to retain traditional food habits while adding convenience to staples. In southern Africa, for example, Bühler can deliver the appropriate process technology for giving maize (corn) quick-cooking properties. In India, where typical Atta flour is used for making flat bread, consumers are demanding that the industrially produced and packed version of this flour must have an acceptable shelf life and a trusted food safety level, a requirement that Bühler has met by developing a new milling technology. This is an opportunity to retain nutritionally valuable whole-wheat chapattis in the Indian diet despite changes in lifestyle.
