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A tale of two (wheat) markets

As markets change, exporters need to know how end buyers are using our products

Historically, Japan has been the biggest market for Canada Western Red Spring (CWRS) wheat, outside of Canada’s domestic market. But that changed in 2017, when Indonesia edged ahead of Japan.

With a population estimated to be over 260 million, the growth potential for the Indonesian market is huge. Still, Japan has been a loyal customer of Canadian wheat as well, said Yvonne Supeene, head of baking technology at the Canadian International Grains Institute in Winnipeg.

Supeene was speaking to delegates of the Combine to Customer program. Each winter, 100 or more people, mostly producers, go through the 2.5 day program. The program is extensive, covering crop breeding, grading, grain transportation, milling flour, processing various products, and how international markets use Canadian wheat and barley. It also includes a look at how processors are trying to incorporate pulses into familiar food products such as pasta. Grainews field editor Lisa Guenther was embedded in the program in late February.

As part of the program, delegates toured the bakery to learn how CWRS is used by domestic and international bakeries. They also toured the Asian noodles processing line, which shares a floor with the bakery.

The beauty of CWRS is that it works well in highly automated industrial bakeries and in smaller operations where bakers are mixing dough by hand, Supeene said. That makes it a good fit for bakeries in Japan and Indonesia.

Noodle makers in both countries rely on CWRS as well, said Esey Assefaw, head of Asian products and pasta technology at Canadian International Grains Institute.

But although bread and noodle makers in both countries use CWRS, their processes and products can vary quite a bit. Supeene and Assefaw sat down for interviews to explain what the food industries in both countries want from CWRS wheat and how they use it.

Esey Assefaw, head of Asian products and pasta technology, demonstrates the noodle-making process.
photo: Lisa Guenther

Making noodles

Noodle makers use half as much water as bread makers, Assefaw said. One of the main goals is to create noodles that keep their starch while cooking.

Beyond that, Asian consumers generally have two requirements, he added:

  • Appearance: as white as possible.
  • Texture: factors such as firmness, softness, and elasticity.

Protein content affects texture. Low-protein flour creates mushy noodles. But while a variety such as Dark Northern Spring is high protein, it creates stiff dough, said Assefaw. That’s a problem because noodle making requires stretching and folding.

Dough’s elasticity comes from the gluten. CWRS has both the strength and elasticity that noodle-makers need. Extensible flour also allows food manufacturers to add more water to the dough and stretch their dollars, Assefaw explained.

Food manufacturers also want to avoid sticky dough, he added, because their noodle lines are running at max capacity.

There are key differences between the Japanese and Indonesian noodle markets. One is the noodle texture. “So if you have ramen, the Japanese like softer ramen compared to Indonesian ramen,” said Assefaw.

Assefaw said that’s partly due to eating habits in each country. For example, pasta was introduced to Canada before many other noodles. Canadians then expected a firmer texture in any noodles introduced after pasta.

“It’s the same thing in Indonesia and Japan,” he said.

The typical Japanese noodle consumer has more disposable income, and is more focused on noodle quality. CWRS is used in Japanese ramen and high-quality products at a certain percentage that is usually constant, Assefaw said.

“The Indonesian market is a price-conscious market,” said Assefaw. Still, high-quality Indonesian noodles could be as high as 100 per cent CWRS, depending on the economic conditions at the time, he said.

Indonesian processors also use CWRS in value products such as instant noodles. Depending on the company and product, CWRS content could range from 15 per cent to 30 per cent of those noodles, said Assefaw. Other wheats are added to improve margins.

“So CWRS is acting as a kind of improver in that situation. As a carrier. As a back-bone,” said Assefaw.

In Japan, buyers like the consistency and quality of CWRS. They know what they’re going to get, said Assefaw. “And if there is any kind of slippage or any kind of change, of course they are going to notice it because it’s been always constant.”

While price is a factor in the Indonesian market, quality is key, too. Australian Prime Hard wheat was king in Indonesia, and Australian wheat doesn’t have as far to travel as Canadian wheat. But Indonesia is importing more and more CWRS “because of the quality,” said Assefaw.

The Canadian grain handling and regulatory system offers another advantage. “It’s a clean package. You know when you get CWRS wheat… you get CWRS,” said Assefaw.

Baking bread

In general, the baking industries in Japan and Indonesia are very different, said Supeene during an interview.

“Japan typically goes after Canada’s best, Canada’s finest. Highest protein, highest grade,” said Supeene. Japan will only blend CWRS with American wheat.

Yvonne Supeene, head of baking technology, demonstrates dough-making during the Combine to Customer program in Winnipeg.
photo: Lisa Guenther

Indonesia also requires high protein CWRS, but they will typically blend it with wheats from other origins.

Japan’s baking industry is very advanced and sophisticated, she said. The country has highly automated, industrialized bakeries, such as Yamazaki Baking.

Japan also has many boutique bakeries. Those bakeries have expertise and advanced techniques, said Supeene. They work with wild cultures. They retard dough, which slows the final rise. The end result is “gorgeous-looking,” artisanal breads.

“You can find green tea bread. You can find really specialized bread,” said Supeene.

Japan’s traditional bread is called shokupan. It’s a heavy, square loaf. Supeene said it is sometime sold with the crusts cut off. It’s never sold as a whole loaf, she added. Instead, a loaf will be cut in three, with each third wrapped and sold separately.

Baking processes vary between bakeries in both Indonesia and Japan, Supeene said. “But Japan has a very long fermentation process. They’re very concerned about the use of additives.”

Using few or no additives means wheat quality and gluten strength is critical, Supeene said. Japan’s baking industry depends on Canadian wheat “because Canadian wheat has that balance of strength and elasticity.”

Supeene said bread products are sold in Japan’s numerous convenience stores. It’s a reflection of how hard Japanese people work and study. “They grab lunch on the run. They grab dinner on the run. Hence the need for all these 7/11s. The culture is fascinating.”

Japanese consumers have disposable income, and are looking for indulgence products. Like Canada, Japan has an aging population. That creates a need for softer end products, said Supeene.

Indonesia’s baking industry tends to be less automated, she said. In fact, some Indonesian bakeries still operation without electricity, said Supeene, mixing dough by hand. People walk around in bare feet. Sanitation regulations are very different. Those conditions can dictate what wheat quality will work in bread making, said Supeene.

Indonesian bakeries do produce bread that looks similar to Canadian bread — pan loaves, with rounded tops.

“One of the biggest differences is that their bread tends to be a bit sweeter,” said Supeene. Indonesian bakeries use more sugar and fat in their dough. That means they need wheat with a high protein content to balance those ingredients, she explained. But they also use more additives than Japanese bakeries, so they might be able to get away with lower-protein wheat than if they skipped the additives.

Esey Assefaw shows Combine to Customer participants a bit of noodle dough.
photo: Lisa Guenther

While the country still faces extreme poverty, Indonesia’s market is rapidly growing. Supeene said that 10 or 15 years ago, there was one milling company in the entire country. When one mill holds a monopoly, “the flour is as it is. You get what you get,” she said.

Today there are over 20 milling companies. Supeene thinks that increased competition, combined with the population, is likely driving wheat consumption and the demand for higher-protein Canadian wheat.

Both markets depend on Canadian wheat and have been loyal, Supeene said. And both markets want more than a physical product.

“Service matters. They want our wheat but they also want that relationship that goes with it, that extra added service package that means so much to them.”

About the author

Field Editor

Lisa Guenther is field editor for Grainews based at Livelong, Sask. You can follow her on Twitter @LtoG.

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Comments

  • Norm

    Great article, and great work CIGI! Keep it up!