You are here: Home / About Us / What is Value-Added?

What is Value-Added?

Value-Added is the process of taking a raw commodity and changing its form to produce a high quaility end product.

Value Added Wheat Bread

Value-added is the process of taking a raw commodity and changing its form to produce a high quaility end product.

Value-Added is defined as the addition of time, place, and/or form utility to a commodity in order to meet the tastes/preferences of consumers. In other words, value-added is figuring out what consumers want, when they want it, and where they want it – then make it and provide it to them.

Value-added provides substantial benefits:

  • Increased ability to capture a percentage of the farm-to-retail price spread.

A typical loaf of bread for example:

  • Wheat represents less than 9% of the retail value.
  • Milling, baking, and related activities represent almost 65% of the final value.
  • The rest is transportation and retail mark-up.