AIB International 2017 Annual Report

AIB International
Trusted Brands
Trust AIB
International

Dear AIB
International
Stakeholders,
It’s been a year since our last update and what a year
it’s been. 2017 was a year of growth and stability for AIB
International. We’ve proven to our Board of Trustees, our
customers and ourselves that we are a relevant force in the
industry and can operate a profitable business.
This last year our revenue grew 6.8 percent, which was
in line with our peers in the inspection and certification
industry. Our net income improved $3.3 million over the prior
year and strong cash flow generated 9 percent EBITDA.
So how did we do it? We strengthened the relationships we
have with our customers and worked hard to meet their
pressing needs. As a result, our strategic accounts grew 21
percent. Website sales were up 15 percent over 2016 due
to improved marketing efforts, and a successful late year
launch of our new Food Defense Coordinator Online course.
Both our loyal customers and changing regulations helped
our labeling team surpass the $1 million mark for the first
time ever.
At the same time, we got smarter about how we operate
our business. We streamlined our scheduling processes,
which reduced billed travel expenses. This was good for AIB
International, but more importantly we were able to lower
the total cost of our services for our customers.
We strengthened the
relationships we have with our
customers and worked hard to
meet their pressing needs
“
We implemented a hybrid staffing model in parts of the
world where demand is less predictable. We also executed
a larger proportion of our GFSI certification audits with
independent contractors. When combined, these moves
increased our capacity 1,000 days and reduced operating
expenses by $1.2 million. This is even more impressive
when you consider that our inspection and audit volume
increased 4.6 percent.
Internal process improvements enabled us to invoice
customers more quickly and we closed an unused legal entity
in China. The combination of these two, plus diligent follow up
on overdue invoices allowed us to pay down nearly $3 million
in debt. We also reduced our overall SGA expenses, which
allowed us to accelerate investments in forward looking
projects such as the development of more eLearning, brand
equity research and information system upgrades.
And while making these improvements, we kept our
customers and employees happy. Our net promoter scores
remained well above industry benchmarks and our employee
engagement scores increased 7 points over the prior year.
To say the least, 2017 was highly successful for AIB
International – and this is just the beginning.
Moving Forward
We’ve entered 2018 with momentum and a sustainable
business model. Now we want to “ride the wave” so we can
grow with our clients and enhance the capabilities of the
organization.
In 2018 we are investing in technology, sales and marketing,
product development, and training to further improve the
skills of our staff.
100
In 2019, AIB International will
celebrate our 100 year legacy.
Stay tuned for news
on the celebration!
In this day and age, technology is critical for any growing
business. A CRM system is the first in a series of system
upgrades that will provide needed automation and allow
for more transparent data sharing across our global
enterprise. Insights are also imperative for our customers,
so we are positioning AIB International to better leverage
data to benefit industry.
Our sales and marketing teams have launched a more
holistic go-to-market strategy called the Preferred Partner
Program. This program is a portfolio-wide approach
designed to assist our clients with the needs of their
entire supply chain. This will help us expand business
with our strategic clients, but also create valuable
partnerships with new clients.
We also launched a global, multilingual website earlier
this year. The newly designed site truly represents the
international aspect of our company, as well as being
more customer focused with chat functionality, global
credit card capability and a mobile friendly design.
More than ever, product development and marketing are
working together to listen to the needs of the market
and deliver more relevant products and services. We’re
conducting market research and transitioning more of our
training portfolio to eLearning. In addition, we’re pursuing
strategic alliances that will expand AIBI’s existing
capabilities, serve our clients closer to home and prepare
them for the future.
Our employees are also with customers every day, and
ensuring they have the latest knowledge and skills is
critical to AIBI’s success. This will also enable us to attract
and keep critical talent as we continue to grow.
AIB International is a unique technical service organization
that specializes in assisting the global food and beverage
industry. We appreciate the ongoing support from all our
stakeholders.
Andre Biane
President and CEO, AIB International
Executive
Leadership Team
Andre
Biane
President &
CEO
David
Fliss
Global VP,
Sales
Doug
Markham
Director,
People
Processes
Tom
Ogle
Chief
Financial
Officer & VP,
Finance
Jeff
Wilson
VP,
Food Safety
Services, EAA
Alfonso
Capuchino
General
Manager, AIBI
Certification
Services
Stephanie
Lopez
VP,
Food Safety
Services,
Americas
Katie
Mayes
VP, Marketing
& Product
Development
Brian
Strouts
VP,
Baking & Food
Technical
Services
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Delivering Exceptional Results
Through Online Training
In 2017, AIB International further strengthened our online training portfolio by launching six new courses.
These courses were developed with the knowledge that not every baker or food safety professional can
take time away from their facility responsibilities. Online training allows for in-depth learning without
unnecessary expense or time away from work, and investment in this area resulted in a measurable
impact on our 2017 financials.
“
The courses are well
designed and loaded with
technical information
500+ ENROLLMENTS
Food Defense Coordinator Online
Whether on the line, in the warehouse, or working
alongside the management team, protecting food and
ingredients from intentional adulteration is one of the
most critical challenges facing our global clients.
Food Defense Coordinator Online prepares a food
facility to prevent intentional adulteration. AIBI’s
unparalleled community of experts shared their best
practices to meet FDA’s Food Safety Modernization Act
(FSMA) requirements. By providing our customers with
modules on how to prepare a vulnerability assessment,
establish mitigation strategies, and maintain records,
we’ve helped them further their food protection plan.
Since launching in November, more than 500 online
enrollments have been sold.
11 MODULES
Baking Basics Webinar Series
Featuring 11 lessons designed for new bakers and
non-bakers, the Baking Basics Webinar Series is
the perfect program for those who want on-demand
training. AIBI thought of the entire training journey, so
lessons begin with baking lingo and build up to the
essential knowledge about specialized products. The
webinar series also saves time for our customers.
4 NEW BAKING COURSES
Baking Specialist Online Collection
AIBI is evolving from a provider of in person seminars to a
creator of multi-platform learning. Last fall, AIBI added four
new courses to the Baking Specialist Online Collection:
• Variety Hearth Breads Online
• Variety Pan Breads Online
• Tortillas Online
• Hamburger Buns Online
According to Brian Strouts, AIB International’s Vice President
for Baking and Food Technical Services, this collection allows
industry professionals to curate their own education based
on their needs.
“The Baking Specialist Online Collection is one of the best
offerings at AIBI,” Strouts said. “The courses are well designed
and loaded with technical information crafted specifically for
up-and-coming bakers.”
As a leader in both grain-based foods and food safety, AIBI
is focused on providing more online learning in our core
markets.
Keep an eye out for these online product
launches:
- New! FDA Food Labeling Online – April 23 release
- Updated! Food Safety Essentials – available in English
and Spanish, Summer 2018
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Partnering for Success
“GFSI certification audit volume continues to grow for AIBI-CS,” said Alfonso Capuchino,
General Manager, AIBI Certification Services. “And our certification offerings will
continue to expand as more companies strive to improve their food safety programs.”
While AIB International’s food safety
business grew in 2017, our certification
body also realized growth. AIBI
Certification Services, a wholly owned
subsidiary of AIB, saw significant yearover-year
growth in these areas:
• BRC audit days increased 15 percent
• SQF audit days increased 14 percent
• FSSC audit days increased 23
percent
The total growth in certification
audit days from 2014 to 2017 was 10
percent.
“GFSI certification audit volume
continues to grow for AIBI-CS,” said
Alfonso Capuchino, General Manager,
AIBI Certification Services. “And our
certification offerings will continue to
expand as more companies strive to
improve their food safety programs.”
Both audits and inspections are
important to a company’s food safety
programs.
“
Certification audits ensure that
a well-developed management
system is in place. Having
such a system in place helps
organizations achieve their food
safety goals.
On the other hand, AIBI’s GMP
inspection is focused on a more
complete assessment of one
component of the management
system, the implementation of
prerequisite programs. During
an inspection, AIBI’s food safety
professionals often uncover a
weakness or gap. He or she
can immediately begin an
investigation and consult with
the client to determine how to
mitigate the risk.
Due to the benefits of each,
many clients choose to do both
a certification audit and a GMP
inspection.
Companies committed to building a strong
food safety culture realize that they need
both a management system audit and a
thorough and detailed physical inspection
“Companies committed to building
a strong food safety culture realize
that they need both a management
system audit and a thorough and
detailed physical inspection to realize
success,” said Stephanie Lopez, Vice
President, Food Safety Services,
Americas, AIB International. “These
companies reap the benefits of
having both a documentation-focused
audit and a physical inspection. They
receive a more rounded assessment
of the food safety level in their plants.”
For AIBI, revenue from GMP
inspections was also up 9 percent,
which speaks to the strong demand
for both inspections and certification
audits.
As AIBI’s Certification Services grew
in 2017, our staffing approach also
evolved to allow more flexibility.
Our certification team utilized more
approved contractors to extend our
global reach and serve markets where
we wouldn’t otherwise have had
staff. Contractor utilization allows
AIBI-CS to adjust to market forces and
responsively serve our customers.
AIBI-CS is already working toward
meeting the 2018 goal to expand
our certification capabilities with
the addition of the BRC Brokers and
Agents and IFS Logistics audits. We’re
also actively pursuing the expansion
of our capabilities with key alliances
in Latin America and Europe.
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“
With Nutrified Labels, our clients
can be completely confident that the
information they receive from AIBI is
compliant with the latest regulations
The
Perfect
Label for
Further
Growth
2017 was a blockbuster year for AIB International’s Food Labeling group,
as they exceeded expectations and surpassed $1 million in revenue for
the first time ever.
“I want to congratulate Labeling Services for blowing their revenue
goals out of the water and and delivering outstanding results for our
business.” said Andre Biane, President and CEO, AIB International.
AIBI’s Food Labeling group conducts compliance reviews and can
provide nutrition panels, ingredient statements and allergen disclosures
using our Nutrified Labels database. Designed for compliance with US
regulations, the database helps AIBI’s labeling experts quickly calculate
and verify the nutrition information for clients’ products and efficiently
compile a compliant ingredient listing for placement onto a food label.
Information generated by Nutrified Labels can also be used by our
Canadian partner to develop information compliant with Canadian
regulations.
By now most food companies know that the nutrition facts panels on
their food labels must change following FDA’s new regulations. Though
the proposed compliance dates have been moved out to January 2020,
it’s best to not wait to update your labels – which was the message AIBI
delivered to the market last year.
To prepare for market demand, the organization
ramped up marketing efforts – including the first
ever Facebook Live event for AIBI – and updated
its Nutrified Labels database.
“With Nutrified Labels, our clients can be
completely confident that the information they
receive from AIBI is compliant with the latest
regulations,” said Elaine Meloan, Manager of AIBI’s
Food Labeling group. “Our team of experienced
labeling professionals has been trained on the
new requirements and are able to critically
analyze the database information supplied by
ingredient manufacturers to ensure that the final
label information is correct.”
Into the future
The Food Labeling group continues to satisfy AIBI
customers well into 2018, and will continue to
encourage companies not to wait.
“Food labels are a foundational tool that food companies
use to communicate with consumers about their product.”
Meloan said. “Smart companies will want to continue to make
transitions without delay.”
Some companies also prefer to update and maintain their
own food labels, so we host instructor led seminars and
recently launched online learning.
Food Labeling Online, released April 23, covers food labeling
basics and how to comply with FDA labeling requirements.
The course has five modules with interactive built-in quizzes,
and following each module there is an exam. The course
describes how to declare ingredients, how to calculate
servings per container, what FDA recognizes as dietary fiber,
how to identify sweeteners, and much more. Customers can
also benefit from the module on food labeling claims.
With it’s second to none experts and proprietary Nutrified
Labels database, Food Labeling will continue to be a hot area
for AIBI well into the future.
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Judy
Abrams
Senior Vice
President &
Chief Financial
Officer
Gateway
Region YMCA
Barry
Clayton
Senior Vice
President,
Bakery
Ingredients
AB Mauri
North America
Brad
Allen
Vice President
of Operations
Ardent Mils
Jeff
Dearduff
Corporate
Director, Baking
& Snack
The Austin
Company
Greg
Boyd
Vice
President of
Manufacturing
Flowers Foods,
Inc.
Brian
Dwyer
Director,
Manufacturing
Operations
Kroger
Company
Dear Friends and Colleagues,
When AIB International was founded nearly 100 years ago, the food industry was very different than
what it is today. Innovation has changed the way we, and the consumer, look at food. The supply
chain has increased in complexity and many more people today depend on commercially produced
food that is safe to eat.
In this age of 24/7 information, consumers are more engaged than ever before. There are unlimited
sources for nutrition and the background of ingredients. Product news, especially bad news, travels
very fast. Social media is consumer research in action, which can both help and create challenges for
companies attempting to lead their food categories, geographic markets, or channels.
Board of Trustees
Todd
Larson
Vice President,
Operations
Henningsen
Cold
Storage Co.
Richard
McGrath
Partner
Lockton
Companies
John
Riesch
Director
Lesaffre Yeast
Corporation
Chair
Donald
Thriffiley,
Jr.
Principal
KAT
Management
Group, LLC
Michael
Leikam
President &
CEO
Centralized
Supply Chain
Services, LLC
John
Morris,
PhD, CPA
Associate
Professor,
Director of
MAcc Program
Kansas State
University
Ramon
Rivera
Senior Vice
President
Operations,
North America
Bimbo
Bakeries USA
Nick
Weigel
Vice President,
Technical
Services
ADM Milling
Company
Michael
Martin
Vice President,
R&D/Quality
The Bama
Companies
Pat
Murphy
Director,
Supply Chain
Leader – C&F
General Mills,
Inc.
Craig
Slavtcheff
Vice President,
Global R&D –
Biscuits & Snacks
Division/US
Biscuit & Bakery
Group
Campbell Soup
Company
Campbell
Williams
Director of
Operations
BCW Food
Products, Inc.
The consumer is more aware and wants to know where their food and beverages come from and if
the contents are authentic. And as consumers seek more locally sourced foods and different ethnic
cuisines, today’s centralized, low cost manufacturing model is being challenged.
More comprehensive food safety regulations and market driven certifications for safety, authenticity,
and transparency add to the challenges. Functions supporting manufacturing are playing a larger and
more visible role as everyone works to comply with government standards designed to protect the
public.
For the food industry, these are all relatively new obstacles that have already caused a significant
impact on the production and go-to-market strategies of every conventional food and bakery
producer.
But it’s challenges like these that AIBI thrives on. Over the last 100 years, we have adapted how we
train and leverage our technical expertise to match the shifting needs of the food industry. We’ve
grown alongside our clients, while building the technical capabilities of the industry leaders of today
and tomorrow.
AIBI helps food and baking companies with almost every aspect of their operation, from research
and development, to nutritional guidance and labeling, to quality control and assurance, to good
manufacturing practices and food safety certification. Not to mention ensuring all employees are
properly trained along the way. AIBI’s global offerings feature a multi-cultural team of technical
experts in tune with the fast pace of change that faces the food industry.
In 2018, the Board of Trustees and AIB International’s President will continue to lead AIBI’s long term
growth strategy. It’s simple: continue building meaningful relationships with our clients, provide
relevant services and products at the “speed of the customer,” and upgrade our information systems
to streamline processes and leverage data for the good of the baking, food, and beverage industries.
It remains a privilege and honor for me to serve as the Chair of AIB International’s Board of Trustees.
Lucy
Williams,
CFP
Vice President
& Trust Officer
John N. Riesch
Chair, AIB International Board of Trustees
The Trust
Company
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AB Mauri
Cain Food Industries, Inc.
Lallemand/American yeast Div.
ADM Milling Co.
Consumers Flavoring Extract Co., Inc.
LeMatic
Alpha Baking Company
Dawn Food Products
The following
companies salute
the activities of
AIB International
by sponsoring this
section.
AMF Bakery Sysytems
Ardent Mills
Dunbar Systems Inc.
DuPont Nutrition & Health/Danisco
Lesaffre Yeast corp./Red Star Yeast
Manildra Group USA
Mother Murphy’s Laboratories, Inc.
Bay State Milling Co.
Flowers Foods, Inc.
Formost Fuji Corp.
Malt Products Corp.
B.C. Williams Companies
Gemini
Rotella’s
Bedford
Gonnella Baking Co.
\
Siemer Milling Co.
Brolite
Great Plains
Sosland Publishing Co.
Bundy Baking Solutions
Burford Corp.
J&K Ingredients
Turano Baking Co.