AIB Annual Update:

STATEMENT FROM JAMES MUNYON, APRIL 14, 2009

As is evident in the 2008 annual report that follows, we at AIB International take great pride in the accomplishments of last year and are confident that further important progress will be made in 2009. In view of the extraordinary events that took place subsequent to yearend in connection with the recall of peanut products from a processing plant owned by Peanut Corporation of America, I believe it is important to share some updated thoughts with the industry we serve.

AIBI inspections have been an important component in the prevention of intentional and unintentional contamination of food for many years. We have assisted the food industry with safety audits and education since 1948, which was when the Food and Drug Administration began to systematically enforce its regulations.

During those 60 years, AIB has established its food safety inspection programs as a benchmark of quality and set a standard of dedication in providing effective tools for teaching food industry employees and their managers the principles and best practices for the production and handling of safe food.

AIBI’s response to its being pulled into the peanut products recall situation through its inspecting of P.C.A. facilities up until August 2008 will be the ongoing pursuit of a strategy of continuous improvement to our operational methods; to contribute significantly to the national debate about how to improve food safety in the United States; and to correct misrepresentations that entered the public record in the wake of the P.C.A. tragedy. A key platform of this strategy will be our recent completely updated Consolidated Standards for Inspection, announced in late-2008 for implementation on Jan. 2, 2009. Please visit the AIB web site www.aibonline.org for additional information on these and related matters.

Our permanent staff of more than 100 professional and well-trained field-based inspectors will continue in their efforts to deliver one of the best resources available to the food industry around the world. In particular, AIBI will:

• Identify regulatory reforms and improvements to strengthen the overall food safety system.

• Facilitate discussions among food industry customers, trade groups, manufacturers, retailers, government and academia that will identify opportunities to enhance the U.S. food safety system.

• Explain AIBI’s role in protecting the U.S. food supply, the overall food safety system and the important role played by third-party audits. Specific to this, we are in the process of conducting a series of webinars for our customers and have been pleased by the positive response that has been generated.

• Improve our own programs. For example, we will extend the time required for an inspection under the auspices of AIBI’s newly-revised standards; make requirements for a "Superior" rating more stringent; further delineate the difference between announced and unannounced inspections; and clearly state the numerical score achieved on the audit certificate.

Being drawn into the P.C.A. situation with its tragic outcome, and at times being represented so unfairly, has not been a comfortable situation for AIB International. That much is obvious. But if the eventual outcome is that the situation accelerates the development of stronger food safety programs in the United States and their related training and overall enforcement where the authority of the F.D.A. is harnessed in some manner with the power and value of third-party audit programs, then much will have been gained. I am confident that such a positive outcome will indeed take place.

Munyon sees strength in updated consolidated standards

AIB expands capabilities and expertise as organization grows internationally

Solid demand for almost all of AIB International’s service offerings drove results in 2008, said James Munyon, president and chief executive officer of AIB International. As a result, AIB channeled revenue growth into reinvesting in core strengths to keep services relevant and updated in a dynamic marketplace, Mr. Munyon said.

One of the biggest events and efforts of AIB during the past year was the revision of the AIB International Consolidated Standards. AIB integrated U.S. and European regulations and best practices, Mr. Munyon said. The new standards represent the efforts of more than 100 employees and dozens of international customers and uses, he said. Instead of being called "The AIB Consolidated Standards," the updated product is entitled "The AIB International Consolidated Standards for Inspection."

"Time will tell, but I believe the revised standards will again be an important tool to improving food safety worldwide for AIB," Mr. Munyon said. "This effort is again an example of AIB reinvesting in its core services to assist our customers worldwide in improving global food safety."

AIB also focused on improving the education program in both the School of Baking and food safety education.

Mr. Munyon said the audit program was the largest growth vehicle for AIB in 2008 as the organization expanded its positions in Europe, the Middle East, Latin America and the Asia Pacific region.

He noted that one of the largest challenges was rapidly expanding audit services to include additional audit schemes. In 2007, AIB added the ISO 22000 scheme to complement products in Europe, and in 2008 the GFSI scheme was added to provide North American customers with both the BRC and SQF options. He said this required the commitment of more than 20 North American auditors and a more than $200,000 investment in fees and training time from AIB.

The organization also is making sure it is multi-lingual in many departments to better deliver educational and audit services worldwide. He said as they add audit staff they look to expand expertise from different food categories so they may better serve customers who process or manufacture multiple product lines.

"Certainly becoming more international changes the organization," Mr. Munyon said. "For one, the world food supply is becoming more global, and while we have much to share from North America we have much to learn from other developed markets as well. This was demonstrated while revisiting our AIB International Consolidated Standards where we paid special attention to the insights and input from our international auditors and customers. This resulted in a more user friendly, logical order and a globally usable tool for the food industry."

When it comes to the School of Baking, the AIB Endowment Campaign passed the halfway point in its goal of $2.5 million. Since the beginning of the campaign in October 2007 $1.26 million in pledges and cash has been raised.

Donations have come in even more quickly than expected, as the entire effort was planned for five years, and AIB reached 42% of its goal only nine months after the start of the campaign. The early progress has been made possible by large contributions from Russell T. Bundy Associates, Butterkrust Bread, Dawn Food Products, Weston Foods, Flowers Foods and Schwebel Baking Co.

"We are honored and greatly gratified to receive such strong support from companies and individuals we have approached thus far," Mr. Munyon said. "The industry’s support to the School of Baking has been amazing … We look forward to continuing our campaign over the next several years to assure the long-term continuation of the School of Baking’s contributions to baking science and leadership in the baking industry."

Mr. Munyon said the Institute has made a major commitment to several of its educational products, including the resident Baking Science and Technology program. He said effective delivery to adult learners and the changing mix of the student population presents opportunities for improvement. He said the staff has been working hard to economize the time requirement, organize the flow of the learning material and increase the level of student interaction to improve the overall learning experience of students.

In terms of financial results, Mr. Munyon said the Institute expects the first half of 2009 to be below last year, when AIB posted 7% growth in revenue, but hopes to see a pickup in the second half of 2009.

"This year will be a different year from the last several … we have a major economic downturn that is forcing all industries, including the food industry, to be cautious with its expenses," Mr. Munyon said. "This reality will no doubt affect our educational attendance."

He described the next year or two as being "transitional" in nature as AIB will be working to assist customers in achieving a successful outcome. He said food safety audit services are at a "highly dynamic" period in the food manufacturing industry.

"Global food sourcing and consolidation increase the demand for more standardization and continued improved food safety results while at the same time meeting expectations for solid cost control," Mr. Munyon said. "This is putting a tremendous load on the food manufacturing companies. As food manufacturers strive to find the right balance to meet these expectations, our job at AIB as a service provider is to assist in this tough balancing act."

School of Baking reaching out to busy industry leaders

As ‘guardians of industry knowledge,’ AIB is updating teaching methods

Kirk O’Donnell, vice-president of education, said AIB International takes its responsibility to provide the most extensive knowledge base in the industry seriously.

"We feel responsible to be the guardians of industry knowledge," Dr. O’Donnell said. "There is a lot of history in baking … The industry looks to us to be up to date and also to keep that tradition going, so we feel great obligation with that. But at the same time the industry is changing so fast, we want to change with it. Our biggest challenge is to be able to deliver what we do and what we are trusted to do and yet be innovative with a very limited staff and budget."

Part of this innovation comes from looking into how to most effectively reach out to busy individuals in the industry. In today’s world, many in the industry don’t have the time to get away from the plant and participate in a resident course, Dr. O’Donnell explained. In order to do this, he said the School of Baking is adding more in terms of on-line components to courses, offering customized courses through contract work, and is taking advantage of multi-tasking with various technologies to be able to cover the same materials in a shorter amount of time. In general, the trend is toward less lecture-based education and more interactive and hands-on methods.

"In the short term we’re trying to make sure we’re doing the right thing with what we have," Dr. O’Donnell said. "We believe very strongly that being innovative doesn’t mean leaving behind what you are doing. It’s discarding some of the things that are no longer relevant, but primarily protecting your base. We think by doing that there will be some new things that will spin off."

Dr. O’Donnell said one of the new concepts to spin off will be more specific training for the first-line supervisor. He said many of those in the industry who come to AIB are at the department head level and are plant managers. He said first-line supervisors may only take the correspondence course, and AIB wants to provide more support to allow them to improve their skills.

"We are doing a lot of changing in our teaching techniques," Dr. O’Donnell said. "We feel like the customer base is changing, and how we teach we think needs to change."

As an example of change, the maintenance engineering course has been available at AIB for 25 years, but recent enrollment numbers have been low with only about 100 people participating.

"We’ve seen in recent years the attendance in our programs has been declining," Dr. O’Donnell said. "We’ve taken a look at that pretty closely in the last year or so, and we are going to do some redesign work that will make it a little easier for more people to use us."

To rework the maintenance engineering program AIB has been talking to industry leaders, determining their needs and working to create a distance learning program to meet as many of those needs as possible, Dr. O’Donnell said. The plan is to offer a distance learning component, and what AIB can’t offer through distance learning will be offered through a seminar or short course. In 2009, AIB is offering the traditional maintenance engineering program with minor adjustments, but in 2010 it will roll out the new program.

With increased on-line education, the Institute plans to provide a help option with courses so students may receive feedback on any questions they might have, Dr. O’Donnell said.

He said programs with the highest enrollment are career path programs, and this concept is popular internationally as well. Such education programs are adapted to different markets throughout the world and are taught using products relevant to the host country. He said while AIB has critical industry knowledge, it has to think locally when it comes to how to apply this knowledge in various countries.

Dr. O’Donnell said growth in the School of Baking has been and will continue to be almost entirely in the international arena, especially in places such as Latin America, Korea, Singapore, India, China and even the Middle East.

Overall, Dr. O’Donnell said enrollment in School of Baking seminars exceeded budget by 21 during the last year with 568 people taking the seminars and billing out over $600,000 in seminars in 2008.

"Because the industry knows who we are, the most important thing we can do is make sure we have a quality program — make sure what we are doing and teaching is applying skills that are going to make a difference in helping companies survive and flourish in uncertain economic times and grow in the long-run," Dr. O’Donnell said. "I am pretty satisfied with the efforts we are making. We are not there yet, but we are continuing to improve our program."

The endowment fund for the School of Baking has made significant progress in the past year as it met the half-way mark, and Dr. O’Donnell is optimistic about the results.

"I feel very comfortable that in the next year we’ll meet our goal," he said.

Global expansion in Asia and Latin America is key

AIB is working to restore confidence in the marketplace both domestically and internationally

In 2008, AIB focused much of its international efforts on Asia and Latin America, and William E. Pursley, vice-president of food safety and international development, said there will be a similar focus in 2009.

Specifically, in 2009 AIB will expand offerings in Argentina and Brazil. Mr. Pursley said it will be relatively simple to expand in Argentina, but it will be more difficult to increase offerings in Brazil because that will require more translation work.

Mr. Pursley said AIB has had significant success in Malaysia recently as the first course in the country had more than 70 participants, and attendance had to be limited due to the size of the room.

"It tells me we don’t know the need in that region," Mr. Pursley said.

AIB also is considering additional courses in Malaysia as well as in Singapore, Vietnam and Thailand. Elsewhere in Asia, Japanese classes are going well, and Mr. Pursley said there will be continued growth in the Chinese market.

He said those in the industry in China know what programs are needed, but they don’t know how to implement them or often simply aren’t implementing them. Some equipment in this part of the world is designed in a way that is difficult to maintain and clean, which leads to food safety issues. This issue opens the door for AIB training in China.

"They lack a lot of understanding of what food safety and all the prerequisites are and how to implement them," Mr. Pursley said. "They are very good people, and they want to learn. That’s why it’s so encouraging to us when we go over there — it’s always very rewarding because we know we’ve moved the bar a little higher for them when they attend our courses."

He said the hope is to offer more courses and audits in China and work more extensively with regulatory agencies and associations in that part of the world.

Other efforts during the year include the launching of the new consolidated standard. Mr. Pursley said it’s much more of an educational tool that is designed to assist food plants in understanding the programs they need to support their food safety efforts.

Overall, international food safety issues have presented an opportunity for AIB to help restore lost confidence in the marketplace.

"There is always a risk when you eat food, but we need to make sure we provide as much confidence as possible," Mr. Pursley said. "Right now my biggest concern is, ‘How do I assure the industry that their food safety programs are just not paper programs, but they are validated and they are honest and they are effective and they are working’ … You have one mistake and you’ve lost all the leverage you thought you had built earlier."

Specifically, AIB is working to figure out how to increase confidence in the marketplace both in the private sector and regulatory sector. He said the F.D.A. is looking for outside assistance and third-party certification schemes, and he sees AIB as playing a role in this.

"While AIB is not really a certification scheme, we want to help them (the F.D.A.) provide confidence internationally, but also domestically, by some of the programs and educational efforts we have to offer," Mr. Pursley said.

In addition to working with the F.D.A., Mr. Pursley said AIB has been working cooperatively with various states in the area of food defense, particularly training state employees to perform vulnerability assessments. This year, AIB will be working more with the U.S. military and provide training with regards to the food supply of the military.

Specific food defense initiatives include providing more vulnerability audits and helping with assessments and manuals.

Elaborating on food defense efforts for the next year, Mr. Pursley said AIB will continue to provide training for food defense coordinators in facilities as there is an increased demand from many of the new audit schemes that have requested at least one trained individual in each facility. In addition, many food companies have been developing food defense plans and need assistance in moving the training to the employee level.

"The efforts from food defense have grown considerably from 2007-08, and I think 2009 will be an even bigger year," Mr. Pursley said.

Summerizing objectives for 2009, Mr. Pursley said AIB will be helping the private sector and regulatory agencies to build confidence in food safety and food defense systems.

While working hard to provide needed training to the food industry, he said his group also has been working to improve the quality of its training efforts. To that end, he said AIB has invited consultants to come in to help with the redesigning of some educational products in an effort to break down the educational experience for a new audience.

"This is an attempt by us to make our training programs not just training, but also educational," Mr. Pursley said. "They teach not just how to do something, but why to do something … We have taken our existing programs and we are reformatting them in ways we think they will be better suited as a learning experience for these new audiences we will be having."

Mr. Pursley said his team will roll out a four-week resident course this summer from July 6-31 for sanitation professionals, something entirely new that builds on Food Safety Education’s efforts to improve its educational offerings.

About 35 years ago, Mr. Pursley said it was normal in the industry for every food plant to have an assistant sanitarian. But he said food companies today are so lean they rarely have an assistant, and the model has changed so the professional sanitarian is generally not there and many plants need and desire to go back to the old model.

The new resident course will fill that need with this new, in-depth course that will feature lectures, hands-on labs and interaction with working food safety professionals. He said the AIB’s team of professionals have been working on the curriculum for about a year.

Keeping up with the latest certification schemes

Audit services invests heavily in audit training and updating the consolidated standards

With the world getting smaller, retailers and manufacturers going global and increased audit requirements from various global organizations, Dr. Maureen Olewnik, vice-president of audit services at AIB International, said her department will continue to focus on changes in food safety requirements worldwide.

Dr. Olewnik said AIB has been heavily involved in the Global Food Safety Initiative as Wal-Mart Stores, Inc. and other major retailers are requiring such certification schemes from suppliers.

"We’ve invested a lot of time and a lot of training into our staff in the area of certification schemes," Dr. Olewnik said. "There is an enormous amount of training activity required for these. It’s a real investment on our part to get these folks up to speed and ready to go."

As a result of the Global Food Safety Initiative, the BRC and SQF audits are now offered in the United States. But there also is still a need for a focus on the basics in other areas of the world.

"The certification schemes required by the retailers is an important part of business in the future, but I also believe some of that is a little beyond what some of the food production groups in various parts of the world are capable of doing quite yet, and they are in need of some basic prerequisite and GMP training," Dr. Olewnik said.

Specifically, she said in Asia AIB’s efforts are primarily focused on the GMP inspection as they find an interest in that area of the world for an understanding of the basics.

Activity in the future likely will focus on bundling a certification audit with an AIB inspection, Dr. Olewnik said. Many of the certification schemes are focused more on paperwork and record-keeping and less on the floor inspection activity.

"The best of both worlds is to be able to bundle the two of them so we can go in and do that paper review, the programs review, very thoroughly under the certification scheme and then add on an AIB inspection where we spend an enormous amount of time out on the floor," Dr. Olewnik said.

The audit department saw about a 5% growth during the year, with most growth being international. Growth continues in the European Community, and AIB anticipates significant growth in China and the Pacific Rim. Mexico and Latin America are growing regions for AIB, but they are not growing at the same pace as Asia.

"It really is a requirement anymore to stay active in some of these organizations (such as the Global Food Safety Initiative) and attend the meetings — talk with your competitors, talk with the potential customers, the customers and the retailers — and make sure you understand clearly what the issues are and what they are looking for," Dr. Olewnik said.

Other national and international meetings she noted as important for AIB to be involved in include meetings with the Grocery Manufacturers Association in Washington as well as food safety meetings that draw different members of the industry from around the world.

In another area of business, Dr. Olewnik said the AIB staff spent approximately 40,000 hours updating the consolidated standards during the past year. She said AIB reformatted the standards from a paragraph format to a step-like progression.

"Between moving the new consolidated standards forward, making sure we have enough certification auditors in place to meet the needs of our customers and making sure we can maintain ourselves as a good partner in providing service to our customers — those three areas are things we are always looking at trying to make sure we have good control over," Dr. Olewnik said.

One challenge in updating standards was making sure the wording was correctly written and understandable for various cultures. That was an in-depth process as the audit staff began to realize some of the new wording would not be acceptable for every area of the world and may be misunderstood in some cultures. As a result, it took a significant amount of hours to make the wording just right. In the end, Dr. Olewnik said she believes the consolidated standards are now a superior product to what it was previously.

In the future, Dr. Olewnik sees the audit department most likely focusing on many of the same issues it faced during the past year.

"Whether the Global Food Safety Initiative certification approach with an AIB inspection bundled to it is the direction it’s going to stay headed, I guess time will tell," Dr. Olewnik said. "The biggest challenge is being able to understand how and where things are going to be shifting and making sure we’ve got all our resources in place to be able to supply that quality of service when it’s needed."

AIB anticipates ‘holding its own’ in economic climate

Educational offerings flat, but international activity helps boost revenue 7% in 2008

Despite a difficult economic environment in 2008, AIB generated a 7% increase in revenue for the year. Even so, the results were still beneath expectations, said Paul Klover, vice-president of administration.

Still, Mr. Klover attributed an increase in net revenue to the ability to contain costs.

"Educational revenue for seminars, on-line training courses and correspondence courses are pretty much flat," Mr. Klover said. "I don’t see a huge increase there. We expect the good growth on the international side of our business that still centers around the various audit schemes we provide to the industry."

In fact, he said all of the various audit schemes have continued to show growth.

While he doesn’t believe the economic conditions made a significant impact in the 2008 results, the extent to which the economic conditions will impact AIB in the coming year is unknown, Mr. Klover said.

"In the past when we’ve had a downturn in economic conditions, AIB has normally held its own," Mr. Klover said. "If we look at the audit area, people need to have their audits completed for compliance issues. Companies will cut back in some training areas; however, they still have to do a certain amount of training to keep their staff current."

Mr. Klover said 65% of AIB expenses are in personnel costs, but he does not anticipate any major changes. The Institute may limit some new hires and filling open positions. Overall, general expenses were up 9% during 2008.

Given the general market conditions, AIB experienced a negative 20% return on investments for the year. Mr. Klover said this will directly affect some of the scholarship offerings they may provide to students, especially for the Baking Science and Technology and Maintenance Engineering courses.

One unexpected expense AIB incurred during 2008 was a new roof for the headquarters building in Manhattan, Kas., after the old roof sustained damage during a June tornado. The storm most significantly damaged the part of the building where the audit services department is housed. While the roof damage was confined to a limited area, AIB decided to replace the entire roof given the existing roof’s old age. The entire incident did not make a significant impact on results for the year.

"It caused a little turmoil internally, but our employees were moved to new quarters and kept on doing their jobs," Mr. Klover said. "We were able to continue holding classes here, so it really didn’t affect us that much."

In terms of the 2009 budget, AIB is planning for an 8% increase in revenue from the final 2008 results. Mr. Klover said this takes into account good growth internationally in the audit services area, and it projects flat results in educational training programs.

"Our goal is to meet the bottom line projections for ’09," Mr. Klover said. "That will be on the expense side as well. This will require monitoring expenses very carefully as we go forward in ‘09."

AIB working to secure long-term growth

Development and security for the future are essential

Attending to the basics and ensuring solid growth and development for the future was a major theme at AIB International during 2008, said Brian Soddy, vice-president of sales and marketing.

Mr. Soddy said these goals were accomplished through the endowment fund for the School of Baking, continually updating the content of seminars, and making sure the School of Baking offerings are appropriate for today’s cereal foods industry.

"Like most other business, AIB has some macroeconomic trends we have to deal with — discretionary expenditure, discretionary travel are things that companies look to cut," Mr. Soddy said. "We have to be cognizant of the fact this could potentially put our educational offerings — certainly attendance at off-site seminars — under pressure. So we have to communicate that seminar being as relevant and helpful as possible. We have to communicate a very tangible offer to customers so they can justify spending some of their hard-earned dollars with AIB."

While AIB had a solid year in 2008 overall, attendance at some scheduled seminars was somewhat soft, Mr. Soddy said. But numbers for contracted seminars where AIB takes educational offerings to customers were up.

"In the end, if the customer can’t come to you, we’re going to go to the customer," Mr. Soddy said.

In terms of future growth, Mr. Soddy said it will depend on expanding work with existing customers.

"AIB has a special relationship with its customers, and by in large we have such a large coverage of the industry on the domestic front there are not really that many more new customers, we just have to increase revenue through our existing wide customer base," Mr. Soddy said.

AIB is hoping more and more customers will come to AIB to bundle their audits and combine an AIB inspection with a Global Food Safety Initiative audit, he said.

"Last year was a very interesting year for AIB in particular on the food safety side … the whole Global Food Safety Initiative wave had an incredible strength last year with the backing of major retailers such as Wal-Mart and Kroger," Mr. Soddy said. "Therefore, AIB has had to make considerable investment so we have the capability of conducting these audits."

AIB channeled much of its resources, both human and monetary, into ensuring AIB’s capabilities to perform these audits, he said.

"The fact that we have long-standing relationships with so many customers means many — we hope most of them — will want AIB to conduct their Global Food Safety Initiative audit rather than another firm," Mr. Soddy said.

Mr. Soddy said it is also important to be present at the international and domestic conferences for the G.F.S.I. and be there to be part of the process of formulating policy and audit products. This has led to some fundamental changes in the way AIB looks at its offerings.

"The last year was a year of realization that the landscape has changed," Mr. Soddy said. "Who knows? It may change back again. Right now our assumption is that it will not. We have made a very significant investment in training our people in how to do these audits in the U.S. and also worldwide."

AIB has been adapting to the increased use of the Inernet. At the end of 2004, 16% of customers said their primary influence in signing up for an AIB product was the Internet, and 58% received their information through mailed brochures. In 2008, 33% received their information through the Internet and only 35% were influenced by mailed brochures.

"There is no doubt that 2009 will see Internet marketing being the dominant source of information for our customers, and therefore we are accelerating our move toward Internet-based e-marketing," Mr. Soddy said.

Mr. Soddy said trade shows are still proving to be an effective way for AIB to get out its message and he sees the American Society of Baking Food Safety Summit, the International Dairy-Deli-Bakery Association and the Food Process Expo shows as especially beneficial. AIB attends about 40 shows a year, and he said international shows are a great way for future growth.

AIB is now working on translation of the newly updated consolidated standards, and the standards are already available in Spanish, Japanese and Chinese and will soon be translated into Portuguese, French and German.

"The continuity for AIB is our set of intellectual property and knowledge," Mr. Soddy said. "Our baking knowledge is globally applicable, although certainly adaptable for different countries."

In the coming year he sees AIB steering and accelerating into existing trends rather than any non-organic initiative.

"The AIB franchisee in the baking industry remains very strong, and we have a tremendous burden of responsibility to make sure we continue to earn the trust of the industry," Mr. Soddy said.

AIB works to help companies reduce costs, look for alternatives

Industry relies on the experience of the AIB staff

The downturn in the economic climate has actually proved beneficial to research and technical services at AIB International, said Brian Strouts, head of research and technical services.

A down economy doesn’t eliminate the need for research and product evaluation. In fact, business for this group picked up during the second half of 2008, right when the economy began a significant downward spiral.

"We had a very strong year … the internal research we’ve done made very good progress," Mr. Strouts said. "We continue to have a great deal of interest from wheat-producing groups, wheat-commission groups within the Midwest. We are reaching out to the Pacific Northwest people already this year and have a lot of interest from them. Our internal programs showed a lot of promise in development over the last year. The other services we offer — we had an all-time high number of samples and dollars worth of revenue from our analytical services group."

Because companies contended with high commodity costs the previous year, there was a heightened interest in looking at cost inputs and companies wanting alternative ingredients to help reduce costs, Mr. Strouts said. As an example, Mr. Strouts said he spent time in Central America during the past year helping a company that wanted to switch from soft red wheat to soft white wheat simply because the latter has lower transportation costs as a result of where it is grown. The different types of wheat do not perform the same, so there was an effort that had to take place to make the conversion.

"Sometimes when you are looking at a production system, they are doing something a certain way because that’s the way they have always done it, but it may represent a food safety hazard," Mr. Strouts said. "We’re there to always step in and help support them from a technical standpoint that there may be a better alternative."

Mr. Strouts said his department is continuing to do a significant amount of work in the area of developing 0 trans fat shortenings, and there is still a lot of interest in the concept. He said the work now is focused on reducing saturated fats while still eliminating trans fats.

"Ultimately we are trying to match, at this point, something that is no trans and low saturates with the old partially hydrogenated shortening everyone was using three years ago and maintain all of those same quality characteristics," Mr. Strouts said.

As many companies seek to reduce expenses, they often cannot afford an extremely experienced staff and are simply dealing with fewer resources.

While Mr. Strouts said his department might have a small staff by numbers, the staff has approximately 250 combined years of experience in the baking or food industry, leaving plenty of resources to draw from. He said that is where AIB is able to differentiate itself — offering a broad range of experience as opposed to a single consultant.

"Our biggest challenge is always just managing our own time and resources so we can deliver the best customer service," Mr. Strouts said. "So that becomes a challenge to juggle minimum resources and still deliver that kind of customer service. That’s a very strong focus we have, and we are dedicated to doing the best we can for the biggest wholesale baking company out there all the way down to the person who has a shop with five people "

In the future he said the Institute will continue to look for ways to expand capabilities within flour milling as well as general capabilities across the board.

"We pride ourselves on our knowledge of baking technology, cereal technology, function of ingredients — that’s really our core competency, and we know how to use that," Mr. Strouts said. "But we are always looking to see if there is a way to get any additional capability out of our pilot plant that we could scale something up or just do a better job."

This article can also be found in the digital edition of Milling and Baking News, April 21, 2009, starting on Page 35. Click