AIFI navigates changing tastes in consumer trends
Food ingredient company marks 20 years as a behind-the-scenes supplier to major brands.
A West Michigan importer-distributor says its ability to adapt to changing tastes in the global food market has positioned it to reach $1 billion in revenue within the next decade.
Ada-based American International Foods Inc. (AIFI) is celebrating its 20th anniversary this year, increasing the size of its current facility by 50% and continuing to expand its footprint as it taps into consumer trends.
Jeff Engler, founder and CEO of AIFI, said the company is on pace to hit $1 billion in revenue within 10 years. He declined to disclose the private company’s current annual revenue but said the goal is “attainable” based on its present pace.
As part of its “progressive growth plan,” AIFI also plans to open a West Coast office in the not-too-distant future, he said.
Engler — whose background is as a dairy and sugar trader and importer of food-grade chemicals — said he founded the company in his garage in 1999 because he “felt there was a need in the marketplace for a comprehensive turnkey supplier to food and beverage manufacturing (companies).”
AIFI has since grown to 32 employees who work out of a big, blue, barn-style facility in Ada, handling finance, accounting, customer service, logistics, supply chain, sales and marketing, while the rest of the operation is carried out by “a host” of nonemployee contractors who do imports, customs brokering and distribution.
The company’s bread and butter is its sugar, dairy and food-grade chemical categories, but it also supplies customers with organic, non-GMO and gluten-free ingredients.
In addition to importing about 2,500 different food components and selling them to hundreds of food producers around the world, AIFI positions itself as an expert strategist.
“We act as economists for our customers, who look to us for buying strategies,” Engler said. “We also do forward contracting to help our clients stabilize ingredient prices and manage price volatility.”
Current notable customers include Mexico City, Mexico-based Grupo Bimbo, which British Baker magazine names as the world’s largest baking company; Kansas City, Kansas-based Dairy Farmers of America; and regional manufacturers such as Walker-based Meijer and Grand Rapids-based Founders Brewing Co., as well as many other large companies with which it has confidentiality agreements.
Those agreements are very much in keeping with the company’s “behind-the-scenes” status, Engler said.
Despite the fact most people don’t know of AIFI’s role in delivering ingredients to the brands they love, the company has set itself a goal to have its products be consumed by 7 out of 10 Americans daily within the next decade.
“We’ve got a little game that we play at our office where we’ll talk about a gathering and what kind of food was at that gathering, and we’ll talk about the brands (that carry our ingredients), and we can also go into a grocery store and pick a category and go to that brand, then see what customers we’re supplying the ingredients to,” Engler said.
“We’ve got a lot of different customers that we touch on a national basis, and our odds are pretty good to have at least one ingredient in their ingredient legend that we’ve marketed.”
Part of AIFI’s secret sauce is its commitment to keeping multiple ingredient projects in development at once; Engler said he currently has about 35 to 40 on his desk. It also strives to build ingredient pipelines three to five years ahead of emerging trends.
Engler said AIFI did this as the demand for gluten-free ingredients was accelerating eight to 10 years ago and repeated that success five years ago as worldwide demand for sea salt skyrocketed by securing exclusive North American distribution rights from a Spanish supplier of sea salt. The move positioned AIFI to become the No. 4 sea salt distributor in the U.S., on track to be No. 3 by year’s end, Engler said.
AIFI also has established itself as a source for vegetable proteins, tapping into the global demand for vegetarian and vegan foods.
“We provided a solution set for anybody making alternative meat products,” Engler said. “We’ve set up the supply chain and turnkey ingredients system that they’re able to use to manufacture.”
As more attention has turned to cannabinoids, AIFI has been cautiously exploring distributing non-THC, nonpsychoactive byproducts such as hemp and CBD for the past year and a half, Engler said, noting AIFI leans “traditional and somewhat conservative” in its approach to the market.
“We’ve just really been monitoring the market and making sure that this is a standing trend and something that is going to be safe,” he said.
Engler said AIFI would only be in the business of distributing raw ingredients that manufacturers of CBD products — from dog treats to supplements — would use, and the company would not be making products or touting any health benefits of the substance.
He said the remarkable thing about cannabis is how demand has grown purely by word-of-mouth marketing of its “perceived health claims” as an anti-inflammatory and stress, anxiety and pain reliever. The medical establishment has not yet definitively established the veracity of those claims, and the Food and Drug Administration has not yet reviewed and approved CBD, let alone set standard dosages, he said.
Engler said it’s paramount to AIFI to “always do the right thing” in keeping with two of its guiding principles: honesty and good stewardship.
“I’ve been blessed to be a leader in business. We set big goals, and we employ people who work really hard and share our vision,” he said.
“It’s just like every successful business — a lot of this is about the ‘try.’ When you try hard and you work hard, eventually you succeed. How high you set your goals is really what dictates the level of achievement an organization will get.
“If there’s a secret formula to what we’re doing, it’s really just passionate, hard work.”