Issue Summer 13
Owning dogs and cats can be a challenge, especially when it comes to satisfying their hunger with something that is nutritious, tasty and safe. AFB International has managed to become a global science and technology leader in pet food palatability because the company understands how its ingredients can improve the health and wellness of companion animals.
“Our job is to help create an experience for dogs and cats that will bring them to the bowl so they will get the nutrition they need,” President Jackie Levin says.
Founded in 1986, AFB International provides ingredients to the pet food industry, and its ultimate consumer is four legged. The company has two manufacturing facilities and two R&D and administration facilities in Missouri. It also operates two plants in the Netherlands, will soon open plants in Argentina and Brazil, and has two plants through a joint venture in Australia. The company supplies flavors and ingredients to pet food manufacturers around the globe from these facilities.
What Customers Want
The pet food industry is a relatively small market, as there has been a great deal of consolidation of the companies that manufacture the pet food found in grocery stores and animal specialty stores. AFB International has working relationships with most of the major players in the industry, and it connects with the pet food companies on a few different levels.
First of all, AFB is part of the pet food supply chain. Its products need to be able to work in clients’ facilities and be there when needed. Food safety is another major issue, as pet food is highly regulated and some high-profile safety incidents have made people more aware of what they are feeding their pets.
“If you think about the formulation of pet food, there are a lot of commodities in it but we aren’t one of them,” Levin says. “We may be a small percent of the total formulation – only as much as two to three percent – but we are still strategically important to the product.”
AFB International has to stay on top of its customers’ research and development undertakings to make sure its products meet their taste profile needs. This is in addition to the fact that the ultimate consumers are animals, and they can’t give verbal feedback on whether something tastes good or bad.
“By their nature, dogs and cats don’t automatically go for a grain-based diet, and many dry pet foods have a percentage of grain,” Levin says. “We may have to mask or complement a taste in grains. What we bring to customers is our level of technological leadership. A lot of research and science goes into the production of our flavors so we can understand what will bring pets to the bowl.”
On the Move
To retain its leadership position, AFB International has invested in regular upgrades to its equipment and processes at manufacturing facilities. Likewise, its expansion initiative in South America is part of ensuring that the company can adequately meet the needs of customers as they go global.
“Customers are looking for global suppliers who are capable of delivering on a local level,” Levin says. “That is important for sustainability because it helps our customers in their effort to reduce their carbon footprint. In addition, because pet food is so highly regulated, some countries make it difficult to import meat-based flavors. Customers want to know that they will be able to get the same great flavors locally.”
Other areas where the company has invested resources include making improvements to its enterprise management system. AFB International says it also pursues lean and Six Sigma principles because these initiatives improve service and quality while helping AFB to become a better company.
From a growth perspective, Levin believes AFB International will continue to pursue growth around the world while also working to support its core domestic business. She says the company enjoys excellent relationships with customers and wants to help them remain atop the market.
“That is why we are always looking for new science and approaches, such as sustainability and ensuring ingredients are meeting the needs of pet owners,” Levin says. “We look at new ingredients that will be able to add value to the end-product from a flavor or nutrition perspective. Those efforts help our customers compete in markets where pet owners are looking for those benefits.”
Able to Adapt
Although the company is now only focused on dogs and cats, it is open to the exploration of other markets. However, the size of the population of pets declines significantly outside of dogs and cats, with the lone exception of fish. For the time being, there doesn’t seem to be much incentive for AFB to work toward expanding its companion animal focus beyond the prepared food market for cats and dogs.
The large production animal market is different. AFB has explored entering it, knowing that players in the market are looking for food that is healthier and can be quickly produced on a large scale, all of which presents future opportunities for the company.
One emerging challenge for AFB International is the fact that many of the ingredients the company has traditionally used are part of the waste stream. As an example, whey powder has historically been a relatively low cost ingredient for some of the company’s products. However, dairy companies are now finding other markets for whey, such as protein powders and energy bars. This change means that there is now less of the whey to go around. But AFB International’s commitment is to continue to look for sustainable resources and help pet owners take better care of their animals.
“Pet owners want to see their pets loving their food, and they want their animals to live longer,” Levin says. “Our ingredients help pets stay healthy and live better because they are a part of the proper care and feeding of animals.”