Billings Gazette – BILLINGS, Mont.
Infant formula bearing the America’s Pride label and manufactured by a Billings company will soon appear on retail shelves in China as the world’s most populous nation continues to recover from a devastating food safety scandal.
The venture also provides a big new opportunity for All American Pharmaceutical.
Formula tainted with the industrial chemical melamine killed six children in China. Another 54,000 were hospitalized beginning in 2008 as the crisis unfolded. In its wake, 21 people were convicted of criminal charges and of those, two were executed.
Although Chinese officials have turned to foreign products to ease consumer fear over tainted formula, another recent development paved the way for All American to enter the baby formula market, said Jeff Golini, the company’s founder and executive scientist.
Last year China eased its controversial one-child family planning policy, and demand for formula is expected to grow now that millions of Chinese families can look forward to having two children instead of one.
The worldwide market for baby formula has grown from $36.7 billion in 2010 to a projected $55 billion in 2015, according to Statista, a marketing-oriented website.
All American’s expansion plan will soon kick into gear as the company completes a yearlong authorization process that involves documenting and submitting formulations to Chinese officials. Golini hopes to begin production late this year or early in 2015.
“Chinese mothers won’t use products made in China because of the melamine problem, so now everything has to be imported,” Golini said. “They’ve shut down shipments from many countries because of low quality. But we’ve been able to get approved because we’re known for quality, and this will be a big boost for Montana.”
“All American Pharmaceutical has operated out of the former Heights Kmart store since 2006. The building is currently large enough to accommodate the expansion, although equipment will be purchased as the project ramps up”, Golini said.
All American plans to hire 20 to 30 people to supplement its current workforce of 135. The plant now operates on a two-shift schedule, but a third shift will likely be added as production grows.
A promotional website for Kre-Alkalyn, one of All American’s more popular supplements, describes Golini as a former bodybuilder turned scientist. He has developed many products that the company sells.
Golini, who has completed a doctorate in quality management and master’s degrees in quality management and business management, has other expansion plans in the works. All American Pharmaceutical has received an $80,000 grant from the Montana Board of Research and Commercialization Technology to fund a study on one of its patent-pending nutritional supplements.
KarboLyn is an energy-supplying product that is metabolized like a sugar, but contains no sugar. Like many products sold by All American, it’s used by athletes who want to improve their performance. But it’s also being studied for other potential health benefits.
“The athletes love it because they can use it in their pre-workout routine,” Golini said. “But there’s also interest in using it for people who are in the pre-diabetic stages.”
Big Sky Economic Development, Yellowstone County’s economic development agency, is also involved in the expansion. BSED is helping All American seek a state grant from the Big Sky Economic Development Trust Fund, a Montana Department of Commerce-administered program that assists expanding companies.
All American Pharmaceutical sells its own products and also does contract manufacturing for other companies. It sells products distributed in powder, pill, liquid and capsule form.
Three companies – Mead Johnson Nutrition Co., Abbott Laboratories and Gerber – dominate the domestic market for baby formula. Last year Abbot and Mead Johnson each reported sales of about $1.3 billion, followed by Gerber, with sales of $781 million, according to Statista.
The Billings company has no plans to market baby formula in the United States, Golini said. America’s Pride formula will contain dairy products, but it will also contain a number of ingredients, such as fish oil, that are geared toward the Chinese market.
Golini believes that Chinese consumers will embrace All American’s baby formula in part because labels will be written in Chinese.
Golini started making dietary supplements in 1985 while he was a professional bodybuilder. He moved his family from California to Montana in 1992, during an era when many businesses sought greener pastures away from California’s high-cost, highly-regulated environment.
The move to Montana has paid off as the company has experienced consistent growth. Eight years ago, the company moved its manufacturing and packaging operations into the former Kmart store, which was extensively renovated to comply with strict health codes.
A visit to All American Pharmaceutical illustrates the company’s commitment to security and quality control. All visitors must be buzzed in at the front door. Workers who mix, package and ship products would look at home in an operating room. They’re attired in scrubs, shoe covers, hairnets and masks, and they must follow a strict handwashing protocol.
Products are consistently sampled and tested throughout the process to ensure quality. As a manufacturer and a clean industry, All American Pharmaceutical is the kind of business that creates excitement for people interested in job creation.
“We bring all of our raw materials in. We process it and ship it out. That’s bringing new money into the community,” Golini said.