In this first part of our series on how food and beverage companies are dealing with higher commodity costs, FoodNavigator-USA looks at how flavors can be used to alleviate their effect.
Black pepper and citrus prices, such as orange and grapefruit, have been particularly volatile recently, as have mint, cocoa, cane sugar and dairy, according to global vice president of creation, application and innovation – flavors at International Flavors and Fragrances (IFF), Jesse Wolff, leading to higher demand for flavors in these areas.
Wolff told FoodNavigator-USA that the challenge for flavor firms is reformulating foods and beverages to contain less of a particular ingredient, while retaining flavor, mouthfeel – and even the same label declarations.
He said: “All of our customers do use commodities to formulate their products. When there is a convergence like there is today, where many of these ingredients have increased in price, they look to us to see how they can reformulate their products and keep the quality of their products.”
In addition to the flavors themselves, Wolff said IFF also has specialty flavors to help build back the mouthfeel associated with greater quantities of cheese or sugar, for example.
“The art is to retain the same label while mitigating the costs,” he said. “…When it comes to a cost effective solution, flavors can be very useful to mitigate costs while keeping the brand promise, and that’s what we try to do.”
Nevertheless, flavor companies are not immune from higher ingredient costs either; IFF reported a 6% rise in revenue and a 2% dip in gross profits in the third quarter to the end of September, saying that higher pricing had not kept up with double-digit growth in raw material costs.
IFF is not the only flavor firm targeting manufacturers squeezed by higher ingredient costs. Senomyx, in partnership with Firmenich, has reported growing interest in its sucrose enhancer, as higher sugar costs have combined with health concerns about overconsumption of sugar.
And Comax Flavors last week drew attention to its peanut and pecan flavors, citing growing demand from China and drought conditions, which have led to lower nut yields and higher prices.
“They are the perfect means to help top note foods and offset the mounting expense of these products,” the company said.