Cindy Hazen, Contributing editor

October 19, 2009

13 Min Read
Ingredient Economics

Food technologists are a creative, but miserly, crowd. They strive to deliver consumer-pleasing products while piecing together penny-saving formulasan aspect increasingly important in todays economy. Knowing how to squeeze maximum flavor, functionality and cost benefits out of new and existing formulas begins with a few basic principles and some ingredient know-how.

Supplier strategies

Especially now, given the state of the economy, the No. 1 thing for manufacturers to do is to talk to their ingredient suppliers, says Carrie Schroeder, product line brand manager, Edlong Dairy Flavors, Elk Grove Village, IL. If you operate in a vacuum, youre not going to end up with a product thats as good as if you have collaboration.

Allowing a trusted supplier to look at the product holistically can generate inventive cost-saving recommendations. We dont need to know who your vendors are or what youre paying for ingredients, says Schroeder. We can look at the combination of ingredients and what each is bringing to the table from both a flavor and functionality standpoint. Its really about getting creative and finding combinations of ingredients that contribute less cost overall.

Flavor companies might not be first on the list for food scientists seeking economical formulations, but they can offer a unique perspective. Most flavor houses now have a culinary staff available that can work with the developer. And they have a helicopter view of the industry, without any bias against any additive or ingredients used in the formulas, and can therefore give very sound advice, notes Simon Poppelsdorf, vice president, flavor R&D, Bell Flavors & Fragrances, Northbrook, IL. The company can work with the customer by looking into the label and offering lower-cost alternatives, such as going from natural flavors to natural and artificial and completely artificial, and reducing the use of costly commodity ingredients.

Using a flavor designed to extend or replace raw materials can result in significant price savings. A very good example is honey, Poppelsdorf says. It is used in a wide range of products, like ham, cookies and barbecue sauces. In a barbecue sauce, you already have sugar, caramel color and honey used together. Using a honey flavor can dramatically reduce the honey by increasing sugar or corn syrup, and color, if needed, he says. The leverage of savings can be enormous in this kind of approach.

Matt Patrick, vice president, R&D, TIC Gums, Belcamp, MD, finds that, often, food formulations are designed under rushed and challenging circumstances. Launch timelines have become more and more aggressive over the years, he says. We see that developers must juggle several tasks simultaneously in order to hit a predetermined launch date. Often, formulas become prematurely locked down as a result of consumer tests and long-term stability studies. All of this means that formulas have not always been optimized for cost, and ingredients systems have not been fine-tuned to achieve the most functional efficiency. My recommendation would be to go back and take a critical look at ones formulation, and if there isnt hard evidence that a given ingredient is at its optimal level, consider it an opportunity to reduce the cost of that formula, perhaps even enough to offset increasing ingredient costs.

When reformulating an existing product to reduce cost, it can be difficult to match the ingredient statement. Maintaining a label claim can be another burden. Preserving flavor, color and texture are imperative.

Consolidating ingredients and building volume is also key to boosting savings. Many suppliers will give aggregate pricing breaks for purchasing multiple items, says Alan Freed, president and CEO, Gum Technology Corporation, Tucson, AZ. If you are buying a large quantity of one item from a supplier, and a smaller quantity of another, you might want to consider negotiating the smaller quantity as a component of total purchase, and request a lower price based on your total volume of goods purchased. Yearly contracts will protect price stability and create incentive for the supplier to offer the best price possible.

Freed also recommends knowing the growing and harvest cycle of natural products. Keeping an eye on the progress of the commodity will help you know when it might be the best time to buy, he says. A reliable supplier will keep you informed of the current crop status and future projections.

Julia Boyd, business development coordinator, Ganeden Biotech, Inc., Mayfield Heights, OH, stresses the importance of sustaining quality: Do not sacrifice quality for cost. Ensure that your supplier is compliant with GMP and/or FDA regulations. Audit your ingredient suppliers. In many cases, low costs result in low quality.

Even if a formula has been carefully scrutinized to balance quality with frugalness, savings arent fully realized unless processing is optimized. Labor is usually the most-expensive part of any product, says Mark Purpura, technical services manager, Advanced Food Systems, Somerset, NJ. In the long run, if something costs a little bit more but saves a lot of time and reduces waste, the final product can end up being cheaper.

Using custom blends is one way to build production efficiency. Instead of the manufacturer having to dump a combination of six to 10 ingredients, theyre dumping one ingredient, so theres a lot less weighing and a lot less preparation and a lot less room for error, Purpura says. Adding a single ingredient can eliminate steps and boost turnover rate and throughput.

How a meat product is processed, whether its tumbled, injected or soaked, is key to maximizing yield and driving cost savings. You want to have the system that will penetrate the meat and stay in the meat, says Purpura. We have ingredient systems that can be used in meat thats raw, marinated and sold raw; marinated, cooked and frozen; and marinated, cooked and refrigerated. When you add these to the meat, seafood or pork, we try to get the texture as close to the original product as possible. It tends to be juicier, but not too soft, and you dont sacrifice flavor, so it doesnt taste watered down, mushy or spongy.

Controlling commodity costs is vital to economical formulations. We have dry cream, milk and half-and-half replacements that have a stable cost throughout the year. Theyre not perishable, so you dont have to worry about them spoiling as fast, Purpura says. Theres no refrigeration involved, so theres storage cost savings. Theyre easier to add from a processing point of view. Theyre a lot more stable in terms of freeze/thaw. The quality stays good, so you dont worry about product being damaged or sacrificed that way.

Liquid cheeses, often used in sauces, can be especially costly because of the waste that remains in a can or drum after its used. When using #10 cans, theres a lot of labor involved in opening the cans and adding them to the sauce, Purpura says. Liquid cheeses can be replaced with a dry ingredient thats added to the water, maintaining a similar process that was originally used, but with fewer steps involved, he says.

Reducing microbial populations can translate to cost savings by improving food safety and increasing shelf life. Lysozyme, a natural antimicrobial enzyme produced by Bioseutica, Rhinebeck, NY, inhibits the growth of a wide range of gram-positive bacteria. Using a lysozyme solution in cheese manufacture is a cost-effective means of controlling late-blowing, an aging defect caused by butyric-acid bacterial contamination.

Definitely dairy

Dairy ingredients can significantly impact a formulas price, and their costs fluctuate with the market, thus impacting formulation costs and profit margins. According to Schroeder, many dairy commodity ingredients, such as milk powder, buttermilk powder or sour-cream powder, can be reduced with the help of flavors. By working with flavor companies specifically, you can reduce the amount of dairy commodity anywhere from 10%, and sometimes upward of 40%, she says.

For example, if a cheese powder comprises 15% in a dry-blend formulation, and the goal is to reduce it by 25%, you would reduce it by 25% and make minor adjustments to the fat, salt, acid and functional ingredients to maintain the original profile, says Schroeder. For flavor and mouthfeel, you might add a low level of cheese flavor and increase the fat via a shortening powder or oil, depending on the application. You can add a low level of additional salt and, depending on the character of the cheese being replaced, it may be necessary to adjust citric- or lactic-acid levels. If you imagine a sharp Cheddar cheese and the sharp lactic-acid bite, removing that from a product may result in a loss of tartness or the aged note.

Applications that use cream, like a cream-based soup or sauce, can also benefit from the use of flavors. Cream is naturally rich and fatty, adding both mouthfeel and viscosity to products. By removing cream, youre not just losing flavor, youre also losing mouthfeel and richness, Schroeder says. To reduce the amount of cream in a formulation, we might recommend a combination of skim milk and milk and/or cream-type flavors. This would help with both the flavor and mouthfeel, and usage levels would vary depending on how much cost a manufacturer is trying to drive out of the formulation. In addition, incorporating stabilizers, gums or starches can help with the overall mouthfeel. Using a combination of functional ingredients and flavors allows for the greatest degree of flexibility in formulation.

The trick to maximizing dairy flavors is recognizing their synergy with existing dairy ingredients in the formula. By combining dairy flavors with cheese powders, milk powders, and even block cheese or fluid milk, the synergistic result is an amplified flavor and mouthfeel, notes Schroeder. This provides flavor delivery, cost maximization and product efficiency.

In a dry, buttermilk-based seasoning blend, the addition of buttermilk flavor can provide overall dairy impact not possible with buttermilk powder alone. If youre using buttermilk powder in addition to a low level0.25% or 0.50%of buttermilk flavor, that buttermilk flavor can amplify the overall flavor profile, says Schroeder.

Its important to understand what dairy flavors add. For example, adding low levels of dairy flavors, such as blue cheese, Parmesan cheese or brown butter, to products can result in a more complex or interesting flavor profile, Schroeder says. They enhance the inherent richness and mouthfeel of real dairy and assist manufacturers in creating unique, value-added and cost-effective product.

Michelle Ludtke, senior food technologist, Grande Custom Ingredients Group, Lomira, WI, suggests functional whey protein to drive down dairy costs. Its more-stable-priced than other commodity-type products, she says. Our functional whey protein product is also always added to the formulation with other liquid, typically additional water, because it is in powder form and needs to be hydrated to achieve its viscosity-building functionality.

In dairy-based sauces, ingredient costs can be reduced by replacing a portion of a more-expensive ingredient or replacing that ingredient completely, Ludtke says. For example, we have an in-house cream-sauce formulation where we can reduce cream to 50% of the amount in the control, and maintain the same mouthfeel texture and flavor. Even when cream is priced relatively low, the combination of whey protein and water is a very good cost-savings measure, she says. It adds a full-bodied, heavy and creamy mouthfeel and can help reduce or eliminate ingredients such as cream, nonfat dry milk, eggs, cheese, ground beef, butter, cream cheese and other binder-type ingredients, she says. Its low in fat, but has a very fat-like and creamy mouthfeel, so it can be used to make reduced-fat items that taste just like the full-fat counterpart, she says. When the amount of fat is reduced, the flavors in the food system generally come across as a bit stronger and more pronounced. This may allow cost savings through the reduction of spices and flavorings.

According to Ludtke, functional whey proteins find application in a wide range of products and processes. Flavor profiles range from slightly tart dairy flavor to a mild, milky, creamy flavor to a slightly sweet dairy flavor.

Stabilizing solutions

Starches and gums are essential tools in rolling back costs. Not only do they build back mouthfeel and texture when other, costly ingredients have been reduced, but they can bind water, which can increase yield and reduce the finished product cost.

Gums, such as konjac, can hold up to 200 times their weight in water. Injecting water combined with gums in processed meat allows the meat to remain juicy, even through heating, and of course reduces the cost of the product by replacing protein with water, says Freed. The gums help to prevent purge, keeping the water distributed throughout the protein during shipping, storage and heating. This can be used on whole-muscle or comminuted meats.

Manufacturers can significantly streamline production costs by matching essential texture, processing performance and shelf-life properties with the appropriate specialty starch or combinations, says Robert Allin, director of marketing, National Starch Food Innovation, Bridgewater, NJ. In general, specialty starches can be very effective and cost-efficient in partially replacing ingredients subject to seasonality or fluctuations in availability and prices, such as dairy ingredients, fruits and vegetable solids, and oils. Another option is replacing cook-up starches with cold-water-swelling starches to save on energy costs and simplify processing.

Starch is versatile and cost-effective, and it can often replace more-expensive hydrocolloids and gums. Gum arabic replacement in beverage emulsions is a classic case, where the cost-in-use is often 20% lower, says Allin, noting that starch is not subject to the geopolitical issues associated with gum arabic.

Freed suggests manufacturers look at starch and gum combinations. Starches are relatively inexpensive and are good at building viscosity, he says. However, they can mask flavors, which, in the end, will make them more costly to use due to the required increase in flavorants to overcome the flavor masking. By using starch as a base, just to the point where flavor masking occurs, and then creating the final texture and viscosity with gums, you will have the benefit of low-cost viscosity combined with the cost savings of being able to reduce the amount of flavoring that is used.

When looking to change hydrocolloid systems, attention should be paid to the many synergies offered by combinations of different gums. Often, the same or enhanced qualities and attributes of a hydrocolloid can be obtained by utilizing the synergistic reaction between gums, or a gum and a starch, says Freed. Many manufacturers use blends of locust bean gum with guar, xanthan or tara to help reduce costs and often get even better results than they did with locust bean gum alone.

Xanthan gum and guar gum share a powerful synergy. A specific ratio of the appropriate types of these two hydrocolloids can yield a surprisingly high viscosity relative to the two ingredients alone, says Patrick.

There is great variety in hydrocolloids, Patrick cautions. At the same time, these ingredients impart a high level of functionality at a relatively low use level. Changes in these ingredient systems can have significant impact on textural attributes and product stability of finished food products. It is very difficult for a food formulator to become an expert in all the idiosyncrasies of hydrocolloids. He strongly recommends taking advantage of the formulation services of suppliers, because they usually come free of charge and they can make all the difference in ensuring a successful reformulation.

Cindy Hazen, a 20-year veteran of the food industry, is a freelance writer based in Memphis, TN. She can be reached at [email protected].


About the Author(s)

Cindy Hazen

Contributing editor

Cindy Hazen has more than 25 years of experience developing seasonings, dry blends, beverages and more. Today, when not writing or consulting, she expands her knowledge of food safety as a food safety officer for a Memphis-based produce distributor.

Subscribe and receive the latest insights on the health and nutrition industry.
Join 37,000+ members. Yes, it's completely free.

You May Also Like