The price of commodities has increased dramatically over the past nine to 12 months as a result of biofuel speculation, other emerging applications, and demand from emerging markets like India and China. A recent report from the FAO and OECD said that it could be as long as a decade before the sky-high prices come back down to earth, with severe consequences for food supply.
In a bid to help customers faced with a "tough situation", Danisco developed a range of new emulsifiers to let them use less of a given commodity, without affecting the sensory qualities.
Regional emulsifier director for Europe Dorte Petersen explained that there are two factors at play.
On the one hand, she said that price increases of at least 10 per cent are expected across the global emulsifier market as a result of rising vegetable oil costs. She declined to give details on Danisco's current price ball-park, but said that prices vary wildly across the many kinds available.
On the other hand, the increase in commodity prices across the board is putting manufacturers under pressure, as it is difficult to use less of a commodity in a product - and thus save the bottom line - without compromising on quality or taste.
While the first may seem to be crucial for a company active in the ingredients field, Petersen said that it actually has a relatively small impact on producers; emulsifiers are generally a small part of the overall ingredients list.
"A much more severe issue is the general increase of commodity prices, which impacts the cost of the food product much more," she said.
She told FoodNavigator.com that emulsifiers typically make up 0.5 per cent of a formulation. If emulsifier prices go up 10 per cent, this will have less of an impact than if the price of palm oil, which makes up 80 per cent of a margarine, doubles (as indeed it has done since 2005).
"We are focused on developing emulsifier solutions that can lessen the impact of these increases on the total food formulation."
What is more, since Danisco's emulsifiers enable savings in other areas, the company is able to justify the higher prices of its products.
The first two solutions to be launched allow the vegetable oil content in margarines and spreads to be reduced and replaced with water; for the gluten in bread to be reduced without affecting bread volume.
Petersen said these applications were the "most obvious" for Danisco, since the company has particular strengths in these areas to counter the problem. But it will also be looking at other commodity ingredients and food applications, and seeking to cater to its customers needs.
As for the technical challenges associated with reducing commodity use, Danisco's ingredient portfolio includes other ingredients as well as emulsifiers. In some cases some of these also need to be used to achieve the required results.
"You need to understand the full food matrix".