AB Enzymes is to pass on some of the increased costs of raw materials, energy and overheads, upping the price of its baking, food and specialty enzymes by up to 10 per cent.
The company, which is part of the ABF Ingredients Group (itself a subsidiary of Associated British Foods), was founded in 1907 and claims to have pioneered the use of enzymes in food. It reports a revenue of over €60m.
However this long and noble history does not make the German firm exempt from pressures that are affecting the span of the food industry. Eric Marks, VP of business operations at AB Enzymes, said: “We have reviewed our operations in detail and we see no other way than to ask our customers to share more of the value that they see coming from using our products and services.”
While the new prices are in place with immediate effect, the company said that all prior contracts and commitments will be honoured and are unaffected.
The story of increasing costs is one that has been dogging the food industry over the last 18 months in particular. As wheat has been one of the commodities hardest hit, as a result of several factors (including, not least, inclement weather and increasing demand for grains for competing uses), manufacturers of bakery products have been amongst those hardest hit.
The price of bread-making wheat soared to €248 a ton recorded this time last year – although some stability looks to be returning this year as farmers compensated by planting more. The price was reported at the beginning of this month to have dropped to €180 a ton.
Nonetheless, today’s news on the enzyme price increases may well add to concern for the company’s bakery customers.
AB Enzymes has recently focused the marketing of its enzyme range to inform customers about how they could actually help reduce production costs.
For instance, the its Veron GMS (Glycerol-Mono-Stearate) was first launched as part of the Veron range in 2006 to replace between 50 and 100 per cent of the emulsifier monoglyceride.
It is now emphasising how this enzyme can save up to 30 per cent of production costs.While monoglycerides themselves have not suffered from price increases, cost savings achieved by replacing the enzymes with a cheaper alternative can compensate for increasing costs elsewhere, Oscar Diez, sales development manager for baking enzymes, told BakeryandSnacks.com last month.
Other ingredients recently introduced by AB Enzymes to save costs include Veron HF, which is used to replace 50 per cent of the gluten used in a formulation.
And in spring of this year, the group launched Veron S50 to replace sodium metabisulphite and improve the properties of the dough. The company claims it reduces the extension resistance, optimises the properties of baked biscuits and crackers and enables the biscuit and cracker industry to process commercially available flours.
Growing use of enzynes
Enzymes are being used more and more worldwide in the food and beverage processing applications and are expected to rise by 8 per cent each year to reach $1.2bn (€846.2m) by 2011, according to the World Enzymes report by The Freedonia Group.
Novozyme currently holds 26 per cent of the total enzyme market, while Danisco, Genzyme, Roche, Allergen, DSM and BASF have a 36 per cent share between them, the Freedonia Group said.