The price hikes, which will affect the company's AMG-brand enzyme products, are the latest in a number of similar announcements made by ingredient firms squeezed by increased energy and raw material costs.
In a statement yesterday, Novozymes said it plans to raise prices for its AMG, or amyloglucosidase, brewing enzymes by 10-20 percent. The increases will apply equally to spot sales and contract sales, and are due to be implemented as of January 1 2007, or as current contracts expire.
The current version of the firm's AMG enzyme was introduced into the US market two years ago, and is designed for attenuation control in brewing, in order to produce low-carbohydrate - or 'light' - beer.
According to the firm's North America regional marketing manager for brewing Soren Lund, Novozymes has attempted to avoid passing on increased costs to its customers through the implementation of a series of "improvement programs" in its manufacturing process.
However, this approach has had limited impact on its manufacturing costs for AMG.
"Our general improvement programs have been successful to an extent, but not as successful as we would have liked them to be. The manufacturing process for each product is different, and for some it is more expensive, as it could require more energy or raw materials than other product lines," Lund told FoodNavigator-USA.com.
Novozymes is not the only ingredient firm facing mounting pressures from high energy and raw material costs. Earlier this week, FMC announced it is increasing prices across its entire range of food ingredients. And citric acid manufacturers globally have said that unless this year's price increases are successfully implemented, the market will face possible supply shortages as unprofitable production grinds down.
In contrast to repeated attempts by these firms to increase their prices, yesterday's announcement marks the first time that Novozymes will be passing on higher costs to its customers for AMG. The firm said it has no plans at the current time to implement additional mid-year price increases on the line.
The traditional source of enzymes used to convert cereals into beer is barley malt, one of the key ingredients in brewing. But if too little enzyme activity is present in the mash, there will be several undesirable consequences: the extract yield will be too low; wort separation will take too long; the fermentation process will be too slow; too little alcohol will be produced; the beer filtration rate will be reduced; and the flavor and stability of the beer will be inferior, explained Novozymes.
"Auxiliary enzymes are used to supplement the malt's own enzymes in order to prevent these problems and to guarantee 'smooth brewing operations' at all stages," it said.
Uses include ensuring better adjunct liquefaction; producing low-carbohydrate beer; shortening the beer maturation time; and producing beer from enhanced malts and cereals at lower cost.