“Similar to other food and ingredient companies, Solae continues to be affected by recent surges in world food prices,” Schmitt told FoodNavigator.com. “Over the past 24 months, through productivity and efficiency efforts, we have been able to absorb most inflationary cost pressures via internal efficiencies to mitigate these costs to our customers.”
But the size of recent price rises compelled the company to lift its prices, he added. “The Food and Agriculture Organization (FAO) Food Price Index reports that food prices grew by 5.6 per cent for the first two months of 2011 alone following increases through the fourth quarter of 2010, reaching their highest level since 1990.”
Torkel Rhenman, Solae’s chief executive officer, added: "After extensive review of our business and the current economic pressures, we determined that this price increase is necessary in order for Solae to continue delivering the innovative, high-quality soy ingredients that our customers rely on."
New food safety regulations had also required the company to invest in food safety resources across the globe to adapt to regulatory changes.
But Schmitt said: “Respective to other proteins, Solae soya protein continues to be a more stable choice for food companies. We believe this increase will minimize our long-term customer impact of the recent raw material volatility.”
Regional price increases will vary by product line depending on the market.
Asked about further price rises, Schmitt replied: “We are living in a new environment and new market dynamics. No one is sure what the near term holds.”
But he pledged that the company would “work to best practice in all the business disciplines to engage a pricing structure that gives the best continuity of pricing possible. What we can guarantee is that Solae soy proteins will continue to be one of the most cost effective, high-quality protein sources.”
Solae has production facilities in North America, Europe, Brazil and China where its soya ingredients are produced.
The company’s soya protein is used in a variety of beverages and foods including: Nutrition bars, vegetarian meals, meat products, snacks and bakery products.
Solae’s last price increase was announced on November 18 2010.
Meanwhile, last January, Solae opened a food application centre in Shanghai which it claimed would cut product development times for Asia-Pacific customers.
The facility will supply Asian food processors in countries such as China and India together with those in established markets such as Australia and Japan.
The global soy protein market is valued at about $7bn US dollars, based on 2008 Soyatech soy protein report.