Lessafre-owned Bio Springer, based in France, manufacturers its yeast extracts from primary grown yeast on sugar substrates – that is, molasses and sugar syrups. This means that the cost of sugar has a direct impact on the company’s cost base.
Sugar prices reached a 30-year high of 29.74 US dollar cents per lb (454g), according to Index Mundi. Contributing factors on the world stage were drought in Brazil and the pummelling of Australia’s sugar producers first by floods, then by Cyclone Yasi.
Although the FAO’s Food Price Index did detect a slight fall back in prices in April, they remain high and outlook is uncertain. As a result, the Bio Springer is increasing the price of its extracts by around 3 to 5 per cent for all new contracts.
The company has indicated that rising energy costs have a part to play in pushing the prices up.
The use of yeast extracts in manufactured food products has increased in recent years, as they find uses as savoury flavour enhancers in a wide range of products such as soups, sauces, seasonings, convenience foods, snacks, meat products.
This is partly due to preferential use of yeast over other taste enhancers like monosodium glutamate and hydrolysed vegetable protein, as well as general growth in pre-prepared convenience foods. Consultancy Leatherhead International puts yeast market growth at between 3 and 4 per cent per annum.
According to Bio Springer, the pharmaceutical industry’s search for animal-free culture media has also led to increased use of yeast extracts.
In order to help meet the demand Bio Springer started producing extracts at two new plants last year, in China in April and in the US in November.
It is not alone in detecting a market need for more yeast extract capacity. Last autumn competitor Ohly, part of ABF Ingredients, opened a new plant in China to complement existing operations in Europe and the US.
Leiber also increased its capacity by around 50 per cent by bringing its spray drying operations in-house in 2010; and DSM decided to fast-track the expansion of its yeast extracts operations in 2008 to cater to a hungry market.