In eggcess
Yes, the latest joy for bakers across Europe is another commodity rise, with an unprecedented hike in egg prices and tight availability. For once, it was entirely predictable, in light of the British Egg Council clucking about lax EU Member States' compliance to impending regulations 15 months ago. While UK farmers invested heavily to meet new EU laws on restricting battery hen cages, effective from January 1 2012, many of our continental cousins shrugged their shoulders. Consequently, bakers have seen nearly a four-fold increase in powdered egg prices since January. Prices are still rising sharply amid estimates that 100M eggs will be excluded from the UK market after the government confirmed a ban on battery eggs being imported in March.
What's more, raw material costs of shell eggs dictate the market price for other processed egg ingredients and the cost of these has soared from below one euro a kilogram to three euros. "We use both standard and free-range powdered egg ingredients in our products and have major concerns on the continuity of supply of both UK and EU egg products going forward, plus the real limitations of finding alternative sources that meet the latest EU regulations," says Macphie technical director, Fraser Hogg. "With the quantities we use, the potential on-cost to our business could be annualised at in excess of £1M and our selling prices will have to be increased to reflect the situation."
Luckily for Macphie, it also supplies non-egg glaze, for which Hogg notes an unsurprising surge in demand. It appears bakers' tentative relationship with egg replacers is back on the agenda. "Egg prices have rocketed across Europe and we're able to offer a 20% cost reduction based on a 30% egg replacement, which saves you from the high egg prices at the moment, but also gives you a more stable cost price," says Michael Lundtoft, marketing director for Puratos, which has just launched an exquisitely timed egg replacement for cakes Acti-Ovo. If you're developing a recipe from scratch, it could substitute as much as 50% egg. "We've always angled our egg replacement products on the food hygiene benefits but now, for many, the cost aspect is much more interesting."
Egg replacers are nothing new, but while there is a raft of enzyme-, starch- or protein-based alternatives on the market, the cost rationale has not always added up. "There are issues around dealing with the current high price of egg in Europe, and alternatives to eggs are a current hot topic. But those are tactical rather than strategic, because if prices come back to normal again, people will stop looking so closely at egg alternatives," says Paul Morrow, md of British Bakels, which supplies the Balec egg replacer.
The reason is that the egg market is arguably one of the purest indicators of capitalism it responds quickly to demand, unlike seasonal crops. "I've worked on egg replacement three times when prices have gone up you believe you've found a workable replacement and, all of a sudden, the farmers realise there's more money in eggs so they add more barns and the price hits the floor," says Mike Bagshaw, md of International Taste Solutions. "Wheat is an annual crop but eggs aren't. So for egg replacement to be sustainable, it's got to save you significant money, even when the market's on the way down."
Egg alternatives can vary in price over time too if they are based on milk proteins, which are susceptible to the vicissitudes of the market. Nevertheless, the case is being argued for them to be a staple of new product development (NPD). "Even if you look back three or four years, there's only been a week or two where the spot price of eggs has been cheaper than our new egg replacer. So, even for the long term, there should be quite a good chance of making profit from it," insists Puratos's Lundtoft.
Value engineering
Of course, value engineering – still the dominant issue in the industry – is not just about eggs. Over the last five years, firms have driven their costs down to the bare bones and are desperate to claw back the wafer thin margins afflicting the baking trade. "When there was a massive rise in grain prices three to four years ago, people looked to remove cost, and that cost base has been maintained to the point where they can't remove any more. There's a realisation that the only way people are going to regain margin is by innovating," says James Smith, sales director at EDME. One of its products is Duomalt Dark, which can replace up to 25% cocoa in a dry mix, whether it's a bread-style product or a muffin. "It costs about half the price of current cocoa powders per tonne in the UK, so there's quite a saving to be had there," he says.
So there are still costs to be shaved via canny choices of ingredients and some NPD graft. "The big thing for us now is value engineering for clients," says Paul Carlisle, commercial director of Garrett Ingredients, which produces bespoke blends of dairy alternatives. "One example would be removing cream from mixes and replacing it with a powder that could replicate it. We've just worked with a customer and saved him 22% in costs overall. What it also gives him is stability against the rollercoaster of commodities, because we can guarantee pricing for six months." The words "guarantee" and "pricing" are the rarest of bedfellows in the bakers' vocabulary, so it will be interesting to see how many turn to replacement ingredients during 2012.
Ingredients rise and fall
- The cost of guar gum has quadrupled over the last two years and bakers are actively looking for alternatives.
- Potential European legislation around aluminium levels in food could affect applications that use raising agents, such as Irish soda bread.
- British Retail Consortium Global Standard for Food Safety version 6 is having an impact on how bakers handle ingredients, with a greater focus on allergens.
- Bakers are eyeing the potential for new EU legislation on declaring processing aids such as enzymes on consumer packs, following the implementation of B2B labelling.
- A single regulation that covers the specifications for all food additives will apply from December 1 2012, which goes into detail about colours, emulsifiers and ascorbic acid.
Bakery innovation Europe
- Reducing sat fats
Sat fat reduction in bakery has been an aim of the UK government for some time and bakers are on the lookout for ways to slim down the sats. A number are experimenting with cold- pressed rapeseed oil, amid claims it contains around 67% saturated fat, compared with butter's 55%. "We're working with several bakers who are exploring the possibility of using cold-pressed rapeseed oil to replace butter, margarine or olive oil. Early trials are encouraging," says Graham Secker, director of Larchwood Foods, adding that cold-pressed rapeseed oil costs 30% less than butter.
- Adding fibre
According to Mintel's Global New Product Database, 2011 saw over three times as much new product development around high- and added-fibre claims in bakery and cereals compared with 2010. One such ingredient is chicory inulin and oligofructose. "Fibruline is a naturally sourced fibre from chicory and can replace all or a part of sugar and or fat in bakery and cereals formulations," says Sabrina Marnet, product manager at Belgium-based Cosucra Groupe. "Thanks to a high-fibre content, Fibruline can increase the satiation effect of baked goods."
- Increasing shelf-life
German flour treatment firm Mühlenchemie has developed an enzyme preparation to prolong industrially produced bread's shelf-life by up to 15 days. Alphamalt Fresh prevents recrystallisation of the starch, which has gelatinised during baking, and keeps the crumb soft for longer. "Whereas the smaller amylose molecules migrate out of the starch grain and re-crystallise soon after baking, the larger amylopectin molecules initially remain in their non-crystalline form. The hardening of the crumb is ascribed to the firm binding of water by the crystallised amylopectin," says Marc von Bandemer, Mühlenchemie spokesman. "Alphamalt Fresh breaks down the parts of the amylopectin that crystallise."
