Ingredients squeezed out by commodity pressures

Among the major industry players to alter their recipes slightly is General Mills, which said it is using walnuts in its Pillsbury Turtle cookies to replace pecans, which are more expensive. General Mills also claims to have already cut manufacturing costs by 10 percent by reducing the number of spice and ingredient pouches in boxes of Hamburger Helper meals, as well as halving its pasta shapes. Meanwhile Hershey is substituting vegetable oil for part of the cocoa butter that is typically used in some of its chocolates as a cost-cutting measure, according to reports. Kirk Saville, spokesman for The Hershey Company, would not comment on this point. Instead he told FoodNavigator-USA.com: “Hershey is committed to making the world's best chocolate and confectionery products with the highest-quality ingredients. “We continue to make Hershey’s, Hershey’s Kisses and Reese’s Peanut Butter Cups with pure milk chocolate - as we have for over a century. As a matter of fact, our portfolio includes far more pure milk and dark chocolate than any of our competitors.” Hershey announced last week that it is raising its own wholesale prices for chocolate bars by 11 per cent. The increase, which will apply to its entire domestic product line, comes on the back of a “significant” rise in input costs, including raw materials, packaging materials, fuel and transportation. Meanwhile some ingredients companies claim to be benefiting from a shift in formulation. NutraCea says it has recently experienced sales growth in stabilized rice bran, which is claims adds functionality and health benefits at an affordable cost. Kurt Kreuter , NutraCea vice president, Food Ingredient Division, told FoodNavigator-USA.com: “Stabilized rice bran can in fact have a very definitive role in reducing formulation costs while, in many cases, improving the nutritional profile of a processed food.” He highlighted two applications of rice bran which are particularly relevant for cost savings. Kreuter said: “Rice bran (NutraCea’s RiBran Isolate) was recently approved by USDA for inclusion in comminuted meat and poultry products. “It’s role is that of an extender and binder and it demonstrates significant cost savings to manufacturers as they replace meat and more expensive soy based (and other) ingredients.” Similarly rice bran is said to be highly functional in coatings and batter for fully cooked deep fried foods. Kreuter added: “A relatively small inclusion of rice bran in batter mixes has the effect of extending the batter due to higher water absorption while blocking fat uptake in the deep fryer. “Operators and manufacturers are especially interested in reduced oil uptake for the favorable nutritional impact as well as the significant cost savings associated with reduced edible oil usage.” However, one food industry analyst warned that taste could be affected when ingredients are altered. Robert Moskow, of Credit Suisse, quoted in an article in The Wall Street Journal, said: “The risk of tweaking formulas too much is that slowly and almost imperceptibly, you gradually alter the taste ... so that after five alterations, you have something that tastes different than it did five years ago."

Ingredients squeezed out by commodity pressures

Food companies are changing their formulations and switching to cheaper ingredients in an effort to tackle rising commodity costs.

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