Cost reduction in the wake of California's drought

by Jeff Gelski
Share This:
Search for similar articles by keyword: [Sustainability]
Dark red areas on a California state map signify drought. They also might bring headaches for ingredient buyers of food and beverage companies wanting to stay in the black, as in profit. Innovative ways to save money on nut, dairy and egg ingredient costs may help alleviate their concerns.

Most of California was in either “severe drought,” “extreme drought” or “exceptional drought” in a U.S. Drought Monitor map released Dec. 18.

Back on July 15, the University of California, Davis released a report showing how the prolonged drought has affected agriculture in the state. The report said in 2014 a net water shortage of 1.5 million acre-feet will cause losses of $810 million in crop revenue and $203 million in dairy and other livestock value, plus additional groundwater pumping costs of $454 million. Direct costs to agriculture would total $1.5 billion.

The July 15 report said fruit and nut trees statewide faced a 41,000-acre drop in irrigated crop areas in 2014. Crop revenues for fruit and nut trees were forecast to be down by $277.8 million.

Relief from nut costs may come from a wheat germ ingredient offered by Inclusion Technologies, L.L.C. The company in July of this year announced it had purchased the assets of the former AnaCon Foods Co. and its 30,000-square-foot manufacturing facility in Atchison, Kas.

The acquisition allows Inclusion Technologies to use wheat germ in creating NadaNut extenders and replacers for use in such applications as ice cream, cookies, candies, nutrition bars, breakfast bars, cereal pies, nut pies and snacks.

“It looks and tastes and crunches like a nut,” said Dennis Reid, vice-president of marketing and business development for Inclusion Technologies.

NadaNut comes in the flavors of pecan, walnut, pistachio and cashew. Inclusion Technologies launched non-bioengineered versions in December. The company is working on creating additional flavors in almond, hazelnut and peanut, Mr. Reid said.

NadaNut may replace 100% of the nuts in a product to appeal to consumers who avoid nuts because of allergens. NadaNut, which costs between $2 and $3 a lb, also may work as an extender and save on costs by replacing 25% to 50% of nuts.

“Walnuts and pistachios and cashews, all these nuts are $5, $6 a lb now,” Mr. Reid said. “They are pretty expensive with the volatility of supply, and the drought didn’t help.”

Food manufacturers might save as much as $3 a lb by using NadaNut, he said.

“On a cost-savings basis, I mean it quickly gets up in six digits, and most companies want to see $100,000 in savings before they do a cost-reduction program, and we get up there pretty quickly,” Mr. Reid said.

High-moisture environments, such as that found in a batter, may bring processing challenges with NadaNut, he said.

“It will soak up the moisture a lot quicker than a nut will,” Mr. Reid said.

Bringing down dairy costs

The July 15 University of California, Davis report also examined dairy prices and found the middle range estimate for the reduction in dairy output in 2014 is 1.5% relative to an average year. The drought is leading to higher feed costs. According to the July 15 report, alfalfa hay prices increased 40% from January 2014.

DairiConcepts, Springfield, Mo., has introduced Amplifi to save on dairy costs. It involves a process of blending and/or enzyme-modifying dairy components. Heat is applied at the end of the process, which creates a concentrated paste with “amplified” cheese and dairy flavors.

Amplifi has been shown to enhance dairy flavor impact and reduce application costs by replacing bulk cheese and dairy ingredients. Because less Amplifi is used to achieve the same flavor profiles as bulk dairy ingredients, it is possible to reduce the fat, sodium and calorie content in some applications.

The Amplifi portfolio includes more than 120 flavors and strengths of traditional and ethnic cheeses, butter, yogurt, cream, sour cream and cream cheese. Potential applications include appetizers, baked foods, process cheese, crackers, dips, dressings, fillings, icings, sauces, soups and spreads.

Save on egg costs

Restaurant trends, maybe more so than the California drought, have affected egg ingredient prices. After McDonald’s launched Egg McMuffins with egg whites and no yolks, several other restaurants followed with similar products. Thanks to demand, dried egg whites were selling for $11.50@$12 a lb, f.o.b. plant, on Dec. 19, which compared with $8.40 a year ago.

Plenty of options exist for companies wanting to save on egg costs.

Penford Food Ingredients, Centennial, Colo., launched GumPlete systems at SupplySide West in Las Vegas in October. The blend of starches and gums has been shown to improve texture and allow for a clean flavor release, according to Penford. Besides egg replacements, other applications include baked foods, dressings, dips, soups, sauces and beverages.

MGP Ingredients, Atchison, Kas., promotes Arise 6000 and Arise 8000 wheat protein isolates for their abilities to replace egg whites. Arise 6000 has shown to be effective in increasing the firmness of pasta as well as increasing dough extensibility, water absorption, bread loaf volume and crumb firmness. Arise 8000, which is unmodified, also has shown enhanced mixing capabilities and high viscoelastic properties.

Agropur Ingredients, La Crosse, Wis., has developed egg alternatives under the BakiGen bakery ingredients line. The alternatives follow a metric of industrial egg use that equates to three primary levels: cookie-type applications, muffin-type applications and high-rise, cake-type applications.

Advanced Food Systems, Inc., Somerset, N.J., offers BakeRite ER27 whole egg powder replacer. It has been shown to replace up to 65% of the whole egg powder in cupcake formulas. It also may be used in other bakery applications and has been shown to create products lower in fat and cholesterol.

Natural Products, Inc., Grinnell, Iowa, offers Blue100 whole egg replacer, which is a soy-based system designed to deliver equivalent functionality as whole eggs (powder or liquid) in a variety of sweet baked goods.

J&K Ingredients, Inc., Paterson, N.J., offers Vita-Ex egg extender to reduce the costs of using eggs in sweet goods, Danish, rolls, donuts, cookies and cakes by 20% to 66%. Vita-Ex is made from such ingredients as egg yolks and whole egg solids.

Arla Foods Ingredients, Viby, Denmark, offers the Nutrilac egg replacement range to increase functionality in cakes. The ingredients may be used to substitute up to 100% of the eggs used in recipes.
Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.

 

 


The views expressed in the comments section of Food Business News do not reflect those of Food Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.
   

READER COMMENTS (1)

By ronni 1/6/2015 4:29:05 PM
I was saddened to see the sentence 'NadaNut may replace 100% of the nuts in a product to make it allergen-free' Wheat is considered an allergen and FALCPA requires it to be labeled. Customers will need to know they can no longer have 'gluten free' on their labels if they use this nut extender.