European speciality yeast suppliers face Chinese competition
opportunites for European yeast extract suppliers, but the threat
from Chinese suppliers has kicked off, writes Lindsey
Historically, Europe has dominated the production of speciality yeast products, such as yeast extracts, that are used in a wide range of processed foods.
In a global €1.17 billion market, a handful of European suppliers, including BioSpringer, DSM, and Bel Industries, currently supply two-third's of the world's 100,000 MT consumption.
But reflecting the same picture recurrent in all ingredients categories, European suppliers are facing the growing influence of Asia, and in particular China, on the global market.
Access to cheaper manpower and reduced manufacturing costs, on a comparative basis with Europe, have given Chinese yeast suppliers a tool for undercutting European prices.
But the key European suppliers are upbeat, despite the need to remain alert.
"Today, the quality of yeast products emerging from China is inferior to our supplies," says a spokesman for the European speciality yeast products body, Eurasyp.
This is a future threat, but not today, he tells FoodNavigator.com.
Sugar molasses is the key raw material used for making baker's yeast, that then forms the base material for yeast extracts. Unlike for other raw materials, according to the Eurasyp spokesperson, China does not have a clear advantage in terms of cost for molasses.
"One of the main costs in yeast products is the raw material, which is generally sugar molasses. This is not present in large quantities in China, which means they have to import the commodity at global prices," he says.
But raw material is one, albeit key, aspect of the production line. If the country can undercut labour rates and general business costs, then the country's yeast product suppliers will immediately have an advantage.
Not only this, these suppliers can gain market share by targeting their explosive home market.
Food sales in China took off in the mid 1990s rising from under 100 billion yuan (€9.2bn) in 1991 to well over 400 billion yuan (€37bn) just ten years later.
Driving the market is the increased spending power and changing eating habits of China's 1.3 billion people who are transforming the country's food sector, both domestically and in foreign trade.
And while the global yeast market is growing at three to four per cent, in China the market is moving at a 10 per cent pace.
The industrial production of active (live) yeast, 'Saccharomyces cerevisiae', began in 1850. This yeast was used in the production of bread. During the first half of the 20th century the Germans started to consume inactivated yeast as a food ingredient.
Industrial production of yeast extracts began in the 1950s, and in 1974 the first commercial yeast extract containing 5'GMP, a natural nucleotide coming from the yeast RNA, was produced on an industrial scale.
Baker's yeasts and lactic yeasts are the main "primary grown yeasts", cultivated specifically for direct processing into specialty yeast products, such as yeast extracts.
Baker's yeasts are grown mainly on molasses (a co-product of the sugar industry) under aerobic conditions - in the presence of oxygen.
In the food industry yeasts are also grown on sugars that originate from cereals, for example in beer or spirit production. They are called brewer's yeasts or distiller's yeasts. Brewer's yeasts grow under anaerobic conditions (without oxygen), except for the few first hours of the beer production. Malted barley is used as the main raw material, together with hops.
Lactic yeasts are cultivated under aerobic conditions (with oxygen), mostly on whey (a co-product of the dairy industry).
Yeast extracts are the water soluble components of the yeast cell, the composition of which is primarily amino-acids, peptides, carbohydrates and salts.
Produced through the hydrolysis of peptide bonds by naturally occurring enzymes present in edible yeast, or by the addition of food-grade enzymes, they are widely used as a natural flavour ingredient.
Rich in nitrogen, vitamins and other growth stimulating compounds the extracts are also used as an ingredient in media for the cultivation of microorganisms used in the production of, for example, vitamins, dairy cultures and probiotics.
Brussels-based Eurasyp counts the top yeast extract suppliers as members - including BioSpringer, DSM, Kronenbourg, Caillet, Kerry, Ohly, Biolux and Bel Industries.