This year, Innova Market Insights identified “redefining value” as one of its top trends to watch in the food and beverage industry. Though cost may be top of mind for both consumers and developers alike, a more holistic view of “value” could be what’s needed to thrive in these challenging times. There may be no better example than flavor. In fact, there are a number of ways how flavor can provide value to food developers and consumers.
Yes, it’s true that with approaches like commodity reduction, flavor can directly improve the overall costs of your product while preserving the taste that customers love. However, I believe that there are also a number of ways flavor can provide tremendous value, even if they don’t always show up as line items on your balance sheet.
Consistency – Knowing What You’ll Get & That You Will Get It
After a couple of years of supply chain instability and market volatility, I’d forgive you if hearing the word “consistency” makes you want to roll your eyes. But, in all honesty, that is something that flavor can provide, and in more ways than one!
To start with, flavors can help you avoid (or get off) the roller coaster that the commodity market has become. Instead of relying on if, when, or how much of commodities such as butter or cream will be available for your product, flavors can erase the guesswork and provide a level of cost consistency. Not only can this create savings, but more importantly, it offers stability for you and price consistency for your customers.
Additionally, being in dairy, you know that the profiles of milk, butter, and cheese can change throughout the year depending on what the animals are eating. This can often lead to unwanted notes (that might require masking) or key missing notes like “green grassy” attribute in butter, something you simply can’t have if your customers expect your product to taste a certain way. Flavors can bring consistent management of the taste attributes that consumers are looking for each time they place your product into their cart.
This consistency can also have downstream effects within your business even before it makes it to your customer’s plate. When developers use flavor for a repeatable product, that consistency is passed down to the manufacturing floor, making life easier for those on the line. With standardized dosages and flavor profiles, you can streamline your process, saving you time and money.
Logistics – Saving Space, Time, & Money
One of the significant benefits of flavor compared to a commodity is its much lower ratio in use. This by itself is extraordinarily valuable, but using much less of something can create even more value than you realize.
Due to its concentration, rather than a truckload of butter (which already adds certain challenges), you can get the same taste results with just a couple of drums of flavor. The savings from shipping alone are well worth it, but it becomes even more impressive when compounded with what you can save on storage.
On a side note, when you are a CFO, the worst money you can spend is in warehousing. Though it is a necessary evil, it offers one of the worst ROIs. There is a lot of value to be found in how fast you can flip your inventory and how little space you use for raw materials.
The amount of storage space needed for palettes of butter compared to the equivalent drums of flavor is immense. This is even before considering the extra resources, such as refrigeration, required to preserve the commodities for what will still be a shorter shelf life than flavors can offer.
Innovation – Small Changes Creating Big Rewards
In addition to redefining value, innovation is another idea that might need another look. Even though there is no shortage of developers working on “the next big thing” to revolutionize the food industry, that isn’t always what’s needed to impact the market significantly. Sometimes small changes can yield big results.
In recent years economy centered around food has become much more globalized. For many of us growing up in the 70’s & 80’s, it would be typical to have the same weekly menu for dinner, spaghetti on Monday, Tacos on Tuesday, Meatloaf on Wednesday, and so on. But now, in our globalized society and with the proliferation of social media and more affordable international travel, people want variety and often get bored much quicker with their choices. When it comes to food, customers are constantly expecting a twist and options!
This is just one more level of value that flavor has to offer. Though flavor is used at a small percentage in the final product, it often has the biggest impact to consumers, it allows you to easily create line extensions and wow your customers with new and innovative items.
Being able to quickly deliver a new SKU with very few changes to manufacturing creates huge cost savings with next to zero capital investment and extremely low risk. This is even before considering the potential profits that a successful new launch could generate as well as solidifying brand loyalty and trust.
Understanding the current landscape and dynamics and listening to customers is critical to find the right solutions and ROI analysis. Edlong Flavor Solutions is constantly partnering with our customers to provide added value through collaborative solutions that can result in product consistency, logistical benefits, and innovation. Contact us today to see how our experts can help with your next project.
Plus, don’t miss our How Flavors can Provide Value webinar recording featuring industry experts from Ingredion, Bunge, Mattson CO, and Edlong to hear more insights on how flavors, ingredients, and collaboration can help reduce costs.
About the Author: Brenda Dehart, Chief Financial Officer at Edlong Flavor Solutions
Hi, I’m Brenda Dehart! I’m the Chief Financial Officer at Edlong. With over 30 years of experience in the food and beverage industry, I help businesses grow, optimize, and find beneficial financial solutions. My extensive acquisition background alongside my managerial experience and understanding of food science has allowed me to support customers as they seek to stabilize and grow their businesses.
From pricing a prototype to understanding financial parameters, I’m the partner for the job. I care about my teammates and our customers, ask cost-effective questions, and I get things done with your best interest and goals in mind.
Your business’s next era of excellence is on the horizon. I’d love to help make it as successful as possible!
Topics: Butter flavorsCheese applicationsCheese flavorsCommodity reductionCream flavorsCulinary indulgenceCultured flavorsDairy flavorsDessertsDressings, Sauces, DipsInnovationMeals & meal centersMilk flavorsSeasoningsSnacks & bakerySoups & sides
Resource Type: Article
Resource Region: EULATAMUS