We all know that ‘Taste is King,’ and that is something that will never change. However, all it takes is a trip to your local supermarket with its empty shelves, and inflated price tags on the items they do have to know cost is a growing concern for consumers and developers alike. In fact, according to Innova Market Insights, 50% of consumers globally say cost and value for money have become more important when making food choices, which has led 2 in 5 consumers to expect to spend less on food and 36% of them planning to do so by buying lower-cost items. For those looking to continue checking these boxes while spending less, utilizing flavor can be what puts you in the driver’s seat for reducing cost-in-use.
Managing to maintain quality, availability, and affordability while remaining profitable is not just the goal but a necessity for success in the current marketplace.
Though the upfront costs of flavor can range from the equivalent of a rounding error on a bill of materials to upwards of 5 to 10 cents each for flavors that can layer to recreate the depth and complexity of real authentic dairy, Lauren Hopkins, Business Development Director at Edlong, asserts that the goal is always getting your product to where you need it to be. She says “I want our customers to know that when we’re asking about cost-in-use, it’s not because we are trying to design a flavor that will max it out. It is to give us guidance on the tools and technology we can use to build that flavor experience for them.”
Madison Giacherio, Edlong Flavor Scientist, echoes this belief that a holistic and transparent approach is needed to maximize flavor’s impact in your product and for your budget. “We are scientists and know that people are very picky when it comes to the food that they love. It comes down to your core problem, and what you need. It’s very important to sit down and know all the details in advance so we can find the best flavor solution for you.”
Commodity Reduction – Combining Flavors to Multiply Efficiencies
As Hopkins discussed in her recent article How Food Developers Can Use Flavor for Reducing Cost in Their Next Development Project, when considering all factors, commodity reduction provides an opportunity for tremendous cost savings.
On top of allowing you to save directly by replacing high-priced commodities with flavor, this path can also provide the stability and consistency needed to keep your products on shelves despite the uncertainty in the market.
Another downstream effect of commodity reduction that can add tremendous value and be an additional source of overall cost-in-use savings is inventory and flavor consolidation.
As Giacherio puts it, “The great thing is that since our flavor will accentuate and work with what is already there, you have to only use 0.2 or 0.3 percent of flavor, for example, as opposed to the thousands of pounds of cheese you would have needed to have the same flavor impact.” She explains how by replacing the commodity with flavor, you can cut out the need for refrigeration, save space in your warehouse, decrease shipping costs, and reduce waste due to the longer shelf life. Though these costs may not appear on the bill of materials, they illustrate the compounding effect of flavor on your overall costs.
However, when reducing commodities, rebuilding the complex and nuanced profiles of the original cream, milk, or butter isn’t usually a simple 1:1 exchange for a single flavor. In addition to finding the right carrier or new ingredients to replace the function of the reduced commodity, it can sometimes take as many as a combination of five or six flavors to reach that perfect flavor match. Which, as Hopkins points out, can pose its own set of problems “The more things you have to add, the more margin for error there is in a production environment. Especially if you are adding five different things in low quantities, you can have dosage and rounding errors.”
Fortunately, Edlong’s flavors allow for customized solutions that turn this potential problem into an opportunity for even more significant cost savings. “We would say, ‘You can combine these two into one and these three into one, and now you are using two flavors instead of five.’” Not only does this benefit the cost-in-use, but also helps inventory management who only has to store two flavors instead of five,” explains Hopkins.
Both Giacherio and Hopkins agree this can also help with improving your minimum order quantities (MOQs). For example, instead of having to buy five flavors at 200 pounds each, you could buy two consolidated flavors making production more efficient while saving space and money.
Concentration and Renovation for Reducing Cost-In-Use
Where consolidation can help reduce costs and your warehouse footprint, concentrating flavors can do the same while also allowing for more flexibility in usage levels or providing that extra impact. Though it may look more expensive in its cost per pound, concentrated flavors can actually come out cheaper in the long run.
This is excellent news for companies looking for ways to improve their product without necessarily having the budget to undergo massive changes.
“Everyone is trying to find ways to reduce their costs, but some people know that their product doesn’t have the impact that they are looking for but they know they can’t increase their costs too much,” says Giacherio. “They might say, ‘Here is my product and I know it is not very cheesy. Is there any way you can assist to boost what’s already there?’.”
Adding flavor can be the thing that pushes your product to where you need it to be, and though not a solution for every situation, concentrated flavors can provide the most bang for your buck to get you there.
Hopkins views this not only as a great value but also as a way to directly lower your cost-in-use. “A customer might come to us in a flavor match scenario where we say we can match at this level, but if you have flexibility in your usage level we can concentrate and potentially drive out costs that way, too.”
Beyond concentrating flavors, Hopkins says there are times when revisiting the flavors you already use could also present opportunities for savings. “Whether from us or other suppliers, there could be a chance that the legacy flavor you are using is over-engineered. Suppose you’ve been using a flavor in a legacy product for 10 years or more. In that case, there is a likelihood that there has been improvement in product form or in raw materials that could potentially help us drive efficiencies and drive out costs.”
Whichever situation you find yourself in, our expert team is always here to help you find the approach and the flavors needed to keep more money in both your and your customers’ pockets.
About the Authors:
Lauren Hopkins, Business Development Director
I’m a Business Development Director at Edlong with a passion for helping product designers and executives launch the next innovative food products. I have an unwavering belief in my team, their ability, and our products that is backed by a track record of customers who have saved time and resources by working with us. Your next great product is on the horizon, and I’ll help you bring it to as many shelves, tables, and hearts as possible.
Madison Giacherio, Flavor Scientist
Madison Giacherio graduated from the Culinary Institute of America with an Associates in Baking and Pastry and a Bachelors in Culinary Science. She has been a Food Scientist at Edlong for four years working on applications that range from beverages to plant-based cheese to bakery.
Topics: Commodity reductionDairy flavors
Resource Type: Article