Bakers could be set for further yeast price increases in the coming months as reform of the EU Sugar Regime impacts on yeast manufacturers.

Grumbling from the yeast industry over the price of molasses (a thick syrup produced from refining sugar and used in the production of yeast), which has almost doubled over the past 18 months, could soon lead to further yeast price hikes for craft and industrial bakers in the second half of this year.

Bakers have already seen yeast price rises of between 50-60%, with demand for

molasses outstripping supply in the first half of 2005 (British Baker, June 24, pg 6). Molasses is the key feedstock for growing yeast and accounts for some 50% of production costs.

Supplies will get tighter still as an estimated one million tonnes of molasses is taken off the EU market. This is part of an expected six million tonne reduction in EU sugar availability, arising from the recent agreement to reform the EU Sugar Regime.

The full extent of price changes will depend on individual customer-supplier relationships, but price rises are inevitable, says Marie Parnell, group product manager at Gb Ingredients (formerly DSM).

Suppliers fight back

“Cost pressures on yeast are already leading to price increases in the craft, industrial and in-store market segments,” she warns. “The pressure on costs is likely to continue and may lead to further price increases in the second half of 2006.”

The UK Association of Manufacturers of Bakers’ Yeast (UKAMBY) represents suppliers such as AB Mauri, DCL, Gb Ingredients and Kerry Bio-Science. It has lobbied the Department of the Environment, Food and Rural Affairs to limit the knock-on effects of Sugar Regime reforms on the costs of yeast. Meanwhile, it says it is actively seeking alternatives to molasses, such as glucose syrups, but these will only be available at a significantly higher price level.

“Once relatively plentiful, molasses is rapidly becoming a scarce commodity,” says Bob Price, chief economist of the Food and Drink Federation. “Molasses is not necessarily the best sugar source – pure sugar syrups would be ideal – but the cost of these syrups would be excessive.”

He adds that large-scale conversion of sugar into yeast biomass and the highly energy-intensive manufacturing process is also proving costly as energy prices continue to soar. “No one can have failed to experience the sustained cost pressure driven by the high price of oil,” says Price. “But the impact on companies varies according to their level of dependence. In the case of yeast, direct and indirect energy costs account for 30% of the cost of producing the ingredient.

“So (including molasses price rises) some 80% of the cost of producing yeast has seen significant pressures – ones that are unlikely to go away. These increased costs will inevitably need to be recovered, if the UK yeast industry is to remain viable and sustainable.”

The UK yeast industry needs to use some 100,000 tonnes of molasses a year. Only a third of that is available from domestic sources, from sugar beet processing. Significant quantities of molasses have to be imported and the principle sources of supply have traditionally been Eastern Europe, India, Pakistan and the Far East. But exports have been drying up as these countries utilise their own molasses stocks to meet the emerging market for alternative fuels.

Bio-fuel demand

“Demand for molasses in China has dramatically increased, as it has in Pakistan, where they produce bio-fuel from it,” explains Patrick Smyth, MD of Dublin-based Yeast Products. This, alongside Sugar Regime reforms puts a question mark over the future availability of molasses. “Everybody is waiting to see what that will mean down the road in terms of pricing.”

The growing focus on bio-ethanol production and backing from governments across Europe will turn the screw on the availability of molasses. In light of this, the UKAMBY has urged the government to retain the facility for non-quota sugar (EU sugar produced outside the quota restraints of the Sugar Regime) to be made available to the yeast industry for fermentation.

Under the reforms, any quota surplus has to be disposed of outside the EU at the producer’s own cost, and without the aid of the usual export subsidies. But some of this non-quota sugar should be made available for use within the EU for restricted purposes such as yeast fermentation, says Bob Price. “This will become critical to the future of yeast manufacture.”

Britons tempted by ‘tangy’ sourdoughs

The fashion for sourdoughs has seen these

‘tangy’ breads embraced by food writers, bakeries, delis and, increasingly, restaurants. Creating a sourdough ‘starter’ – which involves developing your own yeast culture rather than adding yeast to the mix – entails mixing flour, water, and other ingredients that have been colonised by wild airborne bacteria. A sourdough starter contains a strain of yeast that is tolerant of the lactic and acetic acids produced by the lactobacilli, giving the bread its unique tang.

The issue of bread flavour is a very personal one and the role of yeast and other micro-organisms in developing that flavour raises passionate debate, says bakery expert Stan Cauvain of consultants BakeTran. Using a particular yeast strain for a sourdough or ‘mother dough’ will help create a distinctive bread flavour to differentiate one baker’s loaf from another.

For bakers considering developing their own starter, the best tip for a successful sourdough, he advises, is to reduce the risk of microbial contamination from other sources as much as possible.

“The conditions in a mother dough need to be controlled to ensure the continued reproduction of yeast cells,” says Mr Cauvain. “If the dough becomes contaminated with other micro-organisms – yeasts, moulds and bacteria – and the storage conditions favour those micro-organisms rather than the yeast (all micro-organisms have their own favoured food and growth conditions controlled by temperature and pH), then development of ‘off flavours’ and loss of performance can become a real problem.”

If bakers do choose to use such techniques, he says it is worth noting first that the characteristic sour flavour may not be to everybody’s taste. “Not all consumers want the acidic bite that often comes with sourdoughs,” cautions Mr Cauvain. “It is worth remembering that bread flavour comes from other ingredients and the baking process, especially the crust.” The advantage of modern commercial yeast is that the risks of contamination, and therefore the loss of the performance of the dough through baking, is considerably minimised, he adds.