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Gladys Gabriel, global director of purchasing at IFF, opened the first day of IFEAT 2008 with a discussion of the North American flavor industry. The average American, she noted, spends more than he or she makes, and an estimated 43% of US consumers spend $1.22 for every $1.00 they earn. The results are splashed across every newspaper in the world.
Meanwhile, the economic boom of recent years has increased competition for food and biofuel commodities such as corn and soybeans, which have recently hit record highs. As a result, farmers are abandoning essential oil crops because they pay no better than commodities, and certainly don't enjoy the vast subsidies that biofuel crops enjoy.
What’s driving the North American consumer? And how will those drivers shape what is happening at the product development level? And how do companies deliver the increasingly technically and organoleptically complex flavor impacts/targets in a tightening economy? Gabriel's road map included an increased focused on health as the US population ages. Healthy, she said, could mean all manner of aspects such as naturalness, quality, freshness and minimal processing. All of these present the flavorist with myriad technical hurdles from stability to shelf life to cost.
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“There are going to be sourcing challenges,” Gabriel noted when discussing naturals. The stocks of naturals may not be big enough to support all brands, she explained, and land for natural flavor materials faces competition from other more lucrative food and biofuel crops as mentioned before. In addition, overall land fertility is decreasing. What may be necessary is to develop palates with flavorists and product developers to craft a workable supply base.
Finally, she explained, the call for more sophisticated flavor profiles will require novel/patented materials derived from R&D investment. This is a challenge because the cost of capital is rising in this economy. Access to capital is key, Gabriel said, because without it, R&D support is insufficient, making business unsustainable.
“This is where we’ll see a lot of pooling of resources, forming [complimentary] alliances,” she said.