The oat beta-glucan industry is tough as prices remain too high for most manufacturers, but as bigger players jump aboard Garuda International says business should be bolstered.
The US ingredients firm’s oat beta-glucan B-CAN received GRAS approval in November 2012 . The food additive can be used in breads, breakfast cereals, cookies, muffins and tortillas as well as beverages, soups and salad dressings.
While business was steady, Garuda’s director of sales and marketing Bassam Faress said the expense of oat beta-glucan at high purity levels was off-putting for many manufactures.
“It’s not cheap. It’s not $2 per kilo, it’s upwards of $60,” he told BakeryandSnacks.com at last month’s IFT.
Garuda International sold B-CAN at 20% and 70% purity levels, the latter being the $60+ ingredient.
“The cost of production and how much you can sell it for is up,” he said.
However, Faress said more ingredients players had come onto the market with high purity oat beta-glucan. “I’m pleased. Bigger giants are in; I see them creating a stir and I’m just going to ride on the coattails.”
DSM and Tate & Lyle were two of the bigger players with oat beta-glucan on the market.
Cost absorption tough
Use of high purity oat beta-glucan was tough to push in the breakfast cereal and bar segments, he said, because cereal makers were reluctant to bump up retail prices.
“Cereal consumers aren’t willing to pay more. The transfer of cost is not one consumers are used to, so cereal companies want to just go with something that works,” he said.
The 20% oat beta-glucan product was therefore a popular choice with cereal brands as it was competitive to what was on the market, he said.
There was interest in the high purity version (70%), he added, but there was disconnect between R&D interest and actual product development.
The high purity version would be ideal for cereal makers, Faress said, as it meant manufacturers could use less for a bigger nutritional punch.
“We’re hoping we can formulate at a much cheaper price. It’s about efficiency; it’s about economies of scale. The more customers we have, the less cost per kilo. As we build customers, we can increase capacity and if we get big names involved, we can manufacture at a much lower cost,” he said.
Despite lower interest in the high purity versions, Garuda International was working on developing an 80% pure oat beta-glucan for the market.