Ingredient Cost Optimisation in Formulation

Cost optimisation is not buying cheap ingredients

Fluctuating ingredient costs push food manufacturers into a constant search for savings. However, simply switching to an ingredient with a lower price per kilogram often results in lost quality, higher dosage or more waste. Real cost optimisation aims to lower total cost while protecting the quality perceived by the consumer.

Calculate cost in use

Comparisons should be made on cost in use, not price per kilogram. A spice with high aroma strength gives the same flavour at a lower dose. A high-viscosity starch gives the same consistency in smaller quantity. For protein ingredients, cost per kilogram of protein should be the basis, with values converted to the same (as-is) basis.

Increase yield

In meat products, pea fibre, wheat fibre and potato starch bind water and reduce cooking loss, so more saleable product is obtained from the same raw material. In bakery, fibres help retain moisture and increase slice yield. Yield improvement must be planned within regulatory limits and the product definition.

Partially replace expensive components

Egg powder in place of liquid egg can reduce cold chain, waste and labour costs. Replacing part of the fat with fibre and water lowers both cost and calories. In hybrid products, replacing part of the meat with pea protein and textured wheat protein provides cost flexibility. Every substitution should be verified by sensory testing.

Find balance with blends

Using a blend of pea and rice protein instead of a single expensive protein balances the amino acid profile and provides flexibility against price swings. Likewise, fibre and starch combinations make it possible to lower the dose of a single high-performance ingredient.

Optimise dosage

In many formulas some ingredients are used at a higher dose than necessary as a safety margin. Stepwise dose reduction trials and sensory difference tests allow dosage to be lowered to the point where consumers notice no change. Homogeneous blending and accurate weighing also prevent unnecessary overuse.

Reduce waste

Ingredient that cakes, picks up moisture or expires is a direct cost. Correct storage, FEFO stock rotation and order quantities matched to consumption reduce waste. Production stoppages and rework caused by ingredients are also hidden costs.

Purchasing strategies

Combining shipments, planning periodic purchases, buying several ingredients from the same supplier and choosing the right pack size lower unit cost. Over-tight specifications also raise cost; choosing a grade that is sufficient for the application saves money.

Sourcing notes

Across spices, proteins, starches, fibres and functional ingredients, PERDIST identifies the grade sufficient for your application, compares alternative sources and helps lower total cost by combining shipments.

Frequently asked questions