Borregaard is increasing prices for its vanillin products across the board due to the drastic oil price increases and is looking at ways to improve efficiency at its plants.
Vanillin is the aromatic substance associated with vanilla. Today it is usually made from oil derivatives or wood, and pricey natural vanillin from vanilla beans is said to make up less than one per cent of the market.
Borregaard supplies three main types of vanillin to the market: nature identical vanillin from guaiacol, an organic compound, called EuroVanillin Regular; artificial ethyl vanillin from oil derivatives, called EuroVanillin Aromatic; and EuroVanillin Supreme, which comes from spruce tree lignins.
The company has said it is increasing prices for all three by between 10 and 20 per cent. For the Regular vanillin and the Aromatic ethyl vanillin, this is directly linked to increasing oil costs, Thomas Marwedel, business director, told FoodNavigator.com.
Oil prices have been subject to astronomic rises in the last 12 months, putting pressure on industry of all kinds.
"We are unfortunately no longer able to carry this increase alone and see no other way than to share a part of the cost with our customers," Marwedel said.
He declined to give specifics about the pricing levels for Borregaards vanillins, but did say that covering costs appropriately is crucial to be able to sustain quality level in the long term.
The increase also affects its 'green' Supreme vanillin, from spruce tree lignans. Thomas said that excluding this would bring about a run on already tight supplies. Borregaard says it is the only supplier of this kind of vanillin in the world, and at present is not able to meet demand.
Out of the total world production of vanillin, vanillin from lignin makes up about 15 per cent, and vanillin from guaiacol about 85%.
"The interest for green vanillin is increasing a much higher speed than the guaiacol based vanillin due to renewable resources," Kurt Ove von Husby, market and sales director, told FoodNavigator.com. "It seems like customers are focusing more and more on the environmental issues linked to oil and CO2."
The company says it "does not waste a molecule" of the wood. The fibres are turned into cellulose food, building materials, textiles and other uses, and the sugar compounds form the raw material for bioethanol and yeast production.
Borregaard is presently taking a look at all the factors in production process, in a bid to keep down costs. The first stage is to improve efficiency by de-bottlenecking all its plants. It may also look at increasing production capacity down the line, but there are no firm plans in place for that at this stage.
Marwedel reassured strategic customers that the company "will secure the contracted volumes".
Grades and blends
The Supreme vanillin is said to have a warmer, smoother vanillin profile compared to the Regular, which is described as "sharper and more synthetic". Aromatic vanillin, on the other hand, is three times stronger than Regular.
The company is also starting to offer custom-made vanillin for its customers, which could well help meet their needs without spend so much.
Its first vanillin blend product, EuroVanillin Plus, especially for food uses, is already available. It is a combination of EuroVanillin Supreme and malto dextrin, which is said to result in the same smoothness of Supreme at the intensity of the Regular - but at the price of the latter.
"Utilising out experience and competence together with passion for the vanillin-world, we also produce dry mix solutions that better suit our customer's needs," said Marwedel.