The raw materials market

Things are looking bullish in the raw materials market. Strongly growing demand is constantly pushing prices to new record highs. Each tonne of additional consumption is immediately reflected in increasing prices on the world market. Manufacturers of basic ingredients are taking on a second important function. They are the link between the processing industry and global raw material producers with regard to quality, quantity and price.

Take beer for example. Global beer production has risen by more than a third since 1997. This dynamic growth has ensured that the hops and malt market has been completely bought out, resulting in considerable price increases.

Hops: nature takes her time

Over the past few years, on the free market, aromatic hops have gone up by 100% and bitter hops by 150 to 400%. In 2008, too, given an expected global beer production of 1.8 billion hectolitres with freshly harvested alpha acid levels, the alpha shortfall is put at around 800 tonnes. This gap in supply will continue in the long term if beer consumption continues to increase as before, because the hops industry simply does not have the acreage to produce more. And what is more, nothing can be done about this in the short term.

Brewing barley cultivation facing crucial decision

As with hops, at the moment it is not easy to see a quick solution for the problems facing brewing crops. The harvest situation and increasing consumption are only two of the driving factors in the case of malt, however, because the demand for grain has basically skyrocketed. This could be due to higher meat consumption, which can only be satisfied by even greater use of animal feed, or the globally increasing energy requirement that is to be met using renewable raw materials. This is leading to competition for acreage and ultimately for the expertise of those growing the brewing barley.

The international brewing industry is therefore forced to prepare for this insufficient supply of hops and malt by taking its own action. An example of this is that hops contracts have been concluded until 2014 in the major markets of the US and Germany. In parallel to this, ever more effective technologies such as new brewery procedures are being used, allowing higher production from hops and malt.

Sugar is not just sugar

Producers of soft drinks are also caught up in the race for raw materials with one exception — sucrose. Granulated sugar is currently one of the ‘weakest’ raw materials in terms of performance. But given that, the beverage industry must face another ‘weighty’ challenge here. With a strong awareness of the risk of obesity, consumers are analysing more closely both the quantity of energy they consume in the form of sugar, and its composition.

Against this background, sugars with a low glycaemic index (GI) are increasingly in demand instead of sucrose. These sugars are slowly and evenly absorbed in the body, do not greatly affect the insulin level — thus preventing attacks of hunger — and keep the stomach feeling full for longer.

Current studies also indicate that some low glycaemic sugars promote fat burning, so energy from the body’s own fat store is easier to mobilise.

A second trend is the combination of different carbohydrates which, depending on how active the person is, provide the ideal energy mix — from quickly available to long lasting.

A continuing topic is sweetness without any calories at all. Here, sugar substitutes based on multi sweeteners have now captured a firm share of the market. As well as various sweeteners, these sweetening systems also contain functional basic components derived from flavour technology, which prevent the bitter or metallic aftertaste that otherwise occurs with sweeteners.

Milk demand means price of glue takes off

Last but not least, there are other areas which affect breweries and soft drink producers – even if they do not process these raw materials in their end product. A good example of this is the adhesives traditionally used for bottle labelling. These are based on the milk protein casein, the price of which has recently shot up just as drastically as the global demand for milk products.

But the international brewing and beverage industry is finding a wide range of products to solve this challenge — including synthetic wet adhesives which, according to the manufacturers, have equally good adhesive and processing properties. Savings of up to 20% per kilogram can be achieved in comparison with conventional casein adhesives — with greater price stability in the long term.