Food companies, facing increased scrutiny over the potential cancer risks of baked and fried products in the $80 billion crackers and cookies market, are bingeing on enzymes used to reduce the level of toxins.
The beneficiaries are Novozymes A/S (NZYMB) and Royal DSM NV (DSM), the two main suppliers of enzymes that cut levels of acrylamide, formed when starchy foods are browned and coffee beans roasted. While a link between human cancer and acrylamide hasn’t been established, food companies such as Oreo cookies maker Mondelez International Inc. (MDLZ) are turning to enzymes to cut levels, preempting any regulatory move to introduce warnings labels.
“People want to use best-available technology and, if this proves to be a serious issue, food companies want to be able to document that all along they were using the best technology,” Novozymes Chief Executive Officer Peder Holk Nielsen said in an interview. Novozymes is supplying 70 companies globally and demand is “going very well.”
California in 2011 added acrylamide to its Proposition 65 list of chemicals that the state considered to cause birth defects, in addition to being a carcinogen. The U.S. Food and Drug Administration and the European Food Safety Authority are also studying the possible health effects after studies on animals linked acrylamide to some types of cancers.
Mondelez, based in Deerfield, Illinois and the No. 1 in the cookies and crackers market with its Oreo, Chips Ahoy!, Ritz, Wheat Thins and Nabisco brands, is applying enzymes to dough-based products, spokesman Richard Buino said. Scientists are still trying to get a better understanding of how acrylamide forms as well as its potential health consequences, he said.
Cookies and Crackers
Nestle SA (NESN), the world’s biggest food company, has also deployed scientists to explore how enzymes can help, according to spokeswoman Hilary Green.
The acrylamide health concerns are allowing enzymes makers to win clients in the cookie and cracker market, which is valued at $80 billion, according to Ali Dibadj and Alexia Howard, analysts at Sanford C. Bernstein & Co. in New York. The salty-snacks industry is worth another $130 billion.
Still, enzymes are not the only way to reduce acrylamide levels and they don’t work for all food products.
With potato crisps, the complexity of soaking wafer thin slices in an enzyme solution prior to frying means foodmakers are looking at other options, including switching varieties to reduce sugar levels and altering cooking temperatures.
By contrast, dough-based products have manufacturing processes that are much more friendly to the enzyme technology known as asparaginase.
United Biscuits, the maker of Jacob’s Cream Crackers and the McVitie’s biscuits bought by Blackstone Group LP (BX) and PAI Partners in 2006, resorts to enzymes only when other options such as scaling back ammonium bicarbonate and baking times affect the product quality, spokeswoman Alison Harper said.
“We use the whole portfolio of tools in the acrylamide toolbox,” Harper said. “Where we can’t make changes without affecting the quality of the product, we use a variety of enzymes.”
Sales of DSM’s PreventASE enzyme offering, introduced in 2007, are growing at more than 10 percent annually, Food Specialties unit head Hans-Christian Ambjerg said. The Heerlen, Netherlands-based company declined to give a precise figure. DSM’s total revenue dropped 1 percent last year.
“An increasing number of customers evaluating asparaginase as a viable and specific solution for the prevention of acrylamide formation,” Ambjerg said.
For Bagsvaerd, Denmark-based rival Novozymes, the Acrylaway brand has also grown into a “pretty significant business,” CEO Nielsen said.
While the company’s overall sales in the food and beverage segment declined by 2 percent in the first quarter, enzyme demand in the production of healthy food as well as for starch conversion into corn syrup increased. Nielsen declined to disclose specific sales figures or customer names.
DSM shares have risen 32 percent in the last 12 months in Amsterdam trading, giving the company a market value of 9.3 billion euros, while Novozymes, worth $11 billion, has gained 20 percent in Copenhagen. Both stocks outperformed the 16 percent increase of the Bloomberg World Chemicals Index.
Part of the enzyme-sales uptick can be pinned on increased pressure on authorities to introduce labeling to inform consumers of acrylamide levels, with the additional possibility that regulations will follow, said the Novozymes CEO, who took the helm of the world’s biggest enzyme company in April.
At a national level in the U.S., the FDA is studying the possible health effects of acrylamide. The European Food Safety Authority will probably update regulators on any potential risks in the fall, spokesman Ian Palombi said. Canada approved the use of enzymes that combat acrylamides in bread in February 2012, extending its usage to green coffee in March of this year.
The acrylamide issue is “very present” in the government’s mind right now, and the authority has issued recommendations to consumers such as not browning toast too darkly and lowering the frying temperature when making fries, said Robin Churchill, a senior scientific evaluator at the Canadian health department.
“People now are eating more starch-based fried, baked food than they were previously,” said Churchill, who has been working on the topic since 2010 and meeting with food industry associations and regulators several times a year. “There’s a whole bunch of things that we can do that may or may not require labelling but right now we’re not looking at that.”
At the moment, it’s mostly larger food companies that are engaged in evaluating the latest enzyme technology, though smaller companies are also increasingly looking into it, Churchill said.
“Talk to any toxicologist and they will tell you that acrylamide is one of the most imminent health risks we have,” Novozymes’s Nielsen said. “This is not something we invented.”
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