Switching from HFCS seen raising formulary costs
BakingBusiness.com, December 16, 2010
by Jeff Gelski

KANSAS CITY — Switching to using sugar as a sweetener instead of high-fructose corn syrup in baked foods may increase formulary costs 50% to 80%, said David “Guilley” Guilfoyle, founder and owner of Half Baked Innovations, a Kansas City-based consulting company that specializes in shelf-stable, par-baked bakery technologies and innovation. He added labor costs may rise 8%.

Mr. Guilfoyle spoke during a free webinar at www.foodbusinessnews.net Dec. 15. The Washington-based Corn Refiners Association sponsored the webinar, “The True Costs of Switching from HFCS to Sugar.”

Mr. Guilfoyle gave examples of potential annual cost increases in the switch to sugar from HFCS. He said if a company switched to sugar from HFCS and made 2 million loaves of 16-oz white bread per year, formulary costs might rise $188,000 per year and labor costs might rise $60,000 per year. If a company switched to sugar from HFCS in making 8 million hamburger buns per year, formulary costs might rise $142,000 and labor costs might rise $60,000.

Replacing HFCS with other sweeteners such as honey might lead to formulary cost increases of 140% to 300%, depending on the sweetener type and baked good type, Mr. Guilfoyle said. In the case of making 2 million 16-oz loaves of white bread per year, a company’s formulary costs might increase $331,000 per year if it switched to honey from HFCS.

Companies also might need new equipment to adjust to sugar use. A pneumatic system for granulated sugar might cost $4 million, Mr. Guilfoyle said, while a liquid sugar system might cost $2 million.

Mr. Guilfoyle said in today’s economic climate consumers would be less likely to buy more expensive bread that used sugar as a sweetener instead of HFCS.

Thomas Earley, executive vice-president of Promar International, Alexandria, Va., also spoke during the webinar and said data from The Nielsen Co. show several brands have not increased market share since switching to sugar from HFCS in products. He cited ketchup, tea, bread and soft drink brands.

John White, president and founder of White Technical Research, Argenta, Ill., said the medical community continues to point out sugar and HFCS are similar in metabolic and nutrition attributes. He said consumers who thought they were buying healthier products that had sugar instead of HFCS might be upset upon learning the general opinion of the medical community.

“They are going to get the right information eventually,” Mr. White said of consumers.