Economics

When microencapsulation was in its infancy in the early 1970s and food technologists were searching for scraps of information about the concept from any source they could find, there was no lack of apparently good ideas for developing new encapsulated ingredients. Few were so foolish to ignore the cost of encapsulating, but most inventive minds operated on the basis that the real problem was to develop the technology, ie, to make the encapsulate and adapt it to the system. It was generally known that once a prototype is made, the reduction in costs is just a matter of time.

Since 1970 the development of encapsulation technology has been startling; however, the cost of encapsulating has not decreased, but has kept pace with inflation. Some relatively crude, lower—cost methods of encapsulation have been developed, but these have been limited in application where a poor encapsulate was good enough.

Most FDA-approved food ingredients have been encapsulated on a laboratory or small pilot-plant basis, but the real world exists outside the laboratory and there commercial viability of an encapsulate revolves around economics in its broadest sense.

Encapsulated ingredient projects begin with a need or a problem. Sometimes the problem is a matter of poor shelf life. More often a project begins with the concept of an encapsulate that would allow the development of an entirely new product that cannot be available without it. Whatever the need for encapsulation, the wisest first step is not to analyze the various methods of encapsulation that might work, but to look at the project, really a processed food system, in its entirety. Assume that the encapsulate is available and technically satisfactory in all respects. Estimate the cost of the encapsulate, ie, ingredient, coating, and both minimum and maximum processing costs.

Then make a judgment: Under the best technical and economic conditions should this project be taken to commercialization? The answer may be no, and for a variety of reasons having nothing to do with encapsulation. The maze of approvals and evaluations that are prerequisites for taking new processes or products to commercialization can be formidable. But assume that in the best-case scenario the answer is yes. It is then just as important to take a look at the worst case, ie, a product that is more costly than desirable and technical requirements that are not quite fulfilled. A definite yes answer in this case makes the project much more attractive, but a no answer, although perhaps disappointing, at least more clearly defines what is really necessary. Projects having long odds may be abandoned, avoiding an investment and a high-risk gamble.

The evaluation of projects prior to embarking on costly research and development is obviously necessary for all new ideas regardless of whether encapsulation is required. However, there is particular wisdom in carefully evaluating encapsulation projects. All too often problems are solved technically with an encapsulate that never becomes commercial for reasons that may have been obvious from the outset. This is particularly true of systems where low-cost food ingredients have been encapsulated. When a for-mulator must work with a $0.75/lb item that in its raw form costs only $0.10/lb, it is amazing how many other solutions to the problem can be developed in place of encapsulation.

Most encapsulation companies charge for development and preparation of encapsulated prototypes; not to make a profit or even to recover expenses, but primarily to provide that extra insurance that a project has been well thought out and will have some reasonable chance of becoming commercial. Once technical objectives are met, commitment to any financial investment requires consideration and approvals at a relatively high managerial level.

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