Alpha Amylase is an enzyme present naturally in many things from egg yolk to wheat kernels to the saliva in your mouth . It breaks long starch molecules into sugars (small dextrins, glucose and maltose) that can be absorbed easily into the body, or eaten by yeast.
This break-down process is called "hydrolysis." It is mostly used in commercial bread production.
While long fermented traditional doughs allow lots of time for enough starch to break down into the sugar for the yeast to feed on; in modern bread, Alpha Amylase is included in bread improvers to make the process faster for commercial enterprises.
When making bread commercially, yeast is given either sugar, or sugar that results from Alpha Amylase acting on the starch in the flour. Some argue that industrially, alpha amylase is better than sugar because it releases sugar energy at a rate proportional to the rate that the yeast needs it. But the alpha-amylase damages the flour, by breaking it down to get the sugars out. Consequently, flour that has alpha-amylase act upon it holds less water, so more flour must be used, thus pushing the baker's cost up.
Using too much Alpha Amylase in a bread dough can make the dough sticky (as it hasn't been able to absorb enough water), and can lead to undesirably large gas-caused holes in the bread, because the yeast was too active. The resultant crumb will also be somewhat sticky and harder to slice. In industrial bread plants, bread that is sticky or gummy to slice can lead to mangled slices in pre-sliced loaves of bread.
Alpha-amylase activity is measured using a "falling number" scale to indicate what kind of product the flour will be good for. Wheat for industrial baking purposes is usually sold with an indication of its "falling number" measurement. If a wheat has "sprouted" (owing, for instance, to damp times at harvest), it has more alpha-amylase in it, which results in lower "falling numbers." Pasta makers want wheat with high falling numbers, to produce a quality product -- sprouted or damaged wheat, with low falling numbers, can result in pasta that is harder to form, more brittle in drying, and gets softer than desired at suggested cooking times.
Malt is rich in alpha amylases, but many prefer to use a fungal version of alpha amylase (usually derived from the fungus aspergillus oryzae), or a bacteria such as "Bacillus subtilis." While some alpha-amylase enzyme is present naturally in the outer layers of the germ of wheat kernels, far more is produced when the kernel germinates.
Alpha Amylase inhibitors, aka AAI, also called "starch blockers", inhibit the enzyme's activity. Commercially these are often made from protein from kidney beans (white or red.)
Alpha Amylase has been used in making chocolate syrup since 1929.
 BBC. Bread additive 'raises asthma risk'. 23 February 1999. Retrieved April 2008 from http://news.bbc.co.uk/2/hi/health/284451.stm .
Dexter, J.E. and N.M. Edwards. The Implications of Frequently Encountered Grading Factors on the Processing Quality of Common Wheat. Canadian Grain Commission, Grain Research Laboratory, Winnipeg, Manitoba, Canada R3C 3G8. Contribution No M212. Presented at the 101st Association of Operative Millers (AOM) Trade Show, Nashville, Tennessee, May 1997.
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