The mixed fortunes of vanilla

About 90 per cent of the vanilla flavouring used in the food and drink industry is synthetic vanillin, mainly derived from petroleum and costing a fraction of the natural vanilla bean extract. However, demand for natural vanilla flavour from real vanilla pods has increased dramatically over the last few years as major food companies, taking the lead from small artisan producers, are shunning artificial vanilla flavours in response to consumer preferences. As demand has increased, prices have risen, from $20 per kg in 2010 to around $300 per kg in 2016. High demand has also depleted the vanilla supply, forcing prices up further. However, it is natural disasters that pose the greatest threat to an already volatile vanilla market.

There are only a few places in the world where vanilla is grown and more than 80% of the World’s vanilla supply comes from Madagascar. Madagascan vanilla pods or beans, from the species Vanilla planifolia, also known as Bourbon Vanilla, have long been accepted as the gold standard for quality and flavour but such heavy dependence on one region makes the market extremely vulnerable. In March 2017 the strongest cyclone to hit Madagascar in 13 years all but decimated the vanilla crop. With winds of 230kph, the equivalent of a Category 4 hurricane, Cyclone Enawo killed at least 78 people and displaced 500,000, hitting the northeast vanilla producing region of the island hardest. Speculative hoarding of existing vanilla pods by middlemen followed immediately and the prices surged to record highs of over $600 per kg.

Madagascar is already one of the poorest countries in the world so perhaps we should be sparing a thought for the vanilla farmers, whose homes and livelihoods have been destroyed. Despite the political transition back to democracy in early 2014, there has been instability in Madagascar since the 2009 coup d’état. The situation remains fragile and crime levels are very serious in some parts of the island. Sadly, the global price hikes have exacerbated this problem by causing an increase in armed robbery of the farmers’ precious remaining vanilla pods. This in turn is forcing some farmers to harvest the pods prematurely, before the all-important flavour components have had a chance to develop on the vine. Not only does this reduce the quality of vanilla on the market but it also means that farmers are unable to command such high prices for their produce. To make matters worse, parts of Madagascar have been suffering with the worst epidemic of pneumonic plague since the 1950s, with 2,603 cases between August 2017 and January 2018).

The global vanilla market is predicted to be in for a rocky ride and recovery will be slow. Stocks of vanilla pods were already depleted due to increased consumer demand and a previous drought but the crop in Madagascar will take years to recover from the effects of the cyclone. Unlike our familiar crops of wheat and maize, which have a short life cycle and can be harvested annually, it takes 3-4 years for a young vanilla orchid to flower and subsequently produce pods.

Vanilla has always been an expensive spice (second only to Saffron) because it is so time-consuming and labour-intensive to produce. Firstly flowers of the vanilla orchid have to be pollinated by hand due to a lack of natural pollinators that are able to navigate the unusual anatomy of the flower. Hand pollination must then occur within twelve hours of flower opening! The pods take approximately six weeks to develop but around six months to mature. Individual vanilla pods ripen at different times so a vanilla crop can’t be harvested all at once like a field of wheat, for example. Each pod has to be examined individually to balance obtaining the highest glucovanillin concentration with splitting, which can lower the market value. The pods then go through a long process of curing, whereby the beans are “killed”, “sweated”, slow-dried and conditioned. The whole curing process takes over six months and is followed by a process of grading, whereby the vanilla pods are sorted for sale based on their quality. The valuable pods are often kept under armed guard before they leave the country.

The vanilla issue is not an easy one to solve. Madagascar has always been prone to tropical storms and vanilla prices have historically spiked after environmental damage to crops, but this is something that could become more frequent and unpredictable due to climate change. Still reeling from the after-effects of Cyclone Enawo in March 2017, Madagascar was badly hit again last month (January 2018) by Cyclone Ava, killing at least 51 people and displacing more than 54,000. Despite the associated risks, vanilla does seem to be profitable for Madagascan farmers to invest in. The increase in global demand for vanilla pods and rising prices has ensured that many farmers can afford to educate their children and build their homes with concrete, instead of the local palm. However, as demand for natural ingredients soars, questions need to be asked about future sustainability of these crops and how farmers, already teetering on the edge of extreme poverty, can be supported in their efforts.

With vanilla prices likely to remain high well into 2018, many companies are having to make tough choices about whether to increase the price of their vanilla-containing products or seek alternative ingredients. 

When I started producing ICHAI in 2013, I was paying £160 per kg for grade A Bourbon vanilla pods but now I’m unable to obtain 1 kg for under £625! Sadly, it is not possible for ICHAI to absorb the vanilla price hike, which is why I have decided to stop producing our Vanilla Chai until the market settles down, or we can develop a new alternative recipe in line with our commitment to all natural ingredients. We still have some Vanilla Chai made with real Madagascan vanilla pods in stock, but it’s going fast….

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By Dr Helen Saini

Managing Director, ICHAI Ltd

https://www.ichaitea.com

Additional references

1 Havkin-Frenkel D, French JC, Graft NM (2004). "Interrelation of curing and botany in vanilla (vanilla planifolia) bean". Acta Horticulturae. 629: 93–102. Archived from the original on 6 May 2014.

2 Havkin-Frenkel, D.; French, J. C.; Pak, F. E.; Frenkel, C. (2003). "Botany and curing of vanilla". Journal of Aromatic medicinal plants.