Strategies for addressing high vanilla prices

by Donna Berry
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Bundle of vanilla bean pods
Vanilla has experienced periodic price swings through the years because of sourcing issues and currently is in the midst of a shortage.

KANSAS CITY — Vanilla is unique, as it is the only flavor to have a standard of identity. It is also the only flavor that may be specifically identified on ingredient legends. Such language as “pure vanilla extract,” “natural vanilla flavor” or similar are allowed. All other natural flavors are simply designated as “natural flavor.”

Pure, all-natural vanilla flavor is the direct extract from properly cured and dried fruit pods of the vanilla orchid, primarily Vanilla planifolia. Vanilla has experienced periodic price swings through the years because of sourcing issues and currently is in the midst of a shortage.

“Globally, demand for pure vanilla extract continues to grow,” said Amy Loomis, business development manager, Synergy Flavors, Wauconda, Ill. “This is in response to consumer preferences for naturally flavored products.”

The demand, coupled with the smaller-than-average vanilla crop last year in Madagascar, which is where more than 85% of vanilla beans are cultivated, resulted in a recent shortage of quality vanilla extract. It is a classic supply-and-demand scenario, which is why vanilla prices are currently quite high.

Vanilla planifolia plant
Pure, all-natural vanilla flavor is the direct extract from properly cured and dried fruit pods of the vanilla orchid, primarily Vanilla planifolia.

Part of the problem dates back to around 2010 when there was an abundance of vanilla, which resulted in a significant price drop. Responding to lower prices, Madagascar farmers began giving less attention to vanilla cultivation. Many also switched acreage to other plants, mainly palm. After shortage issues surfaced in 2013, farmers took note and made changes to meet demand, but apparently not enough.

“The 2016 crop in Madagascar is projected to be within typical ranges,” Ms. Loomis said. “In the short term (six to nine months), extract prices are likely to remain firm until the 2016 crop can be processed into extract, which will be in early 2017.

“For the longer term (two to three years), the global vanilla demand deficit needs to be addressed through vanilla cultivation in new regions.”

However, this is not a quick fix, as it takes two to three years for new vines to bear fruit (beans). To address the current situation, there are a number of possible reformulation approaches. For example, partnering vanilla with another flavor is a growing trend. This allows for a reduction in vanilla use, which helps keep costs down.

“Fruit-cream flavors, such as orange cream, are popular combinations where vanilla plays a strong supporting role,” said Paulette Lanzoff, technical director at Synergy Flavors. “Using natural vanilla flavor W.O.N.F. (with other natural flavors) in the cream portion can be a way to manage extract costs while still maintaining natural flavor declaration, provided all flavor components are natural.”

Orange and vanilla cream swirl cupcakes
Partnering vanilla with fruit-cream flavors, like orange cream, may help keep costs down.

Even with straight vanilla-flavored products, natural vanilla flavor W.O.N.F. is a smart option, as it is the easiest and fastest way to mitigate the cost impact of higher pure vanilla extract costs, said Ms. Loomis.

“These flavors can typically be used as direct replacement in many applications; however, the swap usually requires ingredient statement changes,” she said.

Carol McBride, category director-sweet, Symrise Flavors Division North America, Teterboro, N.J., said, “The most important aspect of vanilla flavor W.O.N.F. is that this labeling option allows you to differentiate your product and create a signature vanilla flavor. Signature vanilla flavors could be traditional vanilla with a hint of something else, such as brown sugar, citrus, spice and even  blossom or fruity notes.”

By creating new vanilla flavor combinations, processors reduce dependency on vanilla extract during this challenging year of the vanilla bean shortage, while at the same time invite consumers to explore new flavor profiles.

“If pure vanilla extract is desired, reformulation using a concentrated vanilla extract, such as a 10-fold in place of a two-fold, may provide some efficiencies, provided the manufacturer can handle and dispense a concentrated pure vanilla extract,” Ms. Loomis said.

Smoked vanilla ice cream
Smoked vanilla profiles in ice creams are on the rise.

Christopher Warsow, corporate executive chef, Bell Flavors & Fragrances, Northbrook, Ill., said that he has seen an increase in smoked vanilla profiles in ice creams.

“The sweet aromas of vanilla paired with a delicate amount of smoke are very complementary,” he said.

The combination also allows for a reduction in vanilla usage.

Vanilla bean specks also may be included in recipes, but these add virtually no flavor. Bean specks are all about enhancing visual appearance.

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By Casper Jim 8/28/2017 5:54:59 PM
I just saw a vanilla prices soar and it is amazing. The price of Vanilla beans go up to $500 per kilo. Where in Australia that we can sell our vanilla produce for that price? Please advise. Jim

By John Gusa 10/25/2016 5:57:02 AM
I want Papua New Guniea to come back in its vanilla as its main products under primary industry..

By Richard Cornell 4/26/2016 12:16:56 PM
How much trouble is it to grow these plants?

By Jon 4/26/2016 8:31:08 AM
Good article