Vanilla and pectin
While commodity costs are down, prices for vanilla and pectin may need addressing.

KANSAS CITY — While the bearish market continues for commodity prices in the food industry, food companies are not completely out of the woods when it comes to high ingredient prices. Vanilla and pectin are two examples where alternatives may be considered to address costs.

Prices for wheat, corn and soy generally were down in 2016, and prices for corn and soy ingredients were below that of a year ago.

The pricing situation is different for a few other ingredients. Poor crops years have affected the ingredient prices for vanilla and pectin (a gelling and texturizing agent). Finding alternatives to both ingredients may take some effort.

Madagascar’s vanilla blues

A majority of the commercial vanilla beans sold in the world comes from Madagascar. The vanilla crop in that country was expected to be about 2,000 to 2,400 tonnes this year, according to an August report from Aust & Hachmann, a vanilla supplier based in Pointe-Claire, Que.

Vanilla beans
A majority of the commercial vanilla beans sold in the world comes from Madagascar.

“Now many exporters talk about a crop no larger than 1,300 to 1,500 (tonnes),” the report said.

The 2016 Madagascar crop looks to be both unsustainably expensive and substandard in terms of quality, the report said. Prices in excess of $80 for a kilogram (2.2 lbs) of green vanilla beans were being seen. The market situation possibly could eclipse the vanilla crisis of 2001-04, when prices surpassed $500 per kilogram. Less than three years ago, first-grade extraction beans sold for less than $30 a kilogram.

“On the ground in Madagascar it is a total speculative frenzy where prices for vanilla are increasing on a daily basis,” the report said. “Attempts to regulate quality and vacuum packing have been brushed aside in the rush to take advantage of what seems to be a market with no limits.”

Prices also have risen in Indonesia and Papua New Guinea, according to the report.

Paris-based Prova is addressing the current situation and the long-term sustainability of vanilla.

“At Prova, we work closely with our clients by supporting their purchasing strategy across short-, medium- and long-term needs,” said Alessandra Ognibene-Lerouvillois, chief sustainability officer and chief revenue officer for Prova. “Having valid and reliable information about the vanilla supply is critical to their materials planning, but our expertise does not stop with that information.

“There are times when using vanilla extract simply becomes too expensive. When that happens, we apply our expertise in materials processing and flavor creation to innovate alternatives that perform well while meeting cost constraints.”

Prova offers a portfolio of compound vanilla flavors, including naturals, WONFs (with other natural flavors), synthetics, and naturals and artificials, she said. Provanil, an alternative to vanillin, is designed specifically for application in high-fat systems and products that undergo high baking temperatures.

Prova also applies resources to improve the vanilla supply situation in Madagascar and make it more sustainable long term.

“We concentrate our efforts on education and training through the administration of domestic resources,” Ms. Ognibene-Lerouvillois said. “We support the farmers with several GAPP (Good Agricultural and Preparation Practices) training elements.”

Prova stresses to farmers that high quality vanilla is the only guarantee of a stable market. A Vanilla Durable Bemanevika (VDB) program addresses the root causes of precarious living conditions in Madagascar. The program seeks to improve livelihoods by increasing farmer income through better vanilla bean quality, higher yields, strengthening proportions of cured vanilla sold and diversification into other crops.