Vanilla prices lead industry to explore alternatives

1 May 2019

Vanilla is one of the most popular flavourings on the planet – and one of the most expensive – leading to a thriving market for alternatives, but vanilla beans are still in high demand.

An estimated 95% of global vanilla flavouring used in products like ice cream, baked goods and confectionery is artificially derived, even as demand has increased for natural vanilla bean-derived flavouring. Vanilla bean prices have seen enormous fluctuation in recent years, pushing some manufacturers toward synthetic vanillin, but others have reverted to natural vanilla due to a broader consumer push for natural ingredients.

Vanilla prices lead industry to explore alternatives
Companies have a wide range of vanilla flavouring options

Cured vanilla beans are expected to remain expensive in the coming season, although a successful crop this year means prices are likely to be about 10-15% lower than 2017’s record level, when black, non-split Madagascan vanilla reached $635 a kilogram, up from just $100 a kilogram two years earlier. Suppliers attributed the surge in prices to increased demand for natural vanilla in luxury products, and this has carried over into the mainstream with the drive toward clean label ingredients. Major players like General Mills, Nestlé, Hershey and Kellogg, for example, have pledged to use natural vanilla, with all the supply challenges that it entails.

Sustainability is a big issue for vanilla, and several industry-backed initiatives aim to improve vanilla quality while also reducing prices and protecting the livelihood of farmers. Established in 2016, the Sustainable Vanilla Initiative is one of the largest, with members representing 70% of global vanilla bean purchases right along the supply chain, from vanilla bean traders to food manufacturers. International flavour and ingredient company members include Barry Callebaut, Blommer, Firmenich, Givaudan, Symrise, Kerry and Mane. The initiative focuses on vanilla grown in Madagascar, which produces about 80% of the global crop.

Meanwhile, even the entire global vanilla bean harvest would be insufficient to meet demand for vanilla flavouring. And despite the recent reduction in vanilla’s price, it is still far more expensive than available alternatives. Vanillin, the main flavour component of cured vanilla beans, can also be derived from pine bark, clove oil, lignin and rice bran to produce naturally sourced vanillin, while most artificial vanillin comes from a petrochemical precursor called guaiacol. Whether it is synthesised from a natural source or not, the resulting vanillin is chemically identical.
Flavour houses routinely offer a range of both natural and synthetic versions of vanillin, and companies use different raw materials. For example, Solvay makes natural vanillin by fermenting ferulic acid from rice bran oil, using a proprietary strain of yeast. And French flavour firm Mane uses eugenol from clove oil to make its natural vanillin.

However, vanillin is just one flavour component in vanilla – albeit the largest one – meaning different vanilla bean varieties continue to be in high demand for subtle differences in flavour. The growing region, such as Tahiti, Madagascar or Mexico, impacts vanilla’s flavour profile with flavour notes that might be spicy, creamy, botanical or sweet. As prices look set to remain high this year, product developers will need to weigh up the importance of various consumer demands, including for flavour complexity, naturalness, and low cost in use.