Vanilla, recognised as the world's most popular flavour, has had a rough ride in recent years with the price rising steeply as a result of tropical storms and a highly contested presidential election in Madagascar, the country that accounts for over 50 per cent of global production.
Prices have risen dramatically, up to five times more than before storms hit the region. In an attempt to meet market demand, some farmers are picking immature vanilla beans, which reduces yield and diminishes quality.
The situation has similarly affected other growing regions, such as Indonesia, which with over 10 per cent of the market is the world's second largest producer. Just as has happened in Madagascar, prices of exports from this region have risen drastically, and yield and quality have declined due to the harvest of immature beans.
As a result of this situation, some flavour manufacturers have responded by increasing prices or pushing lower cost, synthetic vanilla flavourings. Food ingredients company Danisco writes this week that it has taken the approach of providing custom solutions to clients. "We are continually working with our key customers to find ways to supply them with the quality they desire," said said Stephen Catling, president of Danisco's flavour division.
In a bid to achieve this goal the company is establishing new growing regions. "Vanilla is our largest product in the flavour division, as a single product group. The vanilla bean represents our single largest raw material that we buy," Catling continued.
The company has sent experts to Uganda and India to review current crop situations, provide technical expertise and develop partnerships.
"Vanilla turmoil, such as we've seen in Madagascar, is something we'd like to avoid, because it's really tough on the dairies. They want to buy vanilla extract with price stability, which is what we are trying to achieve in developing alternative growing regions," said Catling.
Danisco has also added organic vanilla to its range."A number of the bigger dairies started to create the demand for organic vanilla," said Catling. Estimates for worldwide organic use vary, but experts have projected the production to be at 20 to 30 metric tons for extraction. Organic beans, used whole, also have experienced good consumer demand, claims Danisco.
"Madagascar is a key growing region, but is one of the most difficult regions to work with. We've been getting our organic vanilla from an alternative growing region which has received the certifications required for the United States market."
Every country has their own requirements for certifications, but generally organic crops are grown without chemical fertilisers, insecticides or herbicides. "From the Danisco standpoint, organic products command a 30 per cent price premium," said Catling. "As a responsible ingredient supplier, it is our duty to have a portfolio of products that caters to where the market is heading."
In addition to the region already being utilised by Danisco for organic beans, the company has sent specialists to Uganda to work with the European Union in achieving organic status for the market. This is important, writes Danisco, because the European demand for organic vanilla is growing, with Germany currently Danisco's key market.
Danisco develops and produces food ingredients, sweeteners and sugar. The group employs 10,000 people in 40 countries. In 2000/01, Danisco reported net sales of €2.9 billion.