Price volatility and climate change continue to impact vanilla agriculture, suppliers warn

19 Dec 2022 --- Environmental variables play a crucial role in the production of vanilla, its farmers and the overall agriculture sector. According to suppliers, sustainable vanilla options will increase in the coming years, but the fluctuating market of the beans remains a challenge for food developers.

FoodIngredientsFirst delves into the sector, spotlighting the ongoing issues around climate change and ethical practices.

According to Juan Felipe Rivera, CSR project manager at Prova, “sustainability is achieved with fair pricing for farmers, legal and decent working conditions, the development of farmers communities and producing vanilla beans that mitigate deforestation or other environmental impacts.”

He says that customers are increasingly aware of agro-product sustainability issues and have become very knowledgeable. 

Price dynamics
Of course, vanilla can be a “tricky spice” due to its price volatility, notes Rivera. 

Vanilla can be a “tricky spice” due to its price volatility.Historically, farmers need help forecasting their revenues from one year to another as they will never know how much vanilla will be worth over the year.  

“Minimum prices are a good way to leverage price instability,” he outlines, adding that this not only targets a fair compensation for the vanilla, “but it also serves as an ‘assurance’ that helps farmers better forecast their revenues for the upcoming years.”

“Price fluctuation is a factor of uncertainties,” affirms Corinne Duffy, global technical marketing manager at Solvay, a supplier of natural vanilla alternatives, such as vanillin. 

Vanilla is not a regulated market, and the production output variations generate regular price surges, she notes.

“It is also important to remember that, due to hand pollination and extended curing process, the vanilla bean has a high price positioning, whatever the crop level. Therefore, vanilla bean usages are more focused on the ‘gourmet’ and premium food categories,” she explains. 

Moreover, quality consistency is crucial for the sustainable development of vanilla. 

“Early harvest of the green vanilla beans leads, for instance, to a loss in quality, which is also regularly impacted by weather conditions,” adds Duffy. 

Sustainability factors 
Besides availability, vanilla production has faced sustainability challenges for years, as have many other natural ingredients that originate from specific tropical countries. 

“The worldwide sourcing relies mainly on Madagascar, which is highly dependent on climatic situations (cyclones, for instance) and is increasingly impacted by climate change. Regularly, bad crops affect the global offer,” Duffy states. 

Meanwhile, Rivera at Prova agrees that climate change plays a massive role in vanilla agriculture. 

“We see how longer droughts or unexpected heavy rains can alter the vanilla cycle and the flowering of the vines. Global production keeps somewhat stable, but at a farmer’s level, we see a decrease in yields regarding past years, at least for Madagascar,” he outlines. 

“Good agricultural practices and favoring well-managed agroforestry models are the solution to help farmers be more resilient to climate change and to produce better quality beans.”

Agroforestry transparency platforms have been in the spotlight and can be used for ingredients such as vanilla. For example, Unilever previously teamed up with US-based Orbital Insight to boost palm oil sourcing transparency. The collaboration pilots technology that uses geolocation data to help identify and map the individual farms and plantations that are most likely to be supplying the palm oil mills in specific supply chains.

Ethical risks come into play
In the past years, the sustainability challenges in vanilla means are more and more linked to ethical risks, too, explains Duffy. 

Previously, ethical issues have come to light in other agri-food commodities such as cocoa and palm oil. 

“The vanilla value chain counts a lot of players, from the farmers, cooperatives to several intermediaries, until the major F&B companies and finally the consumers,” Duffy elaborates. 

“It can result in a lack of transparency along the chain or irregular business practices risk. To sustain the vanilla ecosystem, all the value chain players are responsible for supporting farmers’ living income and better ethical practices along the chain, thanks to higher transparency and traceability.”Vanilla’s output variations generate regular price surges, says Solvay.

Industry developments in vanilla 
Vanilla flavors continue to have a strong hold on the F&B industry as one of the most requested and price-volatile ingredients globally. 

As such, supply chains for vanilla stretch far and wide to meet this demand, and initiatives concerning its sustainability continue to grow. 

The industry’s cohort of next-generation technologies featured prominently at the recent FiE 2022 event held in Paris, France. Each year, the Startup Innovation Challenge 2022 shines a spotlight on companies breaking new ground in the food industry. 

One of this year’s winners was Israeli-based Vanilla Vida. The company has “cracked the code on vanilla flavor potency” with its computer-guided curing process and other high-tech cultivation methods, which the company claims can scientifically craft each batch of vanilla to a specific taste. 

The company’s production system earned the Most Innovative Processing Technology award. Its win comes just two years after its founding. 

“Vanilla Vida grows and delivers top-quality, tailor-made vanilla beans that perfectly meet the market’s demand and business needs, ensuring a stable supply chain and maximum flavor,” Gali Fried, VP of business development and marketing, told FoodIngredientsFirst.

In other new R&D developments, researchers are investigating how to create vanilla strains that are naturally resistant to Fusarium at the University of Florida. Vanilla crops worldwide have been devastated by this fungus, which is often spread by introducing contaminated plants.  

The project led by vanilla expert Dr. Daphna Havkin-Frenkel and Dr. Alan Chambers follows the complete mapping of the vanilla genome and now seeks to understand the functions of individual genes. Read more about the ongoing breeding project in The World of Food Ingredients. 

By Elizabeth Green