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It should be a good year for vanilla. Prices are at their lowest point in 20 years, the supply looks to be plentiful and stable, and applications for the favorite flavor keep growing.
"The vanilla price has been running counter to other ingredient costs," which have been increasing, says Phil Sprovieri, sales vice president at Flavorchem Corp., Downers Grove, Ill. With prices declining to nearly $20 per kilogram in 2010, vanilla bean prices probably will hold at historically low levels late into 2011. Sprovieri predicts not only more uses for vanilla but many product developers switching back to pure vanilla after using lower-priced substitutes for the past couple of years.
Vanilla prices hit an all-time high of $130 per gallon for 1X pure vanilla extract in 2004. "During that period, a lot of people, especially in dairy, opted to go with Natural WONF (with other natural flavors)," he says. "Clove-derived 'natural' vanillin was commonly used in vanilla substitutes. But there has recently been a significant run-up of natural vanillin prices due in large part to clove shortages." So, Sprovieri predicts, some product developers should be switching back.
The majority of food and beverage applications use liquid vanilla extracts and flavors. Vanilla powders and sugars are used mostly in baked goods and dry beverage mixes. Even the pods can be used, although almost exclusively by chefs in upscale restaurants.
The difference between vanilla extract and vanilla flavor is defined by FDA regulations (21CFR 169.175)," says Rick Brownell, vice president of vanilla products for Virginia Dare, Brooklyn, N.Y. "Essentially, the only difference is the alcohol content. Vanilla extract has a minimum 35 percent alcohol, vanilla flavor can have less or none. Everything else, including the bean content, is the same.
"The other major difference in the various liquid forms of vanilla is the strength, or fold," he continues. "It can range from a single fold (retail strength) to a 32 fold (oleoresin). There are cost saving advantages with higher folds, but the flavor and aroma is superior with lower folds."
Despite efforts to raise vanilla elsewhere, Madagascar continues to supply most of the world's supply. As a result, the entire supply is subject to the vagaries of that island-nation. Brownell says 2010 reports of vine disease in that country are fading and, while the size of the 2011 crop won't be known for another month or so, the flowering of that crop is proceeding well. While there is some political unrest in the country, "we don't believe any politician in Madagascar can afford a major disruption in the vanilla trade," he says. "There are tens of thousands of rural families that depend upon vanilla for, in many cases, their sole source of income."
"Vanilla is not only a flavoring in and of itself, but its functionality makes it such a versatile flavor," says Dan Fox, director of sales at Nielsen-Massey Vanillas Inc., Waukegan, Ill. "It masks off-notes and can accentuate positive notes. So in a chili dish or a tomato-based recipe, it can cut the acidity; but with strawberry or other fruit flavors, it can accentuate the fruit flavors. The beauty of vanilla is that it serves many purposes in product development, particularly flavor development."
Driving home that point, Nielsen-Massey's summer newsletter had barbecue grilling recipes that suggested vanilla in a home-made barbecue sauce, salad dressing, baked beans and even sprinkled on sweet potato chunks.
Organic is an issue for vanilla, as it is for just about every other food & beverage ingredient. " 'Organic-compatible' is still far more widely used than certified organic vanilla," says Sprovieri, but with the recession over and consumers resuming a commitment to true organics, certified organic vanilla may be poised for significant growth.
Traceability is a challenge for vanilla. "First, there are many links in the supply chain for vanilla beans," says Brownell. "Second, beans are grown on tens of thousands of family farms. Many are very rural and largely inaccessible, especially during the rainy season. Finally, vanilla beans are typically consolidated at curing facilities where they traditionally lose their traceability back to the individual farms. However, traceability of vanilla beans back to the farm is certainly possible, as we have seen with both Organic Certified and Fair Trade Certified beans." But he warns those do come with added cost.
Sustainability is another issue consumers have flirted with. "Most vanilla is already grown under environmentally sustainable conditions," Brownell continues. "Vanilla likes to grow under a forest canopy, so clear cutting is unnecessary and unproductive. No chemical fertilizers or pesticides are used – they are too expensive. The water consumed is almost exclusively provided by rainfall. Even the energy used for the curing process is mostly solar – sun drying of the beans."
Here in the states, Flavorchem claims its natural process to make oleoresin vanilla has no waste by-products. Water and alcohol used in the extraction are reused, and the ground, spent beans also have value.
And economic sustainability for the farmers also is on the radar of consumers. "Fair Trade Certification … requires that the farmer earn enough not only to reinvest, but also to maintain an acceptable standard of living," says Brownell.
Specks of the vanilla seed seem to be increasingly visible. Higher-end ice creams started the process, but now "vanilla bean" is a featured flavor of even store-brand and discount ice creams.
In a nod to label simplification, Nestle started Haagen-Dazs Five in 2009 with a small (six flavors)line of ice creams that had only five ingredients: usually milk, cream, sugar, egg yolks and the flavor of the ice cream. The vanilla version of Five has done particularly well; the overall Five line is now at nine flavors.
True to its socially conscious roots, Ben & Jerry's plain vanilla is Fair Trade Certified, using "vanilla made from beans grown and harvested by small-scale farmers in Indonesia. They're members of local farmer associations that support sustainable farming practices. The premiums we pay for their quality vanilla help them re-invest in their families and communities for a positive change."