Take a quick look at the ingredients label on your vanilla ice cream. You may notice that the vanilla flavor is artificial. This is to lower the cost since natural and pure vanilla extract is very expensive.
Vanilla offers a smooth, rich flavor popularly used in ice cream, pastries, yogurt, coffee, and more. Its smooth floral aroma is also used in home products.
As a result, vanilla is highly desired by consumers.
The high cost of vanilla extract is due to the labor-intensive growing, pollinating, harvesting, and processing of the bean. This plant is only grown in a few small locations of the world, making it harder to obtain if seeking a pure product. When you factor in import and export regulations and fees, and loss of product due to theft and severe weather, the overall cost exorbitantly increases.
Once you become aware of why vanilla extract is so expensive, you may begin to appreciate just how valuable every drop is. Read on to learn more.
1. Lengthy Growing Process
Referred to as a “bean”, vanilla is a fruit that is produced on a vine from a vanilla orchid.
Vanillin is the chemical compound that gives the bean its flavor. This is the only kind of plant that produces the vanilla flavor.
It grows well amongst shade trees taking up to 4 years to mature and bloom. Blooming only takes place once a year on one day on the plant.
There are not enough bugs or birds to pollinate the flowers on the day of blooming. So, the flowers must then be pollinated on the same day by hand.
Beans will form and be ready to be skillfully handpicked in about 9 months.
The harvest is then cured and dried which takes a few more months, resulting in a year-long process to pick and prepare the beans.
The long amount of time it takes for a plant to mature and then develop beans does not allow for quick cash flow. This means that if beans are not ready for harvesting, there will be greater demand or supply shortages that will ultimately raise the price.
2. Harvesting And Processing Vanilla Beans
The production of vanilla is labor-intensive and time-consuming. Not only are vanilla plants hand-pollinated, but the beans are handpicked.
To produce one pound of processed vanilla, 5 to 7 pounds of vanilla beans are needed.
The extract is then made by soaking the beans in a mixture of ethyl alcohol and water of a minimum of 35% alcohol and 13.35 ounces of beans per gallon. The vanilla is soaked for about 6 months to obtain the optimal flavor. The product is then packaged.
The amount of time to harvest beans and make the extract is lengthy. Farmers need enough income to last them throughout the whole year until it is time to harvest again.
3. Labor Demands
There are initiatives to protect laborers’ livelihoods by establishing standards for prices and selling volumes, along with good growing conditions and security to prevent crime and theft.
When crops are harvested by hand, it will cost more time and effort to produce the crop and pay the laborers a fair wage.
Farmers of vanilla crops have generational knowledge to skillfully grow and harvest the plants. This knowledge and hard work is something people will pay for.
The demands of this type of work can also cause labor shortages. This will result in higher costs as well.
4. Geographical Locations
Vanilla crops are grown very close to the equator within a distance of about 10 to 20 degrees.
About 85% of the beans come from Madagascar. The remaining supply comes from places such as Mexico and Tahiti.
With vanilla only able to be grown in a small portion of the world, the supply will be lower with greater demand, raising the overall costs.
5. Weather Conditions
The vanilla plant is delicate, prone to damage, and must be treated gently. To thrive, the plants need an ideal climate, soil, minerals and nutrients, sunlight, and water.
Severe weather conditions affect areas where vanilla is grown.
In 2017, about 30% of Madagascar’s vanilla crops were destroyed by cyclones, creating a global shortage.
When these cyclones destroy crops, there is less yield, resulting in higher prices. It will take longer to regrow crops due to the long growing season mentioned above.
Flooding, mudslides, high winds, and heavy rains will affect not only the crops but the buildings that are used to house and process the products, farmers, and equipment.
This can create an inconsistent income for vanilla farmers when they are at the mercy of the weather.
Prices will be higher as they wait years to recover the loss.
6. Import And Export Costs
Vanilla extract is shipped globally. The beans are handled and exported carefully to prevent the loss of product and freshness of flavor.
Madagascar has exporting standards in place to protect the integrity of the product and its farmers.
Food imports that come into the United States must follow regulations from the Food and Drug Administration (FDA), which include standards for labeling, consumption, and inspection.
Exporting and importing require paperwork, officials to monitor the process, shipping and handling, and tariffs.
The highly-priced vanilla has brought close attention to it and with that organized crime and theft.
Farmers have armed themselves to protect their crops, often harvesting early to prevent complete losses due to theft.
Some farmers will prevent theft by branding their crops with a metal pronged brand.
Theft results in a lower yield and quality of the vanilla bean harvest.
This concerning situation raises the cost of vanilla due to reduced supply and the need for security measures.
8. Demand And Market Conditions
Vanilla is increasingly high in demand due to its unique flavor, aroma, and uses in food and other products. The global market demand is predicted to reach $4.3 billion by 2025.
This demand for vanilla extract combined with many factors that contribute to low supply will exorbitantly raise the cost.
However, if demand lowers due to market conditions such as a recession or inflation the demand will go down, resulting in lower overall costs.
Pure vanilla extract can cost $14 to $47 for only a few ounces, whereas imitation vanilla extract is less than half of that while offering more than double the amount of liquid.
Imitation vanilla extract is chemically made using products such as lignin (wood pulp waste polymers) or a tree resin (guaiacol). These chemicals are oxidized to synthetically make a vanillin flavor.
Simply put, pure vanilla extract is sourced from its original plant with extensive labor and not made as a result of a chemical process. The cost of the real thing is going to be higher.
Vanilla extract is expensive. Many factors contribute to the high cost.
Vanilla plants are difficult to grow and maintain with a short window for pollination. The entire process from seed to extract is a lengthy process taking over a year. It is performed by skilled laborers in limited locations of the world.
The availability of supply is lower and the demand for pure extract increases when it is negatively affected by severe weather and theft.
Exporting and importing fees contribute to the overall cost as well.
Consumers are willing to pay more for pure products over synthetically produced products to get the optimal flavor profile.