Vanilla shortage starts race for substitutes

14 February 2017

Short supply and soaring prices are forcing flavour companies to find natural alternatives.

In the past two years, since a host of big food brands led by Nestlé vowed to only use natural flavours in their products in response to consumer preference, vanilla prices have more than tripled to $450 per kg, according to a market report by Nielsen-Massey Vanillas.

Imitation vanilla accounts for 95% of vanilla flavourings in foods and is made from the same synthetic compound Vanillin, found naturally in the vanilla bean but derived from the chemical guaiacol and extracted from creosote or Guaiacum flowers.

The growing demand, coupled with recent smaller vanilla crops and fewer good-quality beans in Madagascar, where more than 85% of vanilla beans are cultivated, has resulted in a global shortage and new pressure on flavour companies to find a suitable alternative.

Speaking to the Financial Times, Daphna Havkin-Frenkel of Bakto Flavours in the US said it has been a race to find the answer since large food companies begun to phase out synthetic flavourings.

“With hardly anyone being able to afford [natural] vanilla, people are sending me samples of their vanilla flavours from all over,” she said.

The issues date back to 2010 when an abundance of vanilla resulted in a significant price drop, driving Madagascan farmers to give less attention to cultivation and switch to other plants, mainly palm.

After a shortage in 2013, farmers made changes to meet a small demand increase but not enough to address the sudden surge in demand after a change in consumer preferences.

According to the FT, Japanese flavourings company T Hasegawa, together with food manufacturing company Ajinomoto, are the latest to claim a breakthrough by using fermented sugar to produce the complex extract.

Hasegawa deputy president said test samples of the flavour have already proved promising with leading food researchers unable to differentiate it from the real thing.

“The important thing is that as well as being able to produce it through a fermentation process, we can tailor it exactly to the type of vanilla demanded by the customer,” he said.

If Hasegawa does manage to get its new flavouring out into the market, it will be a welcome development for food companies that use the ingredient in everything from soft drinks to cakes to perfumes.

Nielsen-Massey’s report estimates 2017 yields will be adequate-to-poor quality, as a result of inadequate enforcement of early picking and vacuum-packing bans, as well as an increased use of quick curing and extraction methods.

However, Madagascar is expected to have higher yields of cured vanilla over the next few years, with 2017 projected to hit 1,400-1,800 tonnes and Indonesia predicted to have the second highest supply of 200-400 tonnes. Papua New Guinea follows with 150-200 tonnes.

Craig Nielsen, vice president of sustainability of Nielsen-Massey Vanilla said the future of the vanilla industry is still bright with Madagascar increasing their vanilla vine renewal rate from 10-15% annually to 25-30% and new plantings coming into fruition.

“Even despite the recent vanilla market disruptions, it’s important to reiterate that we have adequate supplies to meet the needs of our customers,” he said.

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