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Vanilla: Challenges and Opportunities

By: Carmelo Pennestri, with Catherine Hogan, IFF
Posted: April 13, 2009

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Given the number of variables that can quickly affect the price of vanilla, the wise F&F house will hold a significant supply as a hedge against price variation and ensure supply sources from multiple regions.

With regard to organic certification, most vanilla by its nature is organic. However, the certification is costly so it is rare for exporters to go to the trouble. That said, there is a niche market for organics, particularly in dairy applications, and we do not anticipate this changing.

On the fair trade front, there are food manufacturers for whom this is an important part of their brand positioning. More and more, consumers are concerned about the conditions under which the food on their plates was grown and processed. But right now, as the world experiences the biggest economic contraction in 60 years, consumers are more concerned about being able to afford to feed their families, fair trade or not.

Today more than ever, cost is a key driver in product formulations. Consumers are getting acceptable vanilla profiles in many different, more cost-effective forms, from artificial and natural to extracts and even organic, for classic vanilla flavor categories of ice cream, yogurt, confectionery, baked goods and beyond.