Eduardo Villagómez, VP of vanilla products at Virginia Dare.Virginia Dare
How would you characterize the stability of the vanilla supply chain today, and what are the biggest vulnerabilities that flavor companies should be planning around over the next five years?
Villagómez: We’re currently experiencing an oversupplied vanilla market with Madagascar having year-to-year bumper crops and with a forecast of a third good crop coming up this year which have driven prices down.
Based on this, we can expect stable pricing and a steady supply for at least the two-three years to come. The biggest risks for flavor companies could come from major weather events damaging the crop and in-county inventories and from policy changes at the local level affecting prices more than availability.
"Indonesian farmers follow different agricultural and curing practices than the ones we typically see in Madagascar so I wouldn’t consider this origin to be a replacement for the characteristic flavor profile we see coming out of the Bourbon region," says Eduardo Villagómez, VP of vanilla products at Virginia Dare. "However, it provides a good alternative when labeling is the priority and not flavor."Pande at Adobe Stock
Climate change is an obvious long-term concern for a crop as geographically concentrated and labor-intensive as vanilla. What climate-related changes are you already seeing in the major growing regions, and which interventions—agronomic practices, genetics, crop diversification, infrastructure—are most promising for making vanilla production more resilient?
Villagómez: As you correctly mention, vanilla is grown in a very concentrated region, mostly in the North East of Madagascar known as the SAVA. In the past few years, we have already seen changes in weather patterns that have required producers to draw on their creativity to minimize the impact of these on the vanilla supply chain.
The most noticeable change has been an increase of rain during the months of September to November making average temperatures to be lower. This change mostly affects the curing and drying steps as vanilla beans require to reach high temperatures and dry weather to go through these processes in an efficient manner.
In order to mitigate the impact of the changes in weather conditions, vanilla curers have resorted to transporting their vanilla beans to warmer and dryer areas of the country for the initial phases of curing to then move those beans back to the SAVA region to finalize the curing and go through the sorting and selection processes.
Up to today, we haven’t seen major climate changes that could affect vanilla while it is still on the vine so there hasn’t been a need for major agronomic practices shifts.
Shifting rain patterns and accompanying lower temperatures have impacted the vanilla curing and drying steps in Madagascar. Local producers are changing their processes in response.Pav-Pro Photography at Adobe Stock
Uganda, Indonesia and other producing regions are attracting greater attention as companies look to diversify beyond Madagascar. Are these emerging origins capable of becoming meaningful components of the global vanilla supply, or are they more realistically complementary sources that can provide strategic insurance when Madagascar has a difficult crop?
Villagómez: I wouldn’t really call them emerging origins as they have been producing vanilla for many years and they have proven that when needed, they can increase their output significantly.
Indonesian farmers follow different agricultural and curing practices than the ones we typically see in Madagascar, so I wouldn’t consider this origin to be a replacement for the characteristic flavor profile we see coming out of the Bourbon region; however, it provides a good alternative when labeling is the priority and not flavor.
Uganda on the other hand does tend to follow the more traditional vanilla processing practices; in the most recent years, exporters have organized and started working together to position their crop as an alternative to Madagascar, and the quality of the vanilla beans has been very high comparable in vanillin content and flavor profile to extraction grade Madagascan beans. If they manage to get through the current low-price cycle, they can definitely become a meaningful global supplier.
The main challenge that both Indonesia and Uganda face is competing with the lower cost scheme that Madagascar benefits from, especially when prices are where the current market stands.
How much room is there for new vanilla varieties or improved planting material to change the economics of the category? Could breeding or selection ultimately deliver varieties that are more climate-resilient, higher-yielding or less labor-intensive without sacrificing the sensory complexity that formulators value in natural vanilla?
Villagómez: Yes, cross-breeding and other agronomical research around vanilla has already delivered varieties that are more climate resilient. There has even been talk about “self-pollinating” varieties which would be game-changing.
Additionally, there are already other varieties such as Vanilla pompona which are commercially available. The flavor profile of these varieties is not necessarily less complex than the typical vanilla we are so familiar with. However, the standard of identity for vanilla extract in the United States only allows the use of Vanilla planifolia and Vanilla tahitensis, limiting enormously the scope for these potential new varieties hence discouraging additional exploration.
Cost is another important element to consider, research is expensive and if the varieties resulting of agronomical investigation are more expensive, it would be an uphill battle to have them widely implemented even if they provide a certain benefit such as a higher yield.
Varieties such as Vanilla pompona are commercially available, but are inconsistent with the U.S. vanilla standard of identity.Gino Tuesta at Adobe Stock
As supply becomes more geographically diverse, how should flavorists, perfumers and procurement teams think about managing—and potentially exploiting—those differences in terroir and chemical profile rather than simply trying to make every source taste the same?
Villagómez: Vanilla extract is not only used as a stand-alone ingredient, but also as an ingredient in other flavors, as well as a background note in products such as confectionery and bakery. Identifying the difference in flavor profile that each of the growing regions and species have can become a tool for flavorists to tweak their creations and gear them toward a specific profile.
Age is another factor that contributes to flavor profile and enhances different descriptors such as rummy and alcoholic notes, so being aware and cataloguing these differences allows for the use of vanilla extract as a versatile instrument. By sourcing from different regions, procurement teams can enable their creative counterparts to have a broader palette to innovate with.
"The way vanilla is grown and cured in Madagascar has remained mostly unchanged since the early 1840s," says Eduardo Villagómez, VP of vanilla products at Virginia Dare. "The methods and practices followed in that geographical region result in the beloved flavor profile appreciated all around the world."Spice Footage at Adobe Stock
Looking toward 2030, what do you think the vanilla market will look like that is materially different from today? Will the winning strategy be greater diversification of growing regions, more sophisticated agricultural science, better supply-chain intelligence, new varieties—or some combination of natural vanilla with other approaches to achieve the sensory profile consumers expect?
Villagómez: The way vanilla is grown and cured in Madagascar has remained mostly unchanged since the early 1840s. The methods and practices followed in that geographical region result in the beloved flavor profile appreciated all around the world.
Other regions have implemented changes such as harvesting early or quick curing to accelerate the crop cycle, but these don’t come without compromising taste and quality, so it is hard to imagine that in three-and-a-half years we will see a market that is much different from what we see today when we haven’t seen significant changes in the past 150-plus years.
But the one aspect I see the industry paying more attention to is the diversification of sourcing risk by encouraging the use of other regions, mainly Uganda which is less prone to inclement weather.
