Vanilla currently stands as the second most expensive spice, after saffron. The reasons for this high price point are primarily due a labor-intensive process for growing the pod and harvesting, which takes place approximately two or three years after planting. Given the long production process for one of the world’s most common flavorings, artificial vanilla— produced from inexpensive compounds like lignin or guaiacol—is very common, because it can sell at a much cheaper rate than natural vanilla.1
Demand for natural vanilla has increased over recent years due to two factors: 1. Premiumization 2. Globalization
The first factor, premiumization, has caused a rise in the valuation of products such as ice creams that claim to be “made with real Madagascan vanilla beans.” The second factor, globalization, manifests as a rise in the popularity of “Western” foods such as ice cream in countries like China. In China alone, Häagen-Dazs brought in revenue of about $100 million last year.2 The issue with this rise in demand is that the production of natural vanilla has only limited means of increase due to stringent requirements on growing conditions such as climate and soil type. Furthermore, changes in the climate where vanilla traditionally grows cause drastic variations in year-over-year production.3
