Our Love Of 'All Natural' Is Causing A Vanilla Shortage June 16, 2017 7:31 AM ET Dan Charles

Workers spread "red vanilla" (vanilla that has been treated by special cooking) in the sun to be dried near Sambava, Madagascar, in May 2016. Madagascar, producer of 80 percent of the world's vanilla, has seen huge jumps in the price. It's one of the most labor- intensive foods on Earth. Rijasolo/AFP/Getty Images Gerry Newman buys vanilla by the gallon. He's co-owner of Albemarle Baking Co., in Charlottesville, Va., and vanilla goes into everything from his cookies to pastry cream. A few years ago, each 1-gallon bottle of organic, fair-trade vanilla set him back $64. Today, it's $245, more than Newman can comfortably stomach. It's a global phenomenon, hitting pastry chefs and ice cream makers alike. Some have changed their recipes to use less vanilla. Newman has switched suppliers to find a cheaper product. "It's not certified organic. It's not fair trade," he says. "There's a guilt I have over that, because we're talking about something that's all hand labor, and if these people aren't being treated fairly, it's really sad." To understand the current vanilla crisis, this is the first thing to understand: It's one of the most labor-intensive foods on Earth. Vanilla beans are the seeds of an orchid. It grows wild in Mexico, where its flowers are pollinated by birds and insects. Most of the world's vanilla now is grown in Madagascar, though, where those native pollinators don't exist. So it has to be done by hand. "Every flower of this orchid has to be fertilized by hand, with a little stick," says Jürg Brand, who runs a small vanilla business in Madagascar called Premium Spices. And that's just the start of it. After you harvest the seed pods, you soak each one in hot water, "and then you wrap it in woolen blankets for about 48 hours, and then you put it in a wooden box to sweat," Brand says. Later, the pods are laid out to dry in the sun, but for only one hour each day. The whole process takes months. It's so time-consuming and labor-intensive that during the decade that preceded the recent run-up of prices, some farmers simply gave up. Prices for vanilla were so low, it just wasn't worth the effort. "A lot of farmers abandoned their plantations during this time," Brand says. This brings us to the second factor in today's vanilla crisis. During that period of low prices, a lot of food companies were content to use a synthetic version of vanilla. This factory-made version is composed of a single chemical compound, vanillin, which is the main flavor compound in natural vanilla. Synthetic vanillin is much cheaper than natural vanilla. On the list of ingredients of, say, packaged cookies, it may show up as vanillin or simply "artificial flavors." The vanilla market began to flip when food companies noticed that consumers were avoiding foods with artificial flavors.

"Consumers are reading the labels much more, and they're demanding all natural, and even organic," says Craig Nielsen, co-owner of the company Nielsen-Massey, which makes vanilla the traditional way, from beans. About three years ago, several huge companies, including Nestle and Hershey's, announced that they were shifting to natural ingredients. That means they now want vanilla from orchid seeds, not factories. The problem is, there aren't enough vanilla-producing orchids. "We don't have the supply to meet the demand right now," says Nielsen. Nielsen-Massey isn't taking orders from any new customers at the moment, because the supply of vanilla beans is so limited. Food companies — and small-town bakers like Gerry Newman — all are trying to secure a piece of that limited supply, bidding up the price. A bag of vanilla beans in Madagascar now costs more than 10 times what it did five years ago. Bad news for bakers, though, is great news for vanilla-growing farmers in the coastal regions of Madagascar. "There's really, really, a lot of cash around in these coastal towns now," says Jürg Brand. So much cash is going to pay farmers, in fact, that an odd thing happened during the last vanilla harvest season. "The national central bank ran out of cash," says Brand — at least the large bills that vanilla traders use to pay farmers. Farmers don't trust banks, so they were hoarding that cash at home. "All the money was somewhere on this coastal strip, under mattresses or locked in houses or I don't know where," he says. Brand, who's been living in Madagascar for the past 25 years, expects the craze to end eventually. Farmers in Madagascar now are rebuilding vanilla plantations as quickly as they can, but it takes four or five years before those orchids start producing seeds. This past March 2017, there was a big setback: A cyclone hit Madagascar, destroying perhaps a third of the crop, pushing prices up even more. Vanilla pods are so precious, theft has become a major problem. Farmers are so worried about their crops being stolen directly from their fields that they are harvesting the beans much too early. For vanilla lovers, it's doubly bad news. Not only are vanilla beans scarce and expensive, the quality is generally quite poor, too. https://www.npr.org/sections/thesalt/2017/06/16/527576487/our-love-of-all-natural-is-causing-a-vanilla-shortage

Your Passion for Fancy Vanilla Ice Cream Is Creating World-Wide Havoc With the price skyrocketing, farmers in Madagascar, the industry’s epicenter, are sleeping in their fields, hiring guards; ‘there are many vanilla thieves here’

Gérard Mandondona on his vanilla plantation in Ambodiampana, Madagascar. PHOTO:ALEXANDRA WEXLER/THE WALL STREET JOURNAL By Alexandra Wexler Dec. 14, 2017 10:18 a.m. ET

AMBODIAMPANA, Madagascar—Just before the sun dips below the tree-covered hills around the Malagasy jungle, Gérard Mandondona treks up the near-vertical slope of his 5-acre wild garden. He’s there to inspect his most valuable crop of some 2,500 vanilla orchids. Earlier this year, he hired a guard to keep watch over the vine-like plants, which intertwine among coffee, banana and clove trees. Some nights, Mr. Mandondona joins the guard at his post under a makeshift tent of blue tarp, with a fire going nearby to frighten off potential thieves.

The process of making vanilla has become anything but plain. Driven in part by Americans’ increasing taste for natural products, the price of vanilla has grown sixfold over the past three years. That’s wreaking havoc on Madagascar, the Indian Ocean island about 9,000 miles away that’s at the center of the approximately $1.75 billion market for the world’s most popular flavor. Vanilla bandits are plundering pods, which at about $600 a kilogram are now more valuable than their weight in silver and come second only to saffron in the spice price rankings. Farmers, who must hand-pollinate each orchid on the single day it flowers, are responding by harvesting early, reducing the quantity and quality of the vanilla.

Vanilla beans are sorted at Sahanala, a vanilla exporter, in Vohemar, Madagascar. PHOTO:ALEXANDRA WEXLER/THE WALL STREET JOURNAL Some, like 50-year-old Mr. Mandondona, who had thieves steal vanilla from his vines in April, have hired guards or spend their nights sleeping in their fields. On at least four occasions this year, farmers have killed thieves caught stealing vanilla from farms or houses, according to a local government official in Madagascar’s vanilla-growing region of Sava. “There are many vanilla thieves here. Before, they’d steal one plastic sack, now they steal on a bike” stacked high with sacks, said Mr. Mandondona, who has spent the past three decades farming vanilla. “It is a big problem. If there’s no security, we can’t make vanilla work.” Some communities, including Ambodiampana, whose neat wooden-slat houses materialize out of the thick, green jungle on either side of a wide tar road, have created village defense forces, which are staffed by the strongest men. They are trained by the local gendarmes to guard access to the area and bring thieves in to the authorities. The mayhem in the Malagasy jungle, where about 80% of the world’s vanilla is grown, is spurred by some of the world’s largest packaged-foods companies, which are increasingly using natural—rather than artificial—vanilla flavor in chocolates, ice creams and baked goods. Natural vanilla flavor is now used in products including Nestlé SA’s Crunch bars, McDonald’s Corp.’s vanilla soft serve and HersheyCo.’s Hershey’s Kisses. In 2017, the market for U.S. vanilla imports jumped to $402.4 million through October, from $232.8 million during the same period in 2016, after more than doubling in 2016 from the previous year, according to the U.S. International Trade Commission and the U.S. Department of Commerce. This year, the increase in price for natural vanilla was compounded by a March 2017 cyclone that hit the northeastern vanilla- producing region of Madagascar, which fueled buyers’ worries about shortages.

Inside Hershey Co.’s Chocolate World visitor center in Hershey, Penn. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS Food manufacturers “have mostly forgotten that the production of vanilla in Madagascar is a craft work that cannot withstand a high world demand,” says Jean Christophe Peyre, director general of Flor Ibis Sarl, a vanilla producer, processor and exporter based in Vohemar, Madagascar. Vanilla orchids first arrived on Madagascar, more than 250 miles off the coast of southeastern Africa, in the early 1800s, brought by the French from the plants’ native Mexico. But Madagascar lacked the native bee that facilitates pollination in the Americas. It took several decades until a slave boy on the neighboring island of Réunion figured out how to hand-pollinate the vanilla plants using a technique that farmers still employ to this day. Vanilla is now the island’s top export, though Madagascar remains one of the world’s poorest nations, ranking 158 out of 188 countries on the United Nations Human Development Index.

Packaged-foods companies are increasingly using natural—rather than artificial—vanilla flavor. PHOTO: ISTOCK Vanilla plants are the only fruit-bearing orchid and it takes them about three years to start producing beans—one reason why supply is lagging demand. The orchids must be watched closely, not only because of theft but also because each flower blooms for only one day. If it isn’t pollinated during that narrow window, the flower wilts and dies. About nine months after pollination, farmer s pick the green pods and dry them in a complicated process that includes blanching the beans, sweating them and drying them in the sun, generally over another three to six months. “Think about trying to keep your house orchid alive at home,” says Benjamin Neimark, a lecturer at Lancaster University in the U.K. “Now try keeping that alive in the middle of a fairly difficult rain forest.” Vanilla farmers receive a fraction of the jump in prices for their produce, with much of the profits staying with middlemen, who buy the pods and then sell to exporters. Farmers in Ambodiampana said they get about $200 a kilogram for their beans, about one-third the market price. In the hope of shielding them from thieves, farmers have been picking their beans before they’re ripe, which drastically reduces the amount and quality of the vanilla that they yield. “We are afraid to leave our vanilla in the field,” said Gaspard Kola, a farmer from Ambodiampana who has been growing vanilla since 1958, when he was 17 years old. Earlier this year, as the harvest was ramping up, Mr. Kola fell ill and had to go into the regional capital, Sambava, for treatment. While he was there, thieves stole dried and freshly picked green vanilla out of his house. He plans to hire guards to watch his crop next year. It normally takes 5 to 6 pounds of green vanilla beans to make 1 pound of cured beans, says Craig Nielsen, vice president of sustainability at Nielsen-Massey Vanillas Inc., a family-owned manufacturer in Waukegan, Ill. If they are picked early, it can take 8 to 10 pounds.

Vanilla beans are dried on tables in the sun in Vohemar. PHOTO: ALEXANDRA WEXLER/THE WALL STREET JOURNAL The surge in prices isn’t unprecedented. In 2004, a cyclone made a direct hit on the vanilla-growing regions of Madagascar, causing extensive damage to the crop and driving the price from about $25 a kilogram to more than $500 a kilogram. Once the crisis passed, prices fell back to below $50 a kilogram. For now, smaller retailers like artisanal bakeries and gourmet ice-cream makers are feeling the pinch more acutely than their mass- market peers—they require higher-quality vanilla and the beans make up a much higher percentage of their costs. Katie Burford, the owner of ice-cream shop Cream Bean Berry in Durango, Colo., estimates the price she pays for vanilla has quintupled from a few years ago. To cut costs, Ms. Burford scaled down on the number of vanilla beans she puts in her ice cream. She hasn’t raised prices, because she worries they’re already at the high end of the market: A regular-size cup costs $3.78, excluding tax. “We’re really hostage to the prices, because it’s so intrinsic to what I do,” she says. “I just don’t feel like I could not offer vanilla ice cream.” https://www.wsj.com/articles/your-passion-for-fancy-vanilla-ice-cream-is-creating-world-wide-havoc-1513264731

ADDITIONAL SUPPORTING ARTICLES https://www.delish.com/food-news/news/a53817/vanilla-shortage/ https://www.cbsnews.com/news/vanilla-bean-shortage-madagascar-drives-up-us-prices/ https://www.theglobeandmail.com/life/food-and-wine/market-forces-buffet-plain-vanilla-as-global-dearth-drives-

skyrocketing-prices/article38268619/