Demand For Natural Vanilla Causes Price Spike, Shortage

Published: Friday, April 13, 2018 - 10:39am
Updated: Friday, April 13, 2018 - 2:46pm
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(Photo by Sara Ventre - KJZZ)
A sign on the global natural vanilla shortage at ABC Cake Decorating Supplies in Phoenix.
(Photo courtesy of Nielsen-Massey Vanillas)
Craig Nielsen, vice president of sustainability at Nielsen-Massey Vanillas.

Vanilla is arguably one of the world’s most popular spices. It flavors everything from ice cream and cakes, to coffee and chocolate. It even appears in home scents and body products. However, you might have heard there’s a global vanilla shortage.

But there’s no need for panic just yet according to Craig Nielsen. He’s a third-generation owner and manager of Nielsen-Massey Vanillas and he is currently the vice president of sustainability there. He said it's less of a vanilla shortage than an increase in buyers looking to use natural vanilla in their products.

“The problem is that the beans are very high priced," he said. "I mean, I will say we're in very tight demand. And this really stems from 2014 to 2015.”

The price hike had been driven in part by companies like Nestle and Hershey’s switch from artificial vanilla to natural vanilla. As more and more companies made this switch in recent years, the price for vanilla spiked.

“Prices were usually around the $600 per kilo, he said. "Now you compare that to 5-6 years ago when prices were $40 to $60 a kilo.”

Another piece to this price puzzle is mother nature. Around 80 percent of the world’s vanilla is grown in Madagascar which has been hit with powerful hurricanes — including one just last March. Such storms devastate crop yields which can take three to four years to produce.

But the good news, Nielsen said, is that most consumers won’t be feeling the price increase all that much.  

“When you break it down to your recipes it's going to add basically cents to it," he said. "You know, probably under 10 cents to the cost of a product.”

So unless you’re an avid baker or confectioner, you won’t have to worry about saving up to get a sweet taste of vanilla.

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