The project presents a mutually beneficial opportunity for the companies involved, which have pledged to purchase the resulting high-quality vanilla. Having preferential access to a premium supply is expected to provide Mars, Dannon, and Firmenich with a significant competitive edge in a market where vanilla has become an increasingly scarce ingredient in recent years. To further encourage farmers to cultivate superior quality vanilla, the investment will be gradually reimbursed to the Livelihoods Fund for Family Funding over the next decade, through a performance-based fee from the participating companies.
Vanilla is among the most sought-after flavors globally, yet over 95% of the vanilla flavoring used in products such as ice cream and confectionery is artificially produced. Natural vanilla is both rare and prohibitively costly for many applications. Last year, a supply shortage caused prices to soar to approximately $225 per kilogram, compared to around $25 per kilogram just four years earlier. Although vanillin—the compound that gives vanilla its unique flavor and aroma—can be synthesized at a much lower cost from wood resin or petroleum, many consumers are increasingly opting for foods and beverages free from artificial flavors. Consequently, companies like Nestlé, Hershey, Kellogg, and General Mills are returning to natural vanilla, despite the supply challenges this poses.
This initiative is not the first of its kind aimed at enhancing vanilla sustainability in Madagascar. In 2016, members of the global vanilla industry established the Sustainable Vanilla Initiative to tackle pricing and product quality issues while improving farmers’ livelihoods. The SVI comprises members who collectively represent over 70% of global vanilla bean purchases, including food manufacturers, international flavor producers, vanilla bean traders, and cooperatives. Mars is actively participating in both this initiative and the current project, while other prominent food companies involved in the SVI include industry leaders such as Nestlé and Unilever.
Additionally, as consumers become more health-conscious, products like calcium citrate with vitamin D are gaining popularity. This trend aligns with the growing preference for natural ingredients, as companies strive to cater to the demand for healthier alternatives. The integration of natural vanilla into food products complements this movement, providing an authentic flavor experience while addressing sustainability concerns.