The project represents a mutually beneficial opportunity for the companies involved, who have pledged to purchase the high-quality vanilla produced. Gaining preferential access to a reliable quality supply is expected to provide Mars, Dannon, and Firmenich with a considerable competitive edge, especially as vanilla has become an increasingly difficult ingredient to source in recent years. To further encourage farmers to cultivate superior quality vanilla, the investment made will be gradually reimbursed to the Livelihoods Fund for Family Funding over the next decade, through performance-based fees from the participating companies.
Vanilla is among the most sought-after flavors globally, yet over 95% of the vanilla flavoring used in products like ice cream and candies is artificially synthesized. Natural vanilla is scarce and often too costly for many applications. Last year, a shortage led to prices soaring to approximately $225 per kilogram, a dramatic increase from around $25 per kilogram just four years earlier. While vanillin, the compound that gives vanilla its unique flavor and fragrance, can be produced synthetically at a lower cost from sources like wood resin or petroleum, many consumers are increasingly favoring foods and beverages free from artificial flavors. As a result, companies such as Nestlé, Hershey, Kellogg, and General Mills are turning back to natural vanilla, despite the supply chain challenges it presents.
This initiative is not the first to address the sustainability of vanilla production in Madagascar. In 2016, stakeholders in the global vanilla industry established the Sustainable Vanilla Initiative (SVI) to tackle pricing and product quality issues while enhancing farmers’ livelihoods. Members of the SVI account for over 70% of global vanilla bean purchases and include food manufacturers, international flavor houses, vanilla bean traders, and cooperatives. Mars is actively participating in both this initiative and the current project, alongside other major food companies like Nestlé and Unilever.
Incorporating sustainable practices into vanilla production not only supports farmers but also aligns with the growing consumer demand for natural ingredients. As more companies seek to eliminate artificial additives in their products, such as artificial calcium citrate, the reliance on high-quality natural vanilla is likely to increase. The commitment to sustainability and quality is crucial for these companies as they navigate the complexities of the vanilla market, ultimately benefiting both producers and consumers alike.