Dive Brief:
- Poor weather has contributed to a bad crop year for vanilla and pectin, causing prices for both to rise, and spurring the search for alternatives, according to Food Business News.
- The vanilla crop from Madagascar, the largest supplier in the world, was originally expected to yield somewhere between 2,000 to 2,400 tons of vanilla this year based on projections from Aust & Hachmann, but analysts now believe it will only be around 1,300 to 1,500 tons. Prices over $80 for a kilogram of green vanilla beans have been reported — more than double the less than $30 kilogram prices three years ago.
- Pectin, a gelling and texturizing agent used in bakery fillings, has increased in price after bad crop years in Argentina. A recent IMR Quarterly Review of Food Hydrocolloids priced it as $9 per pound, more than twice its price in 2006. Meanwhile, low methoxyl pectin was priced at $10.60 per pound.
Dive Insight:
Manufacturers and baking businesses that rely on vanilla and pectin experienced a rude awakening around the end of 2016 when prices for both vital ingredients shot up due to a bad crop year for each. Some of this price increase was expected, but analysts reveal the results were worse than most predicted.
It’s reported that current vanilla prices could even rival the crisis of 2001-2004 when prices surpassed $500 per kilogram.
Savvy manufacturers have already started to replace natural vanilla with less costly synthetic alternatives, such as products blended with lower-quality beans or natural products that mimic the vanilla flavor. Numerous flavor companies, including Borregaard, Symrise, Solvay and International Flavors & Fragrances, are doing their part to help food manufacturers find the best vanilla flavor for their product’s needs.