Key Food Ingredient Now More Expensive Than Silver

The price of ice cream and other sweets is soaring due to the near-record price of a key ingredient – vanilla. There is, however, a synthetic alternative – called vanillin – which is proving harder to sell than a Polaroid camera.

Vanilla prices now hover at about $600 per kilogram, which is more expensive than silver, according to reports by the BBC. The price surge is due to a cyclone (called a hurricane in the Western Hemisphere) that hit Madagascar last year, a tropical island off the south-east coast of Africa and the world's top vanilla growing region.

Since 75% of the world’s vanilla is grown in Madagascar, the market is in turmoil. Vanilla is also produced in Papua New Guinea, India and Uganda.

The vanilla shortage has some corporations scrambling to keep customers satisfied. Earlier this spring, Dunkin' Donut's chief executive officer Nigel Travis told Bloomberg that dairy and vanilla prices are weighing down returns at Baskin-Robbins, one of its brands.

Many smaller retailers say they can’t afford the price spike and are taking vanilla products off the menu. Complicating the shortage is that the demand for trendy, organic ingredients has increased in recent years, so the demand for real vanilla products – not the synthetic substitute – adds to the worldwide problems of sourcing the spice.

According to a report on NPR, vanilla is 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. But those native pollinators do not exist in Madagascar, so it is done by hand. "Every flower of this orchid has to be fertilized by hand, with a little stick," Jürg Brand, who runs a small vanilla business in Madagascar called Premium Spices, told NPR.

It gets worse. After the seed pods are harvested, each has to be soaked 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.

But demand for organic ingredients in Europe and the U.S. pushed vanilla prices higher. Synthetic vanilla, of course, is much cheaper, but now shunned by consumers who are demanding the all-natural and organic varieties. 

All of which creates a huge conundrum if you’re committed to putting only natural and organic food in your body, yet realize the vanilla you love is produced in Third World countries by people making pennies a day.