Drop of Vanilla Prices Not Expected to Last
In 2018, the world saw massive inflation of vanilla bean prices, as a consequence of volatile weather conditions in 2017, criminal atrocities on cultivators, and a rise in global demand. Since then, the vanilla market seems to have been in constant flux, due to a cocktail of other contrasting factors including COVID-19 and the associated increase in home cooking paired with the fall and rise of restaurants, global supply chain issues, increased desire for natural and organic products, and an increase in supply as plants recover from the 2017 cyclone and plants on newer farms mature.
More recently, however, despite the fact that most ingredients are amidst drastic price increases, the cost of vanilla beans has seen a drop. While vanilla still reigns as one of the most expensive spices in the world, with its place among saffron and fennel pollen, if you are a baker, chef, or simply a vanilla enthusiast, this is probably music to your ears. Take heed to what we are about to reveal, though. We have been in the vanilla business for a very long time and can almost guarantee that these prices will not be maintained at such a comfortable position for your pocketbook in the long run.
Why vanilla bean prices may soon be on the rise again:
Just as there was a cocktail of factors that led to the increased price of vanilla beans in the past, there are some determinants that will continue to fluctuate and lead to the likely increase of vanilla bean prices in the future. Let’s take a look.
Weather alters the price of vanilla
While meteorologists might disagree, weather is absolutely unpredictable. Sure, you might be able to expect seasonal changes and pressure systems provide insight, giving meteorologists the information they need to begin alerting us of weather events in the near future. From year to year, though, we aren’t able to gauge when and where detrimental weather systems may take place. For those cultivating vanilla beans, knowing what the weather is going to do doesn’t necessarily help their situation any many instances. Considering that and the fact that vanilla bean crops are very particular about the growing conditions, even a seemingly minor disruption could decrease supply and alter vanilla bean prices for years to come.
Increased popularity of pure and organic products will increase demand
With more and more people realizing the impact of buying habits can have on their health and the world as a whole, there has been massive growth in pure, organic, and ethically sourced products. When it comes to the flavor and aroma of vanilla, there are substitutes that can be purchased relatively inexpensively, but these are typically made from vanillin, an artificial vanilla flavoring agent synthesized in a lab. But with the increased interest in pure and organic products, many folks who used artificial vanilla extracts, powders, and pastes in the past are switching to the real thing and the trend doesn’t look like it is set to slow down. In fact, the global vanilla market is expected to increase by 4.5% by 2028. This increased demand will almost certainly drive up the prices of whole vanilla beans and pure extracts, pastes, and powders.
Natural health and wellness products are on the rise
Just as pure products are seeing increased popularity for culinary purposes, so are health and wellness products. The vanilla aroma has long been a popular addition to fragrant perfumes, lotions, and the like, but most of those simply replicated the chemical compounds responsible for the scent. A more recent rise of natural remedies has secured the addition of pure vanilla seeds and volatile oil extractions into health and wellness products, which is also increasing overall demand and—you guessed it—driving up prices.