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What is a Vanilla Bean Co-op

Slofoodgroup Team October 28, 2021

The Truth Behind Vanilla Bean Co-Ops

If you are a baker or just love using vanilla beans in any way, then there is a good chance you’ve stumbled across Facebook groups calling themselves Vanilla Bean Co-ops, but what exactly is a vanilla bean co-op and are they really worth all the hype?

As a vanilla bean-obsessed, ethically obtained ingredient purveyor, we always try to source the highest-quality vanilla beans and offer them at reasonable prices to our customers. As such, these co-ops have really piqued our interest—if there is a way for us to offer better deals to our customers, we had to know. So, we did a little research. Read on to find out what we discovered.

What defines a Vanilla Bean Co-Op?

The concept of a vanilla bean co-op is a rather new trend; so new in fact, that there is no conclusive description as to what actually defines one. In general, vanilla bean co-ops are described as collaborative networks of individuals looking to save money on their vanilla bean purchases by joining together and placing a single order of a specific type of vanilla bean. These orders are typically managed by a vanilla bean retailer, who then divides and distributes the beans amongst those who placed orders.

Vanilla bean co-ops are usually operated on social media groups, where the admin or “moderator” notifies members of upcoming orders to be placed with a supplier. They provide pricing for the specified beans to be ordered and provide a form for members to pre-order their requested quantities of vanilla beans at bulk pricing. They pre-pay for their beans and the co-op then pools the money for the group buy. Members are given estimated delivery times and then sit back and wait for their beans to come in—sometimes many months or more, which is dependent on harvesting and curing times (these are not intended for those with unwavering timelines for their intended use). Most of these co-ops suggest they are able to pass savings on to the end user because of unbranded, simple packaging utilized after dividing the vanilla beans.

While most of these co-ops do pool money for a group purchase, other so-called co-ops simply drop pricing on vanilla beans once a shipment of beans has come in from their supplier. They often announce the date they will be available and specify a small window of time when group members are able to place an order for a specific type of bean at the reported discount. In these cases, customers are often given an absolute date of delivery, but quantities may be limited and orders are on first-come-first-served basis.

Are Vanilla Bean Co-Ops true co-ops?

To determine whether these newfound vanilla bean collaborative purchasing groups are actually co-ops, we first have to define what a co-op is. Co-op is simply shortened for cooperative, it is when a group of individuals come together, pooling resources, to achieve an optimal result for everyone involved—usually in the form of a discount, product determination, shared profit, or all of the above.

More specifically, The International Cooperative alliance defines a cooperative as “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise”. These cooperatives are recognized at the federal and state level as corporations, as such they are subject to “pass-off’ tax designation, in which members incur the taxes when dividends are received. As owners, members are also given a certain amount of control over the organization in the way of “votes” just as shareholders of other corporations would. Put simply, true co-ops are the sum of their members, not owned by the individual or organization.

So how does that compare to the vanilla bean co-ops one might find online?

While members may be uniting voluntarily and fulfilling a need in the way of obtaining vanilla beans at discount pricing, they are given no control—neither over their purchase (aside from the amount ordered) nor in the way the group or business operates. That’s because these “co-ops” are not member-owned at all (and their members are certainly not receiving dividends from profits).

All this being the case, we have come to the conclusion that most of these bulk purchasing groups are not actually co-ops at all—not legally or otherwise. Even if unintentionally, these “co-ops” have been deceptively named, with the the vanilla retailer profiting from mass purchasing.

If they aren’t true Co-ops, then what are they?

Just because these groups are not actually considered true cooperatives doesn’t mean they are all bad. Essentially, they are assemblages of like-minded individuals who are able to share in ideas, methods, tips, and recipes. We love that; it’s essentially an online vanilla bean lovers’ club.

However, to call them a co-op suggests that the members are benefiting beyond sale pricing, which really isn’t the case. They are operated by retailers as a branch of their social media marketing and broader marketing mix. The retailer is absolutely profiting from these mass purchases and those profits certainly aren’t being passed on to the end-user in the form of dividends.

Essentially, these small windows available for ordering are the same as flash sales or limited-time promotions—much like Black Friday and Cyber Monday sales. It’s a crafty sales strategy that ensures the end-user is able to get the desired product at a discount, while the company is able to capitalize on herd behavior and the dreaded fear of missing out. The retailer ends up having a smaller profit margin on each item, but the scale is much larger because there are more people purchasing, which tends to be more profitable for the retailer in the long run.

That is undeniably an effective sales strategy and as a retailer of vanilla beans, we understand the importance of marketing a product. But the misnomenclature does make the operators behind these social media groups appear to be deceptive and the idea of manipulation of community members makes us feel a little squeamish.

What are the benefits of joining a vanilla bean co-op?

As mentioned earlier in this post, the main benefit of joining a vanilla bean online community is just that, becoming part of a community with like-minded individuals who are all obsessed with vanilla! Members post recipes, share tips and tricks for making extract in bulk or otherwise, discuss uses for extract they’ve made or ideas for spent pods.

But what about the discount pricing, isn’t that a benefit too?

Yes and no. You see, the discount given to group members when they purchase through these groups is really no different than discounts and sales offered sporadically throughout the year through other vendors. The difference is in they way these discounts are positioned but not in the savings obtained. In fact, even without sale pricing, even lower prices can be obtained through purchasing large quantities from honest vendors.

Looking to compare prices on vanilla beans? Take a look a both our gourmet grade A vanilla beans or grade B extract vanilla beans sustainably sourced small farms and direct shareholders around the world.

So before you join one of these online communities, consider why you are joining in the first place. If it’s the networking and shared interests that are drawing you in, by all means, join! But, if you simply want a discount, make sure you shop around first because you might find even better deals on higher-quality beans elsewhere.

Meanwhile, you are welcome to join our community filled with like-minded, vanilla-obsessed individuals. We’ll share our own tips, tricks, and recipes and we would love to hear (read) yours. We will never participate in deceptive marketing but will absolutely share discounts when they become available.

Join our DIY Extract and Baking Community.

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