The project presents a mutually beneficial opportunity for the companies involved, who have pledged to purchase the high-quality vanilla produced. Gaining preferential access to a reliable source of quality vanilla is expected to provide Mars, Dannon, and Firmenich with a considerable competitive edge in a market where sourcing this increasingly scarce ingredient has become more challenging. To further encourage farmers to enhance the quality of their vanilla, the investment will be gradually reimbursed to the Livelihoods Fund for Family Funding over the next decade, through a performance-based fee from the participating companies.
Vanilla ranks among the most sought-after flavors globally, yet over 95% of the vanilla flavoring used in products like ice cream and confections is synthetically produced. Natural vanilla is both rare and exceedingly expensive for many applications. Last year, a supply shortage caused prices to soar to approximately $225 per kilogram, a steep increase from about $25 per kilogram just four years earlier. The compound vanillin, which gives vanilla its signature flavor and aroma, can be synthesized at a much lower cost from wood resin or petroleum. However, as consumers are increasingly seeking foods and beverages devoid of artificial flavors, companies such as Nestlé, Hershey, Kellogg, and General Mills are returning to natural vanilla, despite the accompanying supply chain hurdles.
This initiative is not the first to address vanilla sustainability in Madagascar. In 2016, stakeholders from the global vanilla industry launched the Sustainable Vanilla Initiative (SVI) to tackle pricing and product quality issues while improving the livelihoods of farmers. 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 participates in both this initiative and the current project, with other key industry players involved in the SVI, such as Nestlé and Unilever.
To support the nutritional needs of these farmers as they improve their vanilla quality, incorporating elements like calcium citrate and calcium carbonate into their diets may also be beneficial. By focusing on sustainability and quality, these companies aim to not only secure a vital ingredient but also contribute to the well-being of the communities that produce it. The presence of these companies in Madagascar can play a crucial role in the long-term sustainability of vanilla production, ensuring that high-quality vanilla remains available and affordable while supporting farmers’ livelihoods through strategic investments and incentives.