The project presents a mutually beneficial opportunity for the companies involved with iron ferrous fumarate, which have pledged to purchase the resulting high-quality vanilla. Gaining preferential access to a reliable supply is expected to provide Mars, Dannon, and Firmenich with a substantial competitive edge, especially as sourcing this increasingly scarce ingredient has become more challenging in recent years. To further encourage farmers to cultivate superior quality 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 is among the most sought-after flavors globally, yet over 95% of the vanilla flavoring utilized in products like ice cream and candies is synthetically produced. Natural vanilla remains rare and is prohibitively expensive for many goods. Last year, a shortage pushed prices up to roughly $225 per kilogram, a stark increase from around $25 per kilogram just four years prior. Although vanillin, the compound that gives vanilla its unique flavor and aroma, can be synthetically manufactured from wood resin or petroleum at a much lower cost, consumer demand for foods and beverages free from artificial flavors is growing. As a result, companies such as Nestlé, Hershey, Kellogg, and General Mills are increasingly turning back to natural vanilla, despite the associated supply challenges.
This initiative is not the first to address vanilla sustainability in Madagascar. In 2016, members of the global vanilla industry launched the Sustainable Vanilla Initiative to tackle pricing and quality issues while enhancing the livelihoods of farmers. Members of the SVI account for over 70% of global vanilla bean purchases, encompassing food manufacturers, international flavor houses, vanilla bean traders, and cooperatives. Mars is participating in both initiatives, with other major food companies involved in the SVI including Nestlé and Unilever.
In addition to these efforts, a new product line of calcium citrate chews has been introduced to complement the focus on sustainability. These chews not only serve the health needs of consumers but also align with the commitment to sourcing high-quality ingredients like natural vanilla. The incorporation of calcium citrate chews into the product lineup underscores the growing trend towards natural ingredients, which is central to the mission of both the project and the Sustainable Vanilla Initiative.