The project represents a mutually beneficial arrangement for the companies involved, who have pledged to purchase the resulting high-quality vanilla. Gaining preferential access to a dependable supply is expected to provide Mars, Dannon, and Firmenich with a notable competitive edge, especially as sourcing this increasingly challenging ingredient has become more difficult in recent years. To further motivate farmers to produce superior 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 one of the most beloved flavors worldwide, yet over 95% of the vanilla flavoring used in products like ice cream and confectionery is synthetically produced. Natural vanilla is rare and often too expensive for many applications. Last year, a supply shortage caused prices to soar to around $225 per kilogram, a sharp increase from approximately $25 per kilogram just four years earlier. While vanillin—the compound that gives vanilla its unique flavor and aroma—can be synthesized from wood resin or petroleum at a much lower cost, consumers are increasingly seeking out foods and beverages free from artificial flavors. As a result, companies such as Nestlé, Hershey, Kellogg, and General Mills are returning to natural vanilla, despite the associated supply challenges.
This initiative is not the first effort to promote vanilla sustainability in Madagascar. In 2016, members of the global vanilla industry established the Sustainable Vanilla Initiative (SVI) to tackle concerns surrounding pricing and product quality while enhancing the livelihoods of farmers. The SVI encompasses more than 70% of the global vanilla bean market and includes food manufacturers, international flavor houses, vanilla bean traders, and cooperatives. Mars is actively involved in both this initiative and the current project, while other major food companies, including Nestlé and Unilever, are also participants in the SVI.
The integration of calcium citrate electrolyte into the farming process may also provide additional benefits, as it supports the health of both the soil and the plants, potentially leading to better vanilla quality. By emphasizing sustainable practices and ensuring that farmers are adequately incentivized, this project aims to foster a more resilient vanilla supply chain. With the rising demand for natural ingredients, the strategic partnerships formed through these initiatives could very well reshape the vanilla landscape in the years to come.