Why is vanilla so expensive?

Like us, you may be wondering why in the world vanilla extract has doubled in price in recent years. We found that a number of factors have caused the price to skyrocket: vanilla bean theft (!!), difficult pollination, extreme weather, habitat loss and rapidly growing demand because of the natural food movement. The bottom line: the once basic, "boring" vanilla may wind up becoming a rare sought-after delicacy.

So what's a baker to do? We'll provide information on your alternatives (not very many, we're afraid) in a blog post next week.

We found a great article on the subject in Business Insider. We're reprinting excerpts  from the body of their article below. They also include a cute graphic video in their online article, which you can see here.

vanilla is hard to grow

One reason vanilla has gotten so expensive is, it's hard to grow. Vanilla vines take two to four years to fully mature, and their flowers only bloom for one day of the year. In order for the plants to produce beans, they have to be pollinated that day. In most places where vanilla is grown, it isn't a native plant, and there aren't bugs or birds capable of pollinating the flowers. Vanilla is native to Mexico, but deforestation there has greatly reduced its natural habitat. In Madagascar, where over 80% of vanilla is produced, the flowers have to be pollinated by hand. The pods need several months to cure after harvesting. The whole process is time-consuming and labor-intensive. But the record high price of vanilla also has to do with changes in the vanilla market.

artificial vanilla is less popular now

In the 1980s, cheaper artificial vanilla overtook the market. Vanilla farmers cut back production because they weren't making enough money. But around 2011, demand for real vanilla rose again. Big companies were joining the all-natural trend, pledging to eliminate artificial flavorings from their products. It's taken a while for the vanilla farmers to get back in the game and many no longer want to.

black market vanilla

Growing vanilla is a stressful and volatile business because there is such high demand, vanilla beans are a target for theft. After working hard to cultivate their crops some farmers have their beans stolen. As the stolen beans move up the supply chain, they get mixed in with legally purchased beans making it difficult for buyers to know which are which. The prevent theft, farmers pick the beans before they're ripe and unripe beans means lower quality vanilla. Farmers also try to prevent theft by branding their vanilla crops with a metal pronged brand. That way buyers can identify what farm the vanilla came from.
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weather problems have added to the shortage

Farmers also run the risk of having their crops destroyed by extreme weather events. Cyclones are common in Madagascar and climate change is increasing the frequency and intensity of those storms. If a cyclone were to wipe out vanilla crops next year, it would take until at least 2022 for new plants to start producing beans, and farmers might not want to take that risk. So the supply could continue to drop even further.