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Vanilla is a staple in any baker's pantry, but a recent confluence of events – a "perfect storm" – has led to an unprecedented spike in prices, with the cost of the ingredient rising to almost 20 times as much as it did a few years ago

Last March, Cyclone Enawo, the strongest cyclone to hit Madagascar in 13 years, tore through the island, damaging about 30 per cent of vanilla crops and reducing their expected harvest by a third.

W hen it comes time to replace that little bottle of vanilla in your pantry, prepare for some sticker shock.

"When we opened Provisions four years ago, we were selling a 4 oz bottle of vanilla-bean paste for $5.75, and now we sell it for $32," says Giselle Courteau , who owns the popular Duchess Bake Shop, as well as a small high-end store for home bakers next door called Provisions, in Edmonton.

Vanilla is a staple in any baker's pantry, but a recent confluence of events – a "perfect storm" – has led to an unprecedented spike in prices, with the cost of the ingredient rising to almost 20 times as much as it did a few years ago. A kilo is now $700, up from $40 in 2011, reports David van der Walde , director of Aust & Hachmann Canada, a Montreal-based vanilla importing company affiliated with the oldest vanilla importers in the world. It is now the second-most expensive spice in the world, after saffron.

The food industry has found itself scrambling to find affordable solutions, while vanilla growers face new challenges. And some restaurateurs now report an underground market for the ingredient has emerged.

"People think vanilla is so plain, so simple," says van der Walde , "but it's probably the most complicated flavour out there." The raw material for this wildly popular flavouring is not easily obtained. Vanilla is a high-risk, labour-intensive product; derived from orchids, each flower must be hand-pollinated, and the crops themselves are particularly susceptible to vine disease and storms before the pods are harvested by hand and cured in small batches using traditional methods.

‘People think vanilla is so plain, so simple,” says David van der Walde, director of Aust & Hachmann Canada, a Montreal-based vanilla importing company. ‘But it’s probably the most complicated flavour out there.’

Madagascar and its surrounding islands have always been the world's dominant supplier of vanilla, accounting for roughly 80 per cent of the global supply of the beans. Last March, Cyclone Enawo , the strongest cyclone to hit Madagascar in 13 years, tore through the island, damaging about 30 per cent of vanilla crops and reducing their expected harvest by a third. At the same time, the food industry's demand for natural vanilla has spiked considerably.

Vanilla is used not only in vanilla-flavoured products, but plays a supporting role, adding creaminess to other flavours, such as chocolate, as well. "Eighty per cent of the market is industrial vanilla, and that's what drives the pricing," van der Walde says. "It's the most important flavour in the food industry, by far."

Just before production dropped, he says, Nestlé , Unilever and General Foods – three companies that control about 80 per cent of the products on our supermarket shelves – decided they wanted their mainstream products to feature more natural ingredients. In place of artificial flavouring, they turned to real vanilla. "It was almost a perfect storm to create an environment for higher prices."

Now, theft of vanilla beans is on the rise, pressuring farmers to protect their crops and often harvest the beans early, which can result in an inferior product. While some may see the combination of circumstances as an opportunity to establish a stronger foothold and gain a larger market share, it takes a plantation of vanilla orchids 4 to 5 years to get up and running, so there's no quick solution. "India has been on the sidelines trying to get production up," van der Walde says. "I suspect one day they are going to figure it out and become a major player in vanilla, but they're not there yet."

According to the United Nations Food and Agriculture Organization, Madagascar harvested 67,823 hectares and produced 2,926 tonnes of vanilla in 2016, compared with 14,104 hectares in Indonesia, 1,863 hectares in Papua New Guinea and just 979 hectares in Mexico. With so much of the world's vanilla coming from one place, other growing regions don't have the capacity to pick up the slack.

According to the United Nations Food and Agriculture Organization, Madagascar harvested 67,823 hectares and produced 2,926 tonnes of vanilla in 2016.

With plans to expand his patisserie this spring, Calgary pastry chef Yann Blanchard likes to have a range of vanilla varietals in his kitchen, and hoped to offer three types of vanilla ice cream as well as vanilla ganache-filled chocolates, but is now rethinking his menu because of rising costs and inconsistent supply chains.

"I had quite the supply of vanilla from Mexico, Tahiti and Madagascar, so I wasn't worried," says Blanchard, "but now I am. Either I can't get the provenance I want, or the price is ridiculous. I used to get Mexican beans straight from the farmer, but I can't get affordable shipping any more. Tahitian beans are my personal favourite, but hard to import."

Blanchard says he was made aware of struggles within the vanilla industry as a global issue at the September session of the Relais Desserts Association; Blanchard is the only pastry chef in Canada to be honoured with the distinction of membership, and joins other pastry chefs in France each year to share ideas and discuss issues facing the industry. "One member even shared a recipe he developed to make our own vanilla," he says. "It was pretty impressive – it had melon purée as one of the 20-plus ingredients."

It seems a black market for vanilla has even popped up. "We've had multiple phone calls and e-mails from super sketchy people telling us they can get us real vanilla at a cut-rate price," says Courteau , who adds she didn't take them up on their offers. "We even had someone call us and tell us to meet him at his van at an undisclosed address and he would sell us some for cheap." She doesn't know of anyone who has, and assumes they just looked up her bakery along with others on the internet. "I'm sure the high prices and shortages have created some sort of an underground market, but we would never knowingly buy any products that way."

Bakers needn't go to such extreme measures. Even when vanilla beans aren't at their high point cost-wise, artificial extracts are commonly used. But the recent shortage of beans has increased demand for vanillin , the primary flavour component of cured vanilla beans, from other sources as well. There are two types: natural, derived from trees, clove oil or rice pulp; and synthetic, derived from guaiacol, a byproduct of the petroleum industry.

Vanilla is used not only in vanilla-flavoured products, but plays a supporting role, adding creaminess to other flavours, such as chocolate.

"Consumers want natural, but price consideration is important," says Amie Byholt , Director of Sales in the Americas for Borregaard , one of the world’s leading suppliers of vanillin and ethylvanillin, and the world’s only manufacturer of sustainable vanillin from wood.

Now there's not enough vanillin to go around, either, as the food industry develops a constant current of vanilla-flavoured products. "[Food] companies aren't wanting to be reliant on vanilla beans right now," Byholt says. "The availability is what's most concerning – people have a globally branded product, and if they can't get what they need to create that food product, that's a scary situation. It's not only about price, but protecting supply when you have an ingredient that you absolutely need and one day you can't get." The solution: natural alternatives that taste like the real thing.

So what does it mean for your next batch of chocolate-chip cookies? Read the label the next time you pick up a bottle of vanilla at the grocery store. "It has the same exact labelling, same colour and same type, but if you look closely it doesn't say vanilla extract, it says vanilla flavour," Byholt says. "It's a good example of how far these prices have pushed companies– that has never happened in the retail market before."

If you do find vanillin on the ingredient list, it's not necessarily second best – it may just be the new vanilla.

Editor’s note: In an earlier version of this article, guaiacol was incorrectly referred to as glycol. As well, vanillin was described as natural. In fact, it’s the raw ingredients that are natural.