"Vanilla or chocolate?" a question you've probably been asked hundreds of times. Vanilla is a flavor that has been given the 'basic' label and categorized as un-flavorful. In reality, the vanilla bean has one of the richest histories and is a highly influential crop on Madagascar's economy. Pure Vanilla bean is actually the second most expensive spice globally and grows from a Vanilla Orchid after it has been pollinated.
The Vanilla Orchid is native to Mexico and was not brought to Europe until the 1500's when Hernán Cortés, a Spanish Conquistador, introduced it to Spain (spicebayfoods.com). Vanilla Bean, however, was not successfully grown in Europe until the late 1790's because it was naturally pollinated by Melipona bees, a rare bee species, also native to Mexico (vanillapura.com). In the early 1800s, a method of self-pollination arose to promote Vanilla bean production. Through this method, each flower is pollinated by hand. Each flower only blooms for one day a year, so you can imagine how tedious a crop, like Vanilla, can be. Plants were eventually taken to Madagascar, where the vanilla market began to grow.
Today more than 80% of the world's vanilla supply is grown in the northern region of Madagascar (Business Insider). This has caused Madagascar to be extremely financially dependent on the vanilla bean supply and demand. According to the world factbook, over 80% of Madagascar's population works in agriculture (cia.gov).
In the 1980s, synthetic Vanilla was created and became the very popular alternative to this intensive and laborious commodity. This instigated a dip in prices and influenced many planters to stop producing Vanilla Beans because of its intense production; it simply was not worth it. Around 2011, the social push for ethical and traceable produce created a spike in vanilla bean prices, with large companies like Nestle committing to putting only natural Vanilla in their products. According to The Economist, "The wholesale price of vanilla bean has reached $500-600 per kilo" or around 2.2 pounds. This is an extreme difference from the $40 a kilo in just 2014 (economist.com). Because the production is so centralized in one area of the world, the supply of Vanilla is unstable.
In 2017 a cyclone hit the northern part of Madagascar, destroying a large portion of the Vanilla bean crop. This event triggered an abrupt rise in prices. The economic reliance on this unstable commodity has fashioned a volatile economy in Madagascar. The higher the prices of Vanilla, the more money gets poured into the nation. Although cash inflow is usually a good thing in a nation when it comes from an unstable source, the growth established is not sustainable. Through the insight of economics, we can interpret that something as 'boring' as Vanilla is a rare commodity that impacts millions of lives.
References
Central Intelligence Agency. (n.d.). Central Intelligence Agency. Retrieved September 19, 2021, from https://www.cia.gov/the-world-factbook/countries/madagascar/.
The Economist Newspaper. (n.d.). Why there is a worldwide shortage of vanilla. The Economist. Retrieved September 19, 2021, from https://www.economist.com/the-economist-explains/2018/03/28/why-there-is-a-worldwide-shortage-of-vanilla.
Foods, S. B. (2021, May 20). Where does vanilla beans come from? facts and history of Vanilla Bean. SpiceBayFoods. Retrieved September 19, 2021, from https://spicebayfoods.com/where-does-vanilla-beans-come-from-facts-and-history-of-vanilla-bean/.
Pagano, A. (2018, September 27). Why vanilla is so expensive. Business Insider. Retrieved September 19, 2021, from https://www.businessinsider.com/vanilla-expensive-stolen-madagascar-2018-9.
Vanilla Bee Extinction. VanillaPura. (n.d.). Retrieved September 19, 2021, from https://www.vanillapura.com/pages/vanilla-bee-extinction.
This was a fascinating read, interesting to see how a social push like for more "natural" vanilla can impact the economics of how it's produced and handled!