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Finding the path to fair and sustainable vanilla – a case study

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Finding the path to fair and sustainable vanilla – a case study

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Aromatic, sweet, creamy, and rich – consumers tend to have these positive associations about vanilla. It is not a surprise that vanilla is a major ingredient and flavor in sweets, treats, and beverages and is loved by many all around the globe. Yet the sourcing of vanilla beans and production of natural vanilla extracts which are used in many flavors and fragrances come with various challenges which are still relatively unknown to the public.

Before vanilla is ready for usage and further processing, its production requires two major time- and work-intensive phases. The first phase consists of producing green vanilla beans, typically from a semi-intensive agricultural environment managed by experienced farmers, in a rainforest climate. In addition, Vanilla orchids are capricious by nature and highly labor-intensive as each flower must be manually pollinated before baring a mature green bean nine months later. The second phase is similarly challenging and demanding because the green vanilla beans will enter a transformation process (called “curing”). During this phase, half a year is often needed for the beans to develop and reveal their commonly known shape, brown color, and divine aroma. Therefore, the global vanilla market faces highly seasonal-dependent production steps and tends to lose transparency under this long and complex supply chain. This causes extreme prices, quality volatility, and makes it difficult to ensure improvements within the supply chain.

In addition, consumer product manufacturers and suppliers are faced with the challenging task of creating profitable products and adapting to new consumer needs and expectations. According to “Takasago’s 2021 Vanilla Study”, many consumers prefer real vanilla extract in their products and about 73% of these consumers agree that their beloved vanilla should be sourced sustainably. Furthermore, as per the same study, most consumers, especially in Europe, believe that the best quality vanilla is produced in Madagascar. In fact, Madagascar currently supplies about 80% of the world’s demand for high-quality vanilla beans, while 14 other countries are growing, cultivating, and harvesting the remaining 20%.

Although this situation seems to be positive from a consumer standpoint, vanilla-rich Madagascar is one of the poorest countries in the world. Three out of four people are living under the poverty line, and its vanilla farmers are struggling with corruption, poorly developed infrastructure, lack of technology and knowledge to compete on a modern global market. Unfortunately, this situation is also the reason why Madagascar’s vanilla has been thrust on the international scene, resulting in the most price-competitive vanilla on the market.

With these challenges in mind, Takasago International Corporation started its local presence in Madagascar in 2012 with the creation of a joint venture with one of the leading local experts Ramanandraibe Exportation S.A., a 50-years-experienced Malagasy vanilla operator. The original goals of vertical integration with sourcing and manufacturing operation could not have been achieved without rapidly setting plans to upgrade sustainable aspects. This included a vision to build a fair, transparent, and traceable supply chain for vanilla together with the setup of industrial extraction facilities which directly add value in Madagascar.

Another obstacle has been the collection of standard data which describes differences relevant to the variability of all vanilla-producing rural areas. While know-how fragmentation has also been a tremendous obstacle in evaluating actual causes of vanilla production issues, the establishment of vanilla collection and curing centers in various vanilla-producing regions has helped to engage with local communities and to implement long-term sustainable plans, monitor regional issues, and collect needed data for the future.

In addition, another particularity of the work as a vanilla producer is time pressure because it is critical to sell green vanilla beans fresh. The regional collection centers have contributed to easing these deliveries for even the most remote growers.

Under an environment, where activities to develop and deploy standard protocols for the improvement of agriculture are almost nonexistent, ensuring the transfer of traditional know-how together with improved vanilla production practices becomes another critical point for Takasago. A secondary focus has also been the professionalization of the sourcing network and ensuring that practices are aligned with the nature of the product and minimizing negative environmental impacts.

Didier Lebret, Global Coordinator for the vanilla business at Takasago, explained: “Our initiatives were built up for several years and are key in gaining international recognition. Resources to fully control the vanilla supply chain in respect to local communities are not only documented but made through real facts and initiatives. This essential groundwork was needed to design and implement Takasago’s dedicated sourcing organization in full alignment with TaSuKI’s (Takasago Global Procurement Sustainability Key Initiatives) principles. This upstream integration at source, associated with dedicated support programs, not only contributes to securing supply but also improves the social and environmental conditions of local Malagasy vanilla farmers. This continuous local presence and concrete support continue to foster open and close communication with local farmers.”

RALAHADY M. (he/his, 56) a farmer in the rural parts of Madagascar explained: “I really love keeping up the long history of our family-owned vanilla plantation but commission agents were always haggling prices, so, I am happy to work now with Takasago to get fairer and secured premiums for our hard work.” 

As an example, Takasago’s early plan included activities to map and size each local vanilla farmer’s plantation, reaching the most isolated areas of the Mananara region. Later, environmental diagnosis for fair trade and organic systems was conducted and highlighted improvement opportunities for each plantation owner. This allowed Takasago to set up new bridges with more farmers and build a trusting foundation of a three-party partnership between Takasago, Ramanandraibe, and representatives of local plantation communities.

BE A. (she/her, 32) explained that “setting in fair trade and organic agriculture, together with the know-how received from training will give us not only the opportunity to earn more money but to gain more autonomy. It gives us also useful and applicable know-how to our everyday life and gives a sense of responsibility to preserve Mother Nature.” Planters have gained confidence while directly contributing to this initiative: not only supporting competitiveness on global markets and aligning with clients’ expectations but improving their direct environment.

While local communities who decided to join Takasago’s networks are diverse, they nevertheless confirmed common aspirations for their future. KASIMALY D. (he/him, 32), a newly established vanilla farmer, states that “All of us will benefit from certified vanilla beans, so the training which is provided by Takasago will also contribute to improvements in our household.”

MANANJOKY T. (he/him, 47) also comments that “being provided training and obtaining certification is continuous improvement and helps in becoming an expert in the vanilla growing business.” 

As these interviews clearly show, farmers have strong aspirations for a more stable income, improvement of living standards, and having their human and labor rights secured, which are not always ensured through the conventional market. Nevertheless, our study, like others, also confirms that Madagascar planters are still not experts in effectively managing their own business and are exposed to low revenues. Therefore, evaluating and finding vanilla growers’ production costs is essential in helping to find a beneficial market position for them and economically reconnect individual farmers’ work’s value.

This decade-long journey alongside farmers will continue and reveal more critical issues to improve traceability, quality, and overall sustainability of vanilla production.

Practically, a fair-trade development plan with four pillars aligned with local communities has been set:

Securing access to education ​to planter’s children and increasing school attendance.

Reforestation​ aligned with income improvement, including the planting of a clove tree nursery.

Improved access​ between areas beneficial to local planters' communities. This plan brings cooperatives members and local authorities to work together to rehabilitate roads and bridges.

Support for health centers​ benefiting local communities. This activity is done jointly with cooperative members executives, local authorities, and health officers.

This case study of the partnership between local vanilla operators and vertically integrated industries illustrates the importance that each role plays within the supply chain process to ensure long-term production. The contribution of all players involved across supply chains can help in improving sustainability for critical materials like vanilla. Mutual communication and exchange of know-how have been shown to be key in expanding transparent, organic, and fair vanilla supply to create delicious and indulgent vanilla flavors for everyone.