Vanilla Prices Are Skyrocketing! We Found Out Why.

Updated: Nov. 01, 2023

Balls of vanilla ice cream in a white bowl on a wooden background.

Shutterstock / GoncharukMaks

Vanilla prices are on the rise. What's to blame? Culprits include the extremely labor-intensive methods needed to grow and harvest this popular spice, increased demand, and extreme weather conditions in the area where it is grown.

Though some may say vanilla is boring (these recipes will change your mind), the market for vanilla is anything but. Over the past year, vanilla prices have skyrocketed. Only five years ago, vanilla could be found for $10 per kilo. Recently, at over $500 per kilo, vanilla was trading at a price higher than silver, making it quite a precious commodity. Long story short, your favorite vanilla bean ice cream and vanilla wafer cookies are about to get more expensive to make. But why?

Growing vanilla requires a lot of work

Vanilla beans, which are the seeds of a tropical vine orchid plant, are not an easy crop to grow. Originally native to Mexico and parts of South America, the tropical vine orchid was introduced to Madagascar by the French in the nineteenth century. Today, 80% of the vanilla crop is grown in Madagascar. Once planted, it can take up to four years to reach maturity. In its native Mexican habitat, the plant is pollinated naturally by birds and insects. However, those pollinators don’t exist in Madagascar. Instead, the plants must be pollinated by hand. And as it happens, even pollinating the plants by hand isn’t an easy task, given that the plants only bloom for one day each year. Psst! Bees are a big deal. Here are 8 ways you can help save bees today.

Nine months after the plants are pollinated, the green beans are hand-picked at the height of their ripeness. (Some farmers, nervous about having their beans stolen, have taken to picking the beans early, leading to a less flavorful product.) The process is far from complete, however. Months of blanching, sweating and drying still await, before the vanilla beans can hit the market.

Historically, Madagascar vanilla bean farmers received little payment for their crop, meaning the incredible effort it took to grow and harvest the beans was hardly worth the payoff. As a result, many farmers stopped growing vanilla beans altogether, leading to a major decrease in supply.

Increased demand

In the past, manufacturers have dealt with high vanilla prices or decreased supply by replacing real vanilla with a synthetic alternative called vanillin (learn more about the difference here). This aromatic chemical compound is commonly derived from wood pulp. Taste-wise, you would be hard-pressed to discern artificial vanilla from the real deal in most recipes. However, in recent years, consumers have become more food label-conscious and have begun to demand natural ingredients. As a result, major manufacturers, including Nestlé and Hershey’s, have pledged to change from artificial flavorings to natural ingredients in their food products. In simple economic terms, this increased demand, combined with a decreased supply, has led to a historic rise in vanilla bean prices. Even the spent vanilla market has seen an increase in price. Some companies use spent vanilla beans to add vanilla bean specks to their products. Doing so allows the manufacturers to add “vanilla beans” to the ingredients list, even if the vanilla flavor itself comes from artificial ingredients.

Mother Nature stepped in

A pair of cyclones laid a major blow to the 2017 vanilla bean crop in Madagascar. As a result of these extreme weather events, the vanilla bean crop was almost entirely wiped out. As a result, vanilla prices leaped to over $600 per kilo. The price per kilogram of vanilla beans has been averaging between $500-600 per kilo ever since, and it doesn’t appear that the vanilla price will be going down anytime soon.

The bottom line

Farmers in Madagascar harvest their vanilla bean crops in June. Only time will tell whether this year’s crop will be a boom or a bust. But in the meantime, next time you’re in the grocery store, we’d suggest putting a few extra bottles of vanilla extract in your cart just in case. Or you can pick up some vanilla beans and make your own vanilla extract at home.

Try these stunning vanilla recipes.

1 / 27

Pressure Cooker Very Vanilla Cheesecake Cinnamon and vanilla give this cheesecake so much flavor, and making it in the pressure cooker creates a silky, smooth texture that's hard to resist. —Krista Lanphier, Milwaukee, Wisconsin Get Recipe

Vanilla Cream Fruit Tart Exps Bk22 1819 P3 Md 05 05 1b

Fruit TartIt's well worth the effort to whip up this creamy fruit tart bursting with juicy berries. A friend gave me the recipe, and it always receives rave reviews at gatherings. —Susan Terzakis, Andover, Massachusetts