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Vanilla fever

Vanilla fever

How did hunger for the humble vanilla pod lead to greed, crime and riches? Wendell Steavenson travels to Madagascar to meet the new spice barons

How did hunger for the humble vanilla pod lead to greed, crime and riches? Wendell Steavenson travels to Madagascar to meet the new spice barons

Wendell Steavenson | June/July 2019

I follow Felicité Raminisoa and her father, Romain Randiambololona, up a narrow track along the forested slopes of her family’s farm in southern Madagascar. It is lychee season and, as we walk, we break off branches of fruit and peel off the pink, spiky shells. Large yellow jackfruit grow like Chinese lanterns among loquat and clove trees, pepper vines and coffee plants. Sapphire dragonflies flash by as they chase each other over ponds of tilapia dammed into the valley. The air is muggy under the banana leaves but grows fresher as we climb. In all directions we can see vanilla vines winding around tree trunks. Each zigzag stem has been trained so that it grows no higher than Raminisoa can reach. Every so often she stops at a pale-yellow bloom and parts its waxy petals. With a spike snapped from an orange tree, she delicately scrapes away the membrane separating the anther from the stigma in order to pollinate the flower. This is a task that requires perfect timing. Each flower must be pollinated by hand on the morning it blooms or the beans won’t sprout.

The family began to plant vanilla vines about 20 years ago mostly as “decoration”, says Randiambololona, his big grin punctuated by a missing tooth. At first the family sold fresh green vanilla pods to tourists, surprised that they would pay anything for them. But in 2014 the price of vanilla began to rise. Over the next three years it went from less than $40 per kilogram to more than $600 per kilogram. It felt like money was growing on their trees. In 2016 Raminisoa travelled to the northern region of Sava, where vanilla has been grown for generations, to learn how to cure the green pods into the commodity that was in such demand: pungent and wizened black beans.

It can be difficult to grow vanilla in plantations, where it becomes susceptible to disease. But the humid heights of Madagascar offer the right climate for the plant to thrive. And the large pool of poor smallholders on the island provides abundant workers to grow this labour-intensive plant.

In pods we trust

A quality-control chief in a co-operative in Belambo

Curing vanilla pods requires precise judgment and intuition, like winemaking. The beans, which grow in long green-fingered bunches, are harvested individually. Green vanilla must be blanched in hot water at a temperature of between 62°C and 64°C within a week of being picked. Over the next three months, the vanilla is wrapped in blankets, then massaged and spread in the sun to dry. Green vanilla is flavourless. The enzymes that transform the glucovanillin in the plant into vanillin – the molecule that gives vanilla its distinctive aroma – emerge only through curing. One expert described the smell of high-quality cured vanilla to me as a combination of prunes, leather and Play-Doh.

When Raminisoa returned from the north she built a curing hut on the slope behind her parents’ house. “You have to have everything prepared,” she says. “Charcoal to heat the water, large pots, blankets and drying racks. In the north they have a special song they sing, about paying attention, about having patience.” Working with vanilla, she explains, “needs discipline and passion”.

The family income rose with the price of vanilla. But this has put their crops – and even their lives – at risk. In 2015 the whole family congregated for a funeral. When they returned home they found that all the trees in the lower part of their property had been stripped of their pods. Everyone knew who the culprits were, says Raminisoa, but the police did nothing.

Few Malagasys have much confidence in the state. A coup in 2009 scared away foreign investors and tourists. The soaring price of vanilla has been accompanied by an opportunistic crime wave: raiders rip out whole vines to transplant them elsewhere and armed robbers hold up warehouses. Estimates vary but upwards of 15% of the crop is stolen each year.

Like vanilla farmers all over Madagascar, Raminisoa’s father and brothers now patrol their fields at night. They band together with neighbours and hired guards, and brandish machetes. Bush justice can be brutal. There are stories of beatings, even decapitations. The United Nations Commission on Human Rights says that over 150 Malagasy died between 2016 and 2018 because of vigilantism.

Over the past two years, despite thefts, a drought in 2016 and rain during the drying period last season, Raminisoa’s family has earned more than $20,000 in a country where the average income is less than a dollar a day. Previously the family scratched a bare living from growing bananas, coffee and rice. The vanilla boom has enabled them to buy a cow, a new electricity dynamo and a rice-planting machine that they hope to rent out. Raminisoa bought a house in the nearby town so her four children can live closer to their school. She finished her education at 13; her kids, she hopes, will go to university.

Pod production line
Workers sort bundles of vanilla at the Virginia Dare warehouse in Sava

Though Madagascar now produces 80% of the world’s vanilla, the vine is native to Mexico. The Maya were the first to cultivate it in the jungles of the Yucatan peninsular. They flavoured their chocolate drink with the spice. When the Spanish conquistadores arrived early in the 16th century, they took both cacao and vanilla back to Europe. By the end of the 18th century, Mexico was exporting a million vanilla beans a year to Europe.

Vanilla was considered a luxury. Its delicate flavour is best expressed in the presence of fat, which is why the creams and custards of the elite’s pastry chefs became its natural milieu. One of its earliest appearances was in a recipe for “vanilla ice” in a cookery book published in Naples in the 1690s. Thomas Jefferson fell in love with French food when he served as the American ambassador to France in the 1780s. He transcribed many recipes including one for “ice cream”, using egg-yolk custard simmered with “a stick of vanilla”. When he became president in 1801, Jefferson served these dishes in the White House – his import eventually became a classic American desert.

But for well over a century real vanilla remained out of the reach of most Americans. Spain controlled the Mexican trade and though a number of people tried to grow vanilla elsewhere, the blooms failed to produce beans because they lacked natural pollinators. It took a young slave boy called Edmond Albius, working on a plantation in the French colony of Réunion, to discover a method for hand-pollinating vanilla flowers in the 1840s. His technique quickly spread to nearby Madagascar, where French administrators encouraged its cultivation.

Artificial vanilla was developed around the same time. Nearly 200 molecules give vanilla its subtle flavour. Artificial vanilla synthesises just one of these – vanillin. This used to be obtained from cheaper products such as cloves and wood (today the vast majority of artificial vanilla is derived from petrochemical by-products). The development of artificial vanilla went hand in hand with the industrialisation of food production in the mid-to-late 19th century. New manufacturers such as Fry’s, Cadbury’s and Nestlé all used it at that time to make their chocolate silkier and more buttery. Vanilla essence (as distinct from vanilla extract, which is the concentration of natural vanilla pods in alcohol) found its way into cakes and biscuits. Vanilla is now used in thousands of the food products we find in our supermarkets. Over the years, it has come to describe anything that is bland, unchallenging and ordinary.

Häagen-Dazs shook things up. In the 1990s the company started selling its ice cream as a premium, indulgent treat. Their advertising campaign was sexy and risqué – beautiful people tempering their lust with a ball of the frozen stuff. It was a triumph of branding. The name Häagen-Dazs was confected to suggest European sophistication (the firm is American). The picture of a vanilla bloom on the carton drew attention to the vanilla extract that gave the ice cream its rich flavour. The Häagen-Dazs moment was one cause of the vanilla rush.

Another one was broader and more recent. Over the past 15 years, food companies have faced increasing pressure from consumers to use natural, ethically sourced ingredients. Flavour companies began to trace beans back to their original villages and farms in order to earn certifications of fair trade and sustainability that commanded top prices. In 2015 Nestlé announced that it would eliminate artificial flavouring from its chocolates sold in America, citing consumer interest in more natural ingredients. Other multi­nationals followed. It didn’t hurt that the price of natural vanilla was low. Among artisanal and mass-market producers alike, flecks of vanilla became a proxy for quality.

Madagascar is one of the poorest countries in the world, according to the World Bank. Near-impossible logistics reinforce its poverty. The island is close to the size of France, and in the rainy season the bush roads turn into impassable rivers of mud. It can take four days to drive from Sava to Antananarivo, the capital, a distance of 550km. The towns boast banks, public transportation, clinics and high schools. The bush has almost no amenities.

Even within rural regions in this small nation there are clear variations in wealth. In the Central Highlands, where the hills are terraced into rice paddies, hand-pulled rickshaws are the main form of transport in the towns. When I flew north, to the heart of vanilla county, I could see new fleets of yellow motorised tuk-tuks. On the drive, I noticed fancy new “vanilla mansions”. Several storeys high, painted red or bright blue and mounted with balconies, these are fenced off by concrete balustrades and garishly lit up at night in a country where most people have no access to the electricity grid. Sava is in the grip of a heady vanilla boom. By some estimates, over $800m poured into the region in the 2017 season alone as foreign buyers bought vanilla.

For many years Madagascar's government set the price of vanilla at around $80 a kilogram. Harvests were variable and sometimes ravaged by cyclones. A portion of the crop was stockpiled as insurance against years when yields were low. This forestalled shortages and prevented price fluctuations. Between 80,000 and 100,000 smallholders sold their green pods to middlemen known as “collectors”. These, in turn, sold them to preparers, who owned curing warehouses, or exporters (often Chinese-Malagasy families who had been in the business for generations). The beans were then bought by international traders or large foreign flavour companies such as Symrise and Firmenich in Europe, and Virginia Dare in America. These rendered the vanilla into high-quality extract to supply the big multinationals: Nestlé, Unilever, Mars.

It was a stable if swampy system, but not all buyers felt they had fair access to Madagascar’s vanilla. In the early 1990s, as part of a wider privatisation policy, the World Bank insisted that vanilla prices be allowed to float. Yet no market institutions or regulations were put in place. In the ensuing free-for-all, the price of vanilla plummeted to below $40 a kilogram and farmers neglected the crop.

The path from pod to pot of ice cream is a long one and could not be hurried in the face of rising demand. Many vanilla vines grow on forested slopes and often lie several days walk from paved road. A newly planted vine takes three years to bear pods. Even once it does, says Henry Todd of Virginia Dare, it can take another two years for the fruit to reach a tub of ice cream. Todd, a boyish American in his early 50s, is the son of a vanilla trader who sent him to France for his education so that he could learn the language of the flavour fluently. He has spent his working life in Madagascar immersed in vanilla production. “The supply chain is long and complex and a little bit opaque because of the lack of infrastructure,” he says. For many years, collectors acted as the hinge in the market, linking farmers with exporters, the bush with the road. They brokered deals and financed loans.

 

 

After the market was liberalised – but before the current boom – exporters generally set the price of vanilla. They weighed the expected global demand against the size and quality of a harvest. But as demand rose, many collectors – the middle men in the system – tried to pay low prices to growers while selling to exporters for much more. By 2017, some exporters were paying exorbitant sums for poor quality beans. As the price mounted, speculation and stock-piling became rife. Several hundred collectors multiplied into thousands of middlemen frantically buying and selling, often to each other. Farmers played the market too, half curing their vanilla and then preserving it in vacuum packs until the price rose again. This created more fluctuations in the market and damaged the all-important vanillin content of the beans.

“Every week, a different price,” shrugs one man, hanging out with a group of small-time collectors on a side street in Antalaha, the vanilla capital of Madagascar. “Last year was good, we had many millions,” says his friend, who wears a medallion around his neck and has tattoos on both shoulders. “A lot of people bought four-by-fours, big motors. We bought everything, even leather sofas.”

I spent almost two weeks in Sava observing the vanilla market. Every time I thought I had worked out the relationship between supply and demand, quality and processing, the hierarchy of middlemen and the relative price of green and black vanilla, I found that a new factor – currency fluctuations, corruption, cyclones – confounded me anew. “That’s about right,” Todd sympathises. “That’s one of the things vanilla people love about the business: it’s never the same season twice.” But why did the price rise so high? Though demand had risen, it hadn’t grown tenfold in three years. And although the Enawo cyclone blew through Sava in March 2017, it didn't destroy 90% of the vanilla vines.

In 2018, the price fell back a little to around $400, from a peak of over $600. Foreign buyers like Todd believe that the industry is still in “crisis” and publically rue the deterioration of quality caused by speculation. But privately, Todd and almost everyone else I speak to agree that money from the illegal rosewood trade fuelled the vanilla boom.

Rosewood is a beautiful hardwood that grows abundantly in the forests of Madagascar’s national parks in the Sava region. It is prized for its deep-red hue, particularly by furniture-makers in China. Logging from national parks is illegal but has always been carried out on a small scale. But after storms toppled many trees in 2007, Madagascar’s president granted export licences to several traders to buy wood felled by “acts of god”. Some interpreted this as permission to start cutting down trees again. The brokers of illegal rosewood sales often operated in vanilla regions and had connections to vanilla collectors.

In 2010 the international community, concerned about deforestation, pushed the Madagascan government to close the loophole allowing rosewood exports. The vast sums that had been made needed an outlet. Much of the rise in vanilla prices seems to have been fuelled by money laundering.

Todd and executives at other large flavour companies have been grappling with the varying quality and price fluctuations of Madagascan vanilla for years (along with logistical challenges, such as transporting tens of thousands of dollars in rucksacks across the bush to pay for pods). Virginia Dare’s main client is General Mills, which owns Häagen-Dazs, one of the world’s largest customers of natural vanilla. No matter the price, Häagen-Dazs’s brand identity requires its use.

In 2017 the quality of beans plummeted: so much green vanilla was being stolen from the vine that many farmers were picking their pods early and unripe. Even so, prices were higher than they had ever been. Todd and other buyers realised, with increased urgency, that the only way forward was to strengthen direct relationships with farmers and cut out the middlemen who were manipulating the market.

What a scoop

Young workers on a stroll in Belambo

Over the past four seasons, Virginia Dare has worked directly with a farmers’ co-operative in the village of Belambo, north of Sambava, to ensure that they have a reliable supply of vanilla. They pay farmers a fair price and train a new generation to cure the stuff. Belambo is 18km from the paved road, and takes an hour to reach on the back of a dirt bike. Chickens peck at scraps; zebu, a species of humped cattle, loll under jackfruit trees. At a handful of “hotelys” – small eateries – you can buy a dish of delicious zebu stew with local red rice. Yet the young men wear new American sports gear and rev shiny dirt bikes. Some sit in the shade chewing qat or playing music from handheld speakers. “Three or four years ago, the bush was silent,” Todd tells me, “now it’s full of music.” It’s also better lit than it used to be. Almost every house has a cheap Chinese solar panel on the roof to provide electricity.

According to Madagascar’s Central Bank, between $340m and $450m is stashed under the new mattresses in Sava. Many farmers don’t trust the banks, which anyway are far away and hard to reach. Most people pay their day-to-day expenses using mobile-phone accounts. But there is no infrastructure to handle the large number of bank notes needed for transactions during vanilla season. Prices in Sava are often double those in Antananarivo, the capital. At $10, a chicken costs more in Belambo than it does in Paris.

In 2015, the first year that the vanilla price jumped, everyone splashed out. One man apparently filled an inflatable pool with beer; another took to sleeping on four mattresses. People treated themselves to mobile phones, solar panels, TVs and dirt bikes. In the second year people went for four-wheel-drive pick-ups, rebuilt their houses with new wood, corrugated iron or even cement, which is incredibly expensive to transport into the bush. In the third year, they bought houses in towns so that their children could attend better schools. Now people are beginning to think about longer-term investments: buying land and starting small businesses, making furniture to satisfy new demand.

Rabezaka, who is probably in his 60s and is one of the older Belambo co-operative farmers, rolls his eyes at the excesses of some of the villagers. He has seen it before: in 2003 the vanilla price briefly shot up to $500 a kilogram after a cyclone hit, but soon crashed. That year he earned enough to build and furnish a wooden house. This time he has rebuilt his home with concrete and painted it pink, his wife’s favourite colour. And, he says, “it was the cheapest.” His wife, Juliette, wears an old T-shirt on which is written “Burberry”, a gold chain with a medallion and gold earrings. His granddaughter, Suamarie, who looks about 11, tells me she likes mathematics and wants to become a doctor. “And a vanilla farmer!” calls out her grandfather.

When I ask the women how their lives have changed since the vanilla boom, they laugh as if to say “not much”. Juliette shows me her kitchen, a low hut adjacent to the house, and squats down to add more wood to the fire under a big stew pot, coughing and squinting to show me how uncomfortable and smoky the unventilated space was. But, she says, they eat much better food now. For the first time they can buy yogurt in the village. “The thing we don’t know is how to prepare the vanilla to cook with,” admits Rabezaka. I say that the best thing is to infuse it into milk or custard. Rabezaka and his wife and daughter are unimpressed; vanilla does not feature in Malagasy cuisine.

Rabezaka, like the rest of his generation in Belambo, rues the social changes that prosperity has brought, even as he enjoys the new comforts. People had once been willing to lend a hand when required, he says. Now they expect to be paid. Girls flock around the rich young collectors. Boys don’t want to continue their education. All anyone wants is a piece of the vanilla pie. And it has become less safe.

I visited the Virginia Dare warehouse, where members of the Malagasy army were guarding $5m-worth of vanilla. Workers – mostly women – are frisked by hand every time they leave. An alliance of local vanilla networks, exporters and the military have tamped down the violence. But the benefits of the boom have been unevenly distributed. A small tax is supposed to be levied on each vanilla transaction, but most sellers sidestep this. Export taxes are imposed according to volume rather than value. The Malagasy government has made little effort to cash in.

The contrast between private wealth and impoverished public services is striking. In Belambo people complain that there is no drinking water, that the school building is dilapidated, the teachers barely literate and that there is no clinic or doctor nearby. The lack of services is so axiomatic in Madagascar that it rarely provokes much outrage.

In recent years, some multinationals have begun to fill the void. Symrise, a big flavour company, has set up a health-insurance scheme for several dozen villages. Alban Bonnet, their sustainability manager, explains that these efforts are part charity, part capacity-building and part self-interest.

Many observers believe that a crash will occur soon – and fear that villagers are ill prepared for it. Todd’s great hope, shared with farmers in Belambo, is that the village co-operative will eventually cure its own vanilla and become an exporter in its own right. It would be much easier, says Todd, to take delivery of cured black vanilla without the investment and complications of operating in Sava. It’s a model that would change the relationship between Western consumers and developing-world producers, eradicating tiers of middlemen. But the volatility of the vanilla market means that multinationals could ultimately be forced to look elsewhere for supplies. Historically market corrections have been catastrophic; most buyers would prefer a stable and fair price – around $100 to $150 per kilogram – to a dirt-cheap but potentially volatile one.

High prices have driven down demand by 30% from its peak, as food companies have started to incorporate artificial vanilla again. Some artisanal ice-cream makers no longer offer the most basic flavour. Gilles Marchal, a Parisian pâtissière, says that many of his colleagues have stopped using vanilla altogether. “When the price got to €500 ($560) a kilo they just said, ‘that’s enough’.”

Blooming marvellous

A vanilla flower is pollinated by hand

In December 2018, the talk in Sava was of the lateness and paucity of the vanilla blooms. A poor harvest could send the price soaring again, prolonging the uncertainty. But it could also be the last gasp for the pod boom. Indonesia, Uganda and Papua New Guinea are all planting vanilla. American agriculture researchers are exploring ways to genetically engineer a more labour-efficient plant.

The villagers of Belambo are enjoying the glory days while they last. I watch as one of the new bicycle vendors arrives with an insulated box from which he produces milk-flavoured choc-ices at 20 cents a pop. It’s the kind of consumption – an everyday luxury – that flourishing economies are built on. I ask 12-year-old Willis Law if he likes ice cream. “Of course,” he says, “it’s good to have something cold when it’s hot, and it’s rich and cold and sweet.” The kids lick and slurp, then cheerfully drop the wrappers onto the road.