The vanilla market - Italy (2024)

1.2 A very volatile world market

The vanilla market size is estimated at $*.** billion in **** and is expected to reach $*.** billion by ****, growing at a CAGR of*.**% during the forecast period (***). Because of its many applications in the food and related industries, vanilla is one of the most expensive spices traded on the international market. The main contributor to fragrance, flavor, and pleasant aroma is vanillin, an essential compound in vanilla pods. The production of ice cream, chocolate, baked goods, puddings, medicines, alcoholic beverages and perfumes mainly involves the use of the vital essence of vanilla.

Global vanilla market value Italy, ****-****, in billions of dollars (***) Mordor Intelligence

Global vanilla production, during the period from **** to ****, registered an overall increase of *.** percent, marking a moderate but steady growth in the global market. This increase can be attributed to several key factors, including expansion of cultivated areas, adoption of improved agricultural practices, and increased demand for natural vanilla in the food, cosmetics, and perfumery sectors. In particular, vanilla, known to be one of the most valued and expensive spices in the world, owes its high demand to the growing preference for natural and organic ingredients among consumers.

Value of world vanilla production World, ****-****, in tons Faostat The ...

1.3 The domestic market driven by imports

The only Italian sector with the keyword "vanilla" in its description is registered under ATECO **.**"Cultivation of spices, aromatic and pharmaceutical plants" and includes:

the cultivation of permanent and non-permanent spices and aromatic plants: pepper, chili peppers, nutmeg, mace and cardamom, anise, badian, fennel, cinnamon, clove, ginger, vanilla, basil, parsley, chervil, tarragon, marjoram, cumin, oregano, rosemary, sage, coriander, bay leaves, hops, other spices and aromatic plants cultivation of plants used primarily for pharmaceuticals or for insecticides, fungicides and the like cultivation of crops for pharmaceuticals and narcotics

The cultivation of vanilla in Italy is not common because of the climate, which is not ideal for growing the orchids from which vanilla is made. Vanilla requires a humid and warm environment, typical of tropical climates. However, some greenhouse or controlled environment growing initiatives could be present, taking advantage of specific techniques to recreate the necessary conditions. These activities, however, remain rather limited and do not represent large-scale production.

The Italian vanilla market is therefore driven by imports. As shown in the chart below, the value of imports dominates the Italian foreign market scenario. Despite this, imports are down from **** to ****, registering a **.* percent decrease.

Exports, Imports and Vanilla Coverage Rate Italy, ****-****, ...

2.1 A flavor popular in the world, less appreciated in Italy

Vanilla is a popular product all over the world because of its taste and smell. According to a study conducted by researcher Asifa Majid of the University of Oxford, the smell of vanilla is the most valued by all cultures around the world. The sample consisted of *** people from * different populations with different lifestyles and backgrounds. [***] In the study, each subject was presented with ten scented sticks, which they had to rank from most pleasant (***) as the most pleasant scent. This is followed by ethyl butanoate, with its fruity scent, and linalool.

However, we note that this flavor is not one of the most loved by the Italian population. In the graph below, we take the example of the favorite flavors of gelato, a widely consumed product and culturally anchored in the Italian lifestyle. We can see that vanilla is not on the podium, in favor of chocolate (***) flavors and their preference for local products leads them to favor these classics over vanilla.

Favorite ice cream flavor Italy, ****, % Source: ****

2.2 Sectors driving demand: The food industry

An important feature of vanilla demand is that it is not absorbed directly by individuals, but by various industries that use this raw material to produce refined products such as ice cream, yogurt, cakes, cookies, as well as perfumes, deodorants, shampoos, and other personal care products. Whether in raw or pulverized form, it is used :

By the food industry, particularly industrial chocolate manufacturers (***); By thecosmetics industry, particularly during the industrial production process of perfumes and other care products; By individuals directly or by various artisans (***).

The food industry is the main consumer of vanilla pods. Vanilla is the main flavor used worldwide. it is far ahead of natural coffee and cocoa flavorings. Many industrial recipes include real vanilla beans in ice cream, yogurt and desserts. It can be in the form of vanilla powder, vanilla extracts, and natural vanilla flavorings. It is also used in some beverages, for example, Coca-Cola is one of the world's largest consumers of vanilla, taking up an average of ** percent of the world's consumption[***].

Food industry revenues Italy, ****-****, in billion euros (***) Istat

2.3 Sectors driving demand: The cosmetics industry

The cosmetics industry

The cosmetics industry also consumes vanilla, particularly in the form ofvanilla dioleoresin, a plant exudate obtained by macerating vanilla pods in alcohol. This by-product requires a large amount of natural vanilla: *** kilograms of vanilla are needed to obtain ** kilograms. The distillation of this vanilla oleoresin yields vanilla absolute, which is widely used in the production of essential oils and perfumes. [***]

Despite the negative effects due to the prolonged Russian-Ukrainian conflict, high tensions on raw materials and related price increases, **** confirms a recovery dynamic in the production and market values of the Italian cosmetics industry. In fact, with the consolidation of the "new normal" and the overcoming of the production and market levels of the pre-pandemic period, the responsiveness and adaptability of the domestic cosmetics industry is reconfirmed, recording a **.* percentage point growth in overall turnover by the end of ****, from **.* billion euros in **** to **.* billion euros in ****.

COSMETICS INDUSTRY TURNOVER **.* billion euros SHARED VALUE CREATED BY THE COSMETICS SYSTEM IN ITALY **.* billion euros TURNOVER OF THE COSMETICS SUPPLY CHAIN ** billion euros VALUE OF THE COSMETICS ECONOMIC SYSTEM IN ITALY ** billion euros Italian cosmetics exports grow by **.* percent (***).

Breakdown of cosmetics industry sales by destination channel Italy, ****, % Cosmetics ...

3.1 Market structure and value chain

Analyzing the vanilla production process, the following steps should be mentioned:

Production: about **,*** producers worldwide Harvesting and processing Harvesting: about *,*** harvesters Product quality control Packaging Storage Treatment and export Import: brokers, traders Industrial processing Grinding vanilla into industrial powder for use in flavoring by specialized players Pulverization of vanilla to obtain an essence used in perfumery by other specialized players Sales Industries (***) Individuals and artisans[***]

The global vanilla value chain is complex, as many actors of different sizes are involved. While production is mainly carried out by small producers in poor countries (***), many specialized companies position themselves between small producers and exporters to secure the import of vanilla beans and their distribution. Companies specializing in brokering agricultural commodities, particularly vanilla, play an important intermediary role between exporters and industrial sectors.

Large agribusiness groups (***) are the largest consumers of Malagasy vanilla: about ** percent of production goes to the agribusiness sector. This is mainly due to the high use of vanilla in industrial confectionery, sweets, dairy products, and the use of vanilla in a growing number of specialized products, such as baby food and alcoholic beverages.

Nestlé, a leading global food company, has announced that only natural vanilla will be used in its ...

3.2 Vanilla production, the case of Madagascar

To better understand the vanilla production process, we will focus on the process in Madagascar, which produces ** percent of the world's vanilla[***]. In Madagascar, vanilla cultivation covers **,*** hectares of land and involves about ***,*** farmers, mostly on small family farms. Considering that vanilla plants are lianas and therefore need anchoring support to develop, three specific cultivation techniques can be distinguished, all of which are common in Madagascar.

The less intensive one consists of letting the plants grow in the wild, in the undergrowth, using tree trunks for support. Intercropping consists of growing vanilla along with other plants, such as sugarcane, which serve as support. Finally, intensive cultivation is grown in greenhouses with artificial supports.

In general, vanilla is planted by hand between September and November, and it takes three years before the first fruits are produced. The most important part of the growing process is the fertilization of the flower, which is done by hand. This is a crucial step, as vanilla flowers only survive for a few hours, so it is essential that growers take advantage of the right time for pollination to prevent the plant from not producing pods during this productive season.

At harvest, the fruit is odorless, while ...

3.3 The profile of market players

The following are some of the suppliers of the product in Italy

4.1 Type of supply and uses of the product

There are more than *** varieties of vanilla inthe world. However, three varieties of natural vanilla are commonly marketed, each distinguished by its characteristics and place of origin:

Vanillaplanifolia: this is the most popular variety on the market today, produced in Madagascar, Indonesia and Mexico. it is considered by many to be the variety with the best quality, particularly because of its high vanillin content. Vanillatahitiensis: this variety is grown mainly in the Pacific Ocean: French Polynesia, particularly on the island of Tahiti, but also in Papua New Guinea. It is distinguished from vanilla planifolia by its larger size (***). Vanillapompona: This is a variety that grows mainly in Guadeloupe, Martinique, Brazil, and Guyana. it is considered a lower quality vanilla than its cousins because its vanillin content is low.

These vanilla varieties are marketed under different names, each corresponding to the geographical area of production:

Vanillle Bourbon: a label created in **** to distinguish production from the Indian Ocean, and Madagascar in particular, from other varieties. This variety is highly prized by the French, who consume ** percent of vanilla under this label [***] Tahitian vanilla: a label that mainly designates the production of the vanilla tahitiensis variety. Vanillafrom Mexico: production of vanilla originating in ...

4.2 Analysis of prices charged in the market

In recent years, rising consumer prices for salt, spices and herbs, including vanilla, have marked an important shift in the economic landscape. As the spice sector faces a number of global challenges, including climate change, production costs and market dynamics, consumers have witnessed a marked increase in prices. From **** to ****, the consumer price index for these product categories rose by *.* points, with a baseline of *** in the year ****. Rising consumer prices for salt, spices and herbs pose a challenge for both consumers and producers. For the former, it results in higher cost of everyday consumer goods; for the latter, it requires constant adaptation to market fluctuations and changes in production conditions.

Consumer price index - salt, spices and herbs Italy, ****-****, base ****=*** Istat

5.1 Some regulatory aspects related to food flavorings

The following are the main regulations for the sector under analysis:

Regulation (***). Regulation (***) No. ****/**** covers flavorings and certain substances with flavoring properties used in and on food. This regulation defines rules for the use of these components, including natural and artificial flavorings, to ensure food safety and consumer protection by specifying labeling, composition and purity criteria.

Export rules in Madagascar

In general, in order to be exported, Madagascar Bourbon Vanilla must meet the following requirements:

It must be accompanied by a phytosanitary certificate and a customs form, knowing that the exporter will have to submit an invoice and proof of payment to the Malagasy customs, except for samples whose weight must not exceed *.* kg. All vanilla intended for export must be labeled, thus certifying that the vanilla exported was actually harvested in the same year. The opening of the export season varies from year to year, as the date is set by the government. The price of vanilla has been set at $*** FOB per kilogram from ****. The export of vacuum vanilla is strictly prohibited. Selling vanilla at too low or too high prices forces customs to subject exporters to a thorough questionnaire, as in the case of cheap vanilla, exporters are ...

6.1 A fragmented market

• Danone Groupe
• Unilever Groupe
• Eurovanille
• IFF International Flavours and Fragrances
• Varesco Trading