April 6, 2012

2 Min Read
Nielsen Massey Offers Perspective on Reported Vanilla Shortage

WAUKEGAN, Ill.In response to a recent media report predicting a global shortage of vanilla beans, Nielsen-Massey Vanillas issued a statement debunking the chatter.

An article in The Telegraph stated that poor harvests in India and Mexico " has sent shock waves through the market leading to a surge in bulk sales of black vanilla from Madagascar amid fears of imminent price rises." The article said the trickle down effect will be higher ice cream prices. That prediction started its own set of shock waves, as several media outlets picked up on the story and warned consumers that prices for the frozen favorite will likely spike.

In its statement, Nielsen-Massey said it "does not anticipate any issue with supplies in the near future, and is not projecting near-term price increases.   As a result, producers of vanilla ice cream and other food products utilizing its pure vanilla extract should not be impacted by higher prices."   

 On average, Mexico and India combined produce approximately 100 tons of vanilla beans each year, or about five percent of the total worldwide harvest of 2,200 tons," said Craig Nielsen, chief executive officer of Nielsen-Massey Vanillas. The worlds leading vanilla producer, Madagascar, accounts for approximately 65 percent of the world crop and its crop yield was normal for 2012."

In response to The Telegraph's comment regarding the surge in bulk sales from Madagascar, Nielsen-Massey said: the larger shipments being made from Madagascar in the past few months are simply normal shipments of the new vanilla bean crop for vanilla bean suppliers and vanilla producers in the United States and Europe.

 We do not expect any significant price increases for our products in 2012 nor do we anticipate any near-term issues related to supply," said Nielsen. While those purchasing vanilla on the spot markets may experience slight price increases, the majority of food producers are insulated by virtue of long-term supply agreements. Consumers should not expect to encounter increases in finished products using vanilla extract.  In fact, vanilla bean prices remain at historically low levels and some price correction is expected in the years to come."

Nielsen commented that vanillas impact on finished goods prices remains minimal. Based on a normal usage rate of vanilla extract, a 10 percent increase in vanilla extract would only  increase the cost to produce a pint of ice cream by $0.0029, less than 3 one hundredths of a penny," he added.

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