Nova Scotia

Skyrocketing cost of vanilla 'really tough' for Halifax food industry

Severe weather, along with greed and the black market, has caused the price of vanilla to increase 500 per cent in the past year. That's causing hardship for Halifax's food industry.

Vanilla is one of the world's favourite flavours and it's becoming one of the most costly

The owner of Layers Cakes in Halifax says she's spending over $150 for this litre of pure vanilla extract. (Submitted by Jennifer Harrison)

It's one of the world's favourite flavours and it's becoming one of the most costly.

Jennifer Harrison, owner of Layers Cakes, uses Nielsen Massey pure vanilla extract and paste in just about all of her recipes. Like many bakers, ice-cream makers and grocery store owners, she started noticing a sharp increase in cost about a year ago. 

"It didn't just creep, like it went drastically up. It was from one order to the next," said Harrison.

A one-litre bottle of vanilla paste that cost about $30 rose to $80, then $125 and it's now hovering around $160, she said. That 500-per-cent jump was one of the reasons Harrison recently increased her prices for the first time since opening her shop five years ago.

"Bakery margins, they're tight so then when you go and do an increase like that, it's really tough," she said. 

Cyclones, greed and rising costs

The high cost of vanilla is being blamed on short supply. Last spring, cyclone Enawo tore through Madagascar, where about 80 per cent of the world's vanilla is grown. 

"What producers and suppliers had said was, 'You know what, it was a bad crop. It should improve.' Well, it hasn't improved yet. I don't know if it will, but we haven't seen any decrease," Harrison said. 

Layers Cakes uses vanilla in its vanilla buttercream cupcakes and just about every other recipe, says owner Jennifer Harrison. (Submitted by Jennifer Harrison)

But ask a former spice merchant in Halifax, and he'll tell you how greed, corruption and the black market are exacerbating the frenzy over one of the world's favourite flavours. 

"There's vicious cycles within vicious cycles," said Costas Halavrezos, who, until recently, was The Spiceman. 

"When something gets as overheated as this, there's another problem for the traditional, artisanal growers and curers of vanilla and that is theft."

It takes patience to grow vanilla, he said. In fact, it's a months-long process to turn the immature, green vanilla pods into the dark-brown beans that end up in cakes, soaps and drinks. 

For a long time, the spice was largely grown by small-scale producers in a few select areas of the world, but more people want in on the action and are producing lower-quality vanilla that's hurting the industry, said Halavrezos. 

Halavrezos said he often sold vanilla pods at the market to people interested in making their own extract.

One supplier in the vanilla industry has predicted sky-high prices could collapse soon. (Suto Norbert Zsolt/Shutterstock)

"If I was still in business today, I wouldn't be able to sell it because I don't think people would buy the vanilla beans at the price I would have to sell them at," he said. 

According to one of the world's largest vanilla suppliers, Aust & Hachmann, the industry is in full-on crisis. But while it's hard to predict, the company says prices could soon collapse.

In the meantime, Halavrezos expects more and more consumers and business owners to turn to the cheaper alternative: artificial vanilla extract. 

But Harrison said even if it means absorbing further price hikes, she's not giving up on the good stuff. 

"When you're dealing with pastry and cakes, I mean, pure vanilla extract, there's no substitute," she said. "So it's not as though there's another option for a lower price point. There was no question that we were just going to have to ride the storm."