Vanilla prices are giving scoop shops a giant ice-cream headache
The hottest days of summer have yet to arrive, but Boston’s ice cream shops are already sweating. The reason? A massive spike in vanilla prices that’s threatening to drive the cost of a cone into the stratosphere.
The source of the problem is the distant island nation of Madagascar, 8,500 miles from Boston, where a cyclone in March devastated the farms that supply more than 80 percent of the world’s vanilla beans. In the wake of the storm, some distributors have resorted to rationing supplies. For local scoop shops, it’s a giant ice-cream headache.
Aaron Cohen, the owner of Gracie’s Ice Cream in Somerville, used to buy vacuum-packed bags of beans for his vanilla ice cream at a rate of $72 a pound. He says that those same packs would now cost him $320, and that’s led him to scramble for alternatives. But even given the price spike, he’s hesitant to charge more for a cup or cone, or to list vanilla as a premium flavor.
“I just don’t think that anyone in Boston could get away with that without making people angry,” he said. “Vanilla is a euphemism for plain. They’d think it was a joke.”
It’s not just pure vanilla bean ice cream that’s at risk. Whether you consider vanilla subtle or sublime, it is an essential ingredient in dozens of gourmet ice cream flavors and baked goods. Prices for vanilla extract, which is made from beans, have more than doubled, a problem for bakers and anyone who relies on it as a baseline for flavor.
So Cohen and other vanilla-dependent entrepreneurs are tweaking recipes, searching for substitutes, or simply eating the cost.
“It’s really the difference between good-quality restaurants or poor-quality ones,” says Raymond Ford, the owner of Christina’s Homemade Ice Cream in Cambridge, which is absorbing the higher cost for retail customers.
But Ford’s wholesale business, which sells 2.5-gallon tubs of vanilla ice cream to area restaurants, has taken a huge hit. He said that to make a profit, he’d need to double his prices.
“It’s made [vanilla] ice cream a loss leader,” he said. “We’re losing money, and that’s a major problem.”
The roots of that problem can be found on the family-run farms of Madagascar, an island off the southeast coast of Africa.
“What’s quite extraordinary about vanilla is just how eye-wateringly labor intensive it is,” said William Masters, a professor at Tufts University’s Friedman School of Nutrition Science and Policy who focuses on the economics of food systems.
Vanilla beans are grown by some of the world’s poorest people, he said, and are a painstakingly difficult crop to cultivate — the pods grow on vine-like orchids that bloom only once a year, and farmers must pollinate the blossoms by hand (“They are literally human bees,” said Masters).
Once they’re picked, the pods are laid out in the sun to dry, which is when the flavor truly develops. Like coffee or cocoa, an ill-timed harvest or fickle weather pattern can affect the taste of the bean.
But unlike those commodities, vanilla is particularly vulnerable to price volatility, said Don Seville, the codirector of the Sustainable Food Lab, a Hartland, Vt.-based organization that has been working with businesses to promote sustainable growing practices in Madagascar.
“It’s a challenge when you have most of the world’s supply coming from one small place which is all very small-scale family farmers,” he said. A single storm, like the cyclone that took out 20 percent of the production area in March, can therefore play an outsize role in the market fluctuations.
“Any one of these storms can have a big enough impact to have global prices increase, and that’s pretty unusual,” he said. Demand for vanilla has grown modestly since 2013, he said, as more companies seek to ditch artificial flavors for more natural sources. But even that slow growth was enough to put farmers on edge, as they struggled to keep up. After the recent storm, price speculation among traders only accelerated, driving vanilla prices up higher than they’ve been for decades.
Because vanilla crops take three or four years to mature, farmers can’t respond quickly to changes in demand. Seville says that new crops have been planted, and that it will likely take two or three years before prices fall.
In the meantime, ice cream makers such as Gus Rancatore, the owner of Toscanini’s in Cambridge, are making do.
“It is very difficult to substitute for vanilla, and it appears in many places that would surprise people,” he said. “Chocolate ice cream gets some of its appeal from the balancing presence of vanilla, and we use vanilla in almost all of our flavors that feature inclusions, the technical term for cookies, candies, and such that ice cream makers use.”
He said his suppliers have placed limits on the amount of vanilla beans and extract he can purchase at one time. “You can’t stockpile it,” he said. “They’ve put quotas on people.”
But that hasn’t stopped some from trying. Vince Petryk, the owner of 13 J.P. Licks ice cream shops, has managed to procure more than 200 gallon jugs of Madagascar bourbon vanilla extract from of a variety of suppliers throughout the Northeast. He paid about $80 a gallon, or a 60 percent increase from years past, and is keeping them under lock and key in his warehouses.
“We cornered the market,” he said. “We use about 28 gallons per month in the summer time. We have enough for another year.”
The squeeze is also being felt by local bakers, who rely on vanilla for a depth of flavor that’s not easy to replicate. Joanne Chang, owner of the seven-store Flour Bakery chain in Boston, said the rising prices have forced her to re-evaluate her recipes. Two or three months ago, she said, they began decreasing the amount of vanilla in some baked goods by about 10 to 15 percent. “Enough to save us a little bit but not to impact the taste,” she said.
Then prices rose again.
“We were like, ‘Shoot, it’s really getting super expensive,’” she said. One of her purveyors had a huge supply of vanilla, so she bought thousands of dollars worth. And it has led her to search for places where she might be able to make up costs, like bumping up the prices of breakfast items.
“It’s such a part of everything that we do we can’t eliminate it,” she said.
Most ice cream shop owners said they’re taking a similar approach, waiting things out until high prices subside. They’re doing all they can so that customers won’t feel a pinch when they saunter up to the counter this summer.
“People don’t want to come in and get a $10 ice cream cone,” Rancatore said.