Why Is Real Vanilla Extract So Expensive?

Vanilla. The name alone seems to breathe an air of luxury — and rightfully so, at least when it comes to the real deal. Pure vanilla can set you back anywhere between $600 to $800 per kilogram, making vanilla more expensive than silver and the second most expensive spice in the world after saffron. If you're feeling ecstatic after reading this because you scored a way cheaper deal on vanilla, sorry to break it to you but you probably ended up with an artificial version (we are all in the same boat). Here's a fun fact: Only a small fraction, less than 1 percent, of the global vanilla flavor market actually comes from real vanilla beans.

So what are we consuming? Vanilla gets its distinctive, sweet aroma from a compound called vanillin. Most commercial vanillin produced is synthetic, which means it doesn't come from vanilla beans but from other sources. These sources can be natural too, like corn, cloves, or rice bran. This is why it's easy to get confused when the labels say "derived from natural sources." But why is this the case, and why is real vanilla so expensive?

Around 80 percent of vanilla comes from Madagascar, but it's not native to the island country. Vanilla originated in the forests of Mexico and Central America, home of the Melipona bee –- the only insect capable of pollinating vanilla flowers. In fact, during the early 20th century, Mexico was the world's leading producer of this regal spice. Thanks to a 12-year-old enslaved boy from the Reunion Islands (then Bourbon), Edmond Albius, who discovered hand pollination, vanilla production spread to Madagascar. So the next time Bourbon and vanilla come up together, you'll know why. Don't confuse it with the whiskey though, that's a story for a different time. 

The reason vanilla production flourished and continues to do so in Madagascar is that the country offers ideal weather conditions and enough forest cover to support the orchid vines. Besides, hand-pollination is a labor-intensive method and labor wages in Madagascar remain shockingly low. Though vanilla has always been expensive, another factor that contributed to its sky-high prices today is Cyclone Enawo, which devastated two of Madagascar's largest vanilla-producing regions (Antalaha and Sambava) and wiped out 30 percent of the crop in 2017.

Well, it depends on how you're planning to use it. Imitation vanilla can work well in baked goods like cookies or cakes, where the main goal is to infuse sweetness and aroma. That aroma, as noted earlier, comes from vanillin, which is widely available and far cheaper than pure vanilla. Though pure vanilla offers more depth of flavor, it doesn't make a significant difference in these confections. But, vanillin is just one of the hundreds of flavor compounds present in pure vanilla extract, and its all of those compounds combined that give pure vanilla its more nuanced flavor. Pure vanilla can be anything from woodsy to oaky, depending on the soil and climate of the region it's coming from.

However, if you're using it to create no-bake desserts like custards or (genuinely not boring) vanilla ice cream, it's best to opt for the pure version. This is because the difference in taste between real and imitation vanilla is more pronounced in low-heat desserts as well as in uncooked recipes like eggnog. This is because real vanilla extract, by law, contains at least 35 percent alcohol, which intensifies the flavor. However, the alcohol's impact fades when cooked. So, when weighing the pros and cons, the best option depends on the context — and your budget.