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These farmers are arming themselves to stop thieves from stealing one of the world's most valuable spices. Vanilla. In its boom years, the average price of vanilla hit $300 per kilogram. For years, one country has dominated the industry. Madagascar. It has historically accounted for about 80% of the global vanilla supply. So, if anything threatens the country's harvest, prices will skyrocket even more. Like they did in 2017, when vanilla hit a record high of nearly $600 per kilo. But this country is offering an alternative. In just 5 years, Uganda has become the second largest vanilla exporter by volume. And if Uganda's production continues to
grow, it could lead to more affordable, stable prices. Now, big brands like Ben & Jerry's are even using Ugandan vanilla. So, how did vanilla become such an expensive spice? And can Uganda step in to help stabilize global prices? Madagascar may lead the vanilla market, but that hasn't always been the case. The spice's roots lie elsewhere. Grown on climbing orchid vines, vanilla is primarily native to Mexico and other Central and South American countries. For centuries, only the Totonacs cultivated vanilla, while neighboring indigenous groups like the Maya and Aztecs used it to flavor cacao drinks.
It was all made possible by native bees that pollinated the vanilla orchid. But all that changed in the 19th century, when Edmond Albius, a gardener born into slavery, devised a technique for pollinating the orchid by hand. Suddenly, those native bees weren't the only way to pollinate vanilla. As other countries began cultivating vanilla, Mexico lost its edge. That's where Madagascar comes in. With its humid rainforest conditions and space to scale, Madagascar was ideal for vanilla. By the 1920s, Madagascar had become the world's largest vanilla producer, a position it's held ever since. When Business Insider filmed in Madagascar in 2022, Razafinsalama, a vanilla farmer, showed us how he pollinates each flower
by hand. Vanilla orchids take two to five years to flower, but Razafinsalama has only a few hours to pollinate them before the flowers wither. After pollination, farmers have to wait another six to nine months before the flowers bear green vanilla pods, which happens only once a year in Madagascar. This labor-intensive, years-long process makes vanilla so pricey that it's earned the nickname green gold. Labor is just one factor. A single weather event can also shake global prices. In March 2017, Cyclone Enawo tore through Madagascar's vanilla region, damaging about 30% of the crop. At the time, prices were already around $500 a kilo.
Within months, vanilla surged to nearly $600 a kilo as the cyclone further tightened supply. And when global vanilla prices rise, so does the risk of theft. Farmers can spend their nights patrolling their fields, weapons in hand. The pressure to harvest crops before they're stolen can push some farmers to pick their beans too soon, resulting in lower quality vanilla. With poor quality beans at sky-high prices, demand for vanilla started to decline. In an effort to counteract this, Madagascar's government imposed a minimum export price of $250 per kilo in 2020. The policy didn't go as planned.
Buyers largely ignored the price floor since it didn't reflect actual market prices. Instead, some buyers switched to artificial vanilla, a much cheaper alternative. By the time Madagascar lifted the $250 price floor in 2023, the country was sitting on an oversupply of beans, and vanilla prices went into freefall. By 2024, the average export value had plummeted to roughly $50 per kilo. Given Madagascar's unpredictable supply, global buyers are looking to other countries for a dependable secondary source of vanilla. And Uganda in particular is stepping up to the plate.
For Ugandan vanilla, we are saying there's um an alternative source, and we want the alternative next source to be Uganda. In the global vanilla market, Uganda stands out because it's the only place in the world with two vanilla harvest seasons each year. That's thanks to its ideal climate and rainfall patterns. We have two seasons. We have the December-January, and we have June, July. In Uganda's Ibanda district, Thomas and his wife Madrid built their vanilla farm a few steps away from their home, so they can stay close in case thieves strike. Uh this is the farm. Uh we are sharing with the family. So my wife and even the children when they are not at school, they join us and we do weeding.
I started in 2015. Before I started, there was vanilla gardens in Ibanda with few farmers. We visited in March just as the rainy season was starting, which meant more upkeep for Thomas. He brings long vanilla vines down to the ground to keep them at a manageable height and to stimulate growth, a process called looping. When the rain is too high, you find the fungal diseases that dropping over the flowers. I'm looping uh because the rain has started. When I loop, the vines uh gain strength and move up and come back. Farmers like Thomas contend with the rain, but since Uganda is landlocked, it doesn't face the same cyclone threats as Madagascar.
Uganda is also right on the equator, which gives its vanilla beans a unique flavor profile. But to truly become an alternative to Madagascar's vanilla, it also has to deliver on quality. Uganda's government, vanilla industry, and researchers are working together to improve quality through science. And the US Department of Agriculture has invested $13 million into the industry. Prossy leads the Association of Vanilla Exporters of Uganda Limited, or VANEX, a trade group shaping the quality and global reach of Ugandan vanilla.
Using various scientific methods, Vanex and Makerere University conduct maturity surveys to determine the optimal time to harvest vanilla. Once the maturity period is determined, we make sure we do the declaration of the harvest window that is declared by the Ministry of Agriculture. And in the last 5 years, this has proven to give us improvement in quality of Ugandan vanilla. These harvest dates are strictly enforced, and farmers who harvest too soon can face penalties, while thieves and buyers can be apprehended for buying or selling outside of those dates.
Since the introduction of official harvest windows in 2019, some farmers have seen reduced vanilla theft. I planted the beans, and it was uh picked away by thieves before it starting growing. But because of the connection and network, the thieves were arrested and they paid back the beans. For farmers like Thomas and Madrid, this removes the incentive to pick beans prematurely. Instead, they make sure they harvest only fully ripe vanilla pods. These are typically green. Do you see? But toward this harvesting, it turns turning to light green, light yellow. When it keeps moving to yellow, it means it is getting ready for harvesting.
But producing high-quality green beans is only half the equation. Quality control continues in the curing process. Israel Kaguiza, a vanilla processor, shows us the first step to curing, sorting the beans. This one, it's going under grade A. It's a premium grade because it's not busted, did not uh split anywhere. Next to the smooth premium beans are other beans, split open and streaked with black. They aren't defective. They're ideal for vanilla extract. Once sorted, the beans are thoroughly washed before undergoing something called the killing process, where they're submerged in hot water.
Getting the temperature and timing just right is crucial to avoid destroying the enzymes that give vanilla its flavor and aroma. Israel times the premium beans to the second, just 2 minutes in hot water. The beans are then placed straight into sacks, where they trap steam and sweat for a day. Next, the beans enter a cycle of sun exposure and sweating. These are the beans that have gone under curing. That have been exposed to the sun for 1 month and a half. As you see the beans, right now they are looking into a black color. To develop vanilla's aroma, the cured beans go through conditioning.
In this room alone, there are over 3,500 kilos of cured beans. Here, the beans rest and are cooled in boxes, which allows them to fully develop their natural oils. The best stage of vanilla, it could be around 4 months. Whenever the beans come to this level, they are ready for the world market. After processing, quality control continues in the lab. Here, technicians measure vanillin content, which is the main compound that gives vanilla its flavor and aroma. Reported vanillin levels in Ugandan vanilla typically average above 2%, with the best beans containing as much as 4%. That's right on par with, or sometimes higher than Madagascar's vanillin content, which typically ranges from 2 to 3%.
From there, the beans are packed and ready for export. Each kilo of premium grade of this premium grade can go to a hundred dollars. That is from the factory like us, a hundred dollars. Uh a hundred and twenty, a hundred and thirty. With all these efforts to maintain quality, Uganda is gaining traction in the global market. Whether it's Ben & Jerry's vanilla ice cream or some of the finest quality vanilla extracts, Ugandan beans are finding their way into products around the world. From Uganda, we crossed the Atlantic to the US, where Nielsen-Massey Vanillas
showed us how the spice moves from bean to bottle. Madagascar is the number one place that we source from. Um and Uganda would be the second. Jonathan JT Thompson is the CEO of Nielsen-Massey, a third-generation family business and one of the most recognized names in vanilla today. This is our Uganda extract. It's a fantastic because it's got a nice chocolatey note to it. To make the company's signature vanilla extracts, workers first check the beans for quality and then grind them for extraction.
A lot of our beans will come in bundles. Once they've cut their bundles off, they'll get transferred over to our grinding machines. And then once that's They're done the chopping, they'll get put into these transfer totes. Other ingredients will then be added and we'll start the extraction process. We went to Uganda first off because it is a very similar profile to Madagascar from just a sensorial organoleptic perspective. Organoleptic is a fancy way of saying how something looks, tastes, smells, and feels. But number two is actually a much more stable region to go to. Uh the government's a bit more stable. They've also brought in a lot more farmers into growing vanilla. And that's actually really attractive because in times where you have supply shocks or
um you have some adverse weather in say Madagascar, they're able to get by a little bit better. While the company sources beans from other countries, JT shares where Ugandan vanilla shines. I think every country that is really into uh vanilla has its merits for different flavor profiles, but I would say Uganda is one of the up-and-coming from a dessert perspective. But one of my favorites is actually ice cream. And whenever we do our internal taste test, Uganda seems to always come out on top along with Tahitian, even more than Madagascar.
4 oz of Nielsen-Massey's top-selling Madagascar bourbon vanilla extract costs around $19. That's 60% more expensive than the vanilla extract sold by McCormick, the world's largest spice company. Nielsen-Massey attributes its premium pricing to its focus on quality. What makes Nielsen-Massey's a bit more expensive is uh first off, we start with the highest quality, most premium beans. But number two, what really distinguishes us is we go through this cold extraction process versus a lot of other uh folks are going to use a hot extraction process. It's part of the special sauce that the Nielsen family developed over many, many years. The company's director of quality, Jonathan
Wall, showed us the cold extraction process, which can take weeks to complete. But for Nielsen-Massey, the slower, more tedious process is worth it. Hot extraction can you can lose some of the flavors. It's quicker. It's a cheaper way of doing it. But we uh we are more focused on quality. Investments from major vanilla players like Nielsen-Massey, combined with Uganda's own efforts, have put the country on the global vanilla map. It took just 5 years for Uganda to become the second largest vanilla exporter by volume after Madagascar.
The country's export quantity went from 30 metric tons in 2019 to over 600 metric tons in 2024. Despite Uganda's progress, the country still accounts for only about 10% of the US market and a smaller share in Europe. When it starts to get above 10%, which it is now, it's actually starting to provide a bit of a diversification and stabilizing function. So, the more that happens, the more stabilization we're going to see. One of its biggest hurdles, most of the world doesn't know that Uganda has quality vanilla. We have not come out to invest in marketing. We have not branded uh who we are. And in 2024, that's why we launched a branding and marketing campaign. While Ugandan beans have historically been cheaper than Madagascar's, those
patterns are starting to shift. Since 2022, Madagascar's vanilla prices have fallen faster than Uganda's, shrinking the price gap from $123 a kilo to just 15 in 2024. A lot of that comes down to the price of labor. It's just a little bit uh more uh affordable and cheaper labor when you get into Madagascar. But even with vanilla prices down, there may be a silver lining. What's really interesting is when prices are really low, what you typically see is they actually the quality of the bean goes up. With quality beans at lower prices, more buyers can afford to choose natural vanilla over synthetic, and
Uganda is ready to answer that call. I would like to inform the world that Uganda has everything that it takes to grow as much vanilla as possible. The future is bright because when you look at the projected global demand for natural vanilla, it is unmet. It is unmet, and this is the message that we give to our farmers. It is the message that we give to our members. The future of vanilla is in Uganda.
