Mexico’s Vanilla Trade Faces Extinction

Except for a bit of nostalgia, the economic world reacted with utter indifference late last year when a tropical storm wiped out half of Mexico’s vanilla crop.

Mexico once held a global monopoly in vanilla, the lusciously aromatic spice used in sweets and baked goods, and as recently as the 1930s controlled half the world market. But today, Mexico produces so few vanilla beans it is a “nonfactor,” a leading spice expert says.

Worse yet, what’s left of Mexican vanilla isn’t even very good, according to people who should know: Ben & Jerry’s Homemade.

“There may be some small pockets of Mexico producing good vanilla, but we haven’t been able to find it,” said Mary Kamm, head researcher for the South Burlington, Vt., ice cream maker and one of the nation’s top vanilla buyers. “Which is sad because beans came from there.”

Dozens of people died and about 1,000 farmers, many of them members of the indigenous Totonac community here, lost some or all of their vanilla crops when three days of flooding in October inundated this town and many outlying farms, wreaking devastation over hundreds of square miles.

“Everything is lost. There was no time to harvest what we had. It will take many years to build it back up,” said Noe San Juan, a Totonac who works at a local plantation.

But the floods were a mere coda to an ancient tale whose ending had already been foretold by such diverse and immutable forces as human avarice, the International Monetary Fund and the French. Mexican vanilla has been decimated by a series of reversals, natural and otherwise.

And efforts during the last two decades by the Mexican government, researchers and private spice purveyors, including U.S. giant McCormick & Co., to restore Mexican vanilla to its former glory have failed.

“Mexico is where vanilla originated,” said Craig Nielsen, vice president of Nielsen-Massey Vanillas Inc., a Waukegan, Ill.-based importer. “But the crop was off the world market by the late 1970s and is a nonfactor now.”

Yet Nielsen would disagree with those who disparage all Mexican vanilla. His firm is among the handful that buys vanilla from Gaya-Vanimex, a processing firm based here run by the same family for four generations.

Moreover, the quality of Mexican vanilla seems good enough for the scores of U.S. tourists who make a point of buying the flavoring at rock-bottom prices in border stores or at duty-free shops at Mexican airports.

The decline of Mexico’s vanilla crop is doubly frustrating because global demand for the spice has increased 50% in the last decade, mainly because of increased use in the United States by premium ice cream manufacturers Haagen-Dazs, Ben & Jerry’s and others.

That the spice survives at all here is due in large part to the Totonacs, who continue to grow it along with subsistence crops such as corn, beans and peppers.

The history of vanilla begins here in Veracruz state, where it was first cultivated by pre-Columbian peoples. In the 16th century, Spanish conquistadors brought vanilla to Europe where it quickly became popular among the wealthy in preparing chocolate.

The trouble started around 1800, when a French priest defied an export ban and smuggled a vanilla orchid out of Mexico to Tahiti. From there, vanilla cultivation expanded to Indonesia and to Madagascar and the Comores islands, both in the Indian Ocean.

The French perfected artificial pollination techniques that made large-scale vanilla cultivation possible in places such as Madagascar.

Vanilla is also an incidental victim of loggers who have stripped the Gulf of Mexico coast of irreplaceable coastal rain forests, said Alba Gonzalez Jacome, an ecologist at Iberoamericana University in Mexico City and author of “Agriculture and Society in Mexico.”

So to feed wealthy Europeans’ and Americans’ taste for fine cedar and mahogany, vanilla--a vining orchid--was robbed of its natural habitat.

When McCormick & Co. tried to revive the industry here in the late 1970s, “We found . . . such a change in climate because of the destruction of the rain forest that it could no longer be brought back to a place of prominence. So we gave up,” said Hank Kaestner, head of spice procurement at McCormick, based in Hunt Valley, Md.

Another blow to vanilla production here, ironically, is an improving regional economy, which has created better-paying jobs in newly developed citrus groves and oil fields. Rising wages have made the labor intensive vanilla crop increasingly noncompetitive globally.

The bean grows from an orchid flower that must be artificially pollinated, a painstaking process.

Even the IMF has taken its toll. In 1993, the international lending agency broke up the world’s leading vanilla cartel in Madagascar, boosting global competition and bringing prices down to all-time lows, where they still hover.

As a result, Mexico in 1998 accounted for only six of the 2,200 metric tons of dried vanilla beans sold internationally, less than 1% of exports. Madagascar supplies two-thirds of world demand.

Flood damage is expected to reduce the Mexican vanilla harvest by at least half this year. And because the orchid vines take three years to grow to fruit-bearing maturity, observers worry that farmers will simply abandon vanilla.

“We are already seeing it--no evidence of people beginning to reconstruct their plantations, even though the price is up,” said S. Jeffrey Wilkerson, director of the Institute for Cultural Ecology of the Tropics, a Harlingen, Texas-based group with a research station here funded by grants from the Smithsonian Institution and National Geographic Society.

Wilkerson’s institute tried to commercialize vanilla production here with a four-acre plantation but gave up after prices declined in the early 1990s, thanks to IMF intervention.

“We could not cover even minimal costs with the going prices,” said Wilkerson, an archeologist.

The research station also was devastated by the floods, losing all but 100 of its 5,000 orchids. Twenty years of research also headed out to sea when the adjoining Tecolutla River raged out of control.

Although McCormick & Co. is helping fund an experimental vanilla plantation in Chiapas state in southern Mexico, it has redirected its vanilla development efforts to Tonga in the South Pacific, Uganda and Indonesia.

“Mexico was considered the gold standard in vanilla 50 years ago,” Kaestner said. “But we’ve refocused on other parts of the world.”