Health

Covid-19 Impact on Vanilla Market to reach US$ 810.8 million by 2028

The global vanilla market is estimated to be valued at US$ 510.2 million in 2018, and is expected to reach US$ 810.8 million by 2028, at a CAGR of 4.7% during 2018-2028

The global market for vanilla is estimated to grow at a CAGR of 4.7% by value and 4.6% by volume during the forecast period 2018-2028

Vanilla is a flavor majorly used in the food industry for bakery products, dairy products, beverages, and much more. Though, it also has a variety of uses in other industries like cosmetics and pharmaceutical. In food and beverages, vanilla is a well-known flavoring, relished all over the world. The most general type of vanilla is vanilla extract, which is arranged by transuding chopped vanilla beans in ethyl and water for around 2 days. The obtained mixture is then stored for a number of months, and then eventually filtered. There are quite a few varieties of vanilla that are available in the market, out of which, Madagascar vanilla is the most widely used in the vanilla market. The amusing sweet Madagascar vanilla takes up more than 70% of the vanilla market, whereas, the remaining types are vanilla from Tahiti and Mexico. The global vanilla market has experienced an incredible growth in recent years, and is expected to grow at a healthy CAGR of 4.6% in the years of forecast. The APAC region is expected to register the highest CAGR, due to progression in the retail division, with an increase in ready-to-eat food and packaged food consumption. Europe is also expected to witness robust growth in the vanilla market on account of the increasing presence of confectionary, biscuit and cookies, and cakes & pastry manufacturing divisions.

vanilla market

 

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Vanilla Market Segmentation:

  • By Origin
  • By Nature
  • By Form
  • By End Use 

APAC – the key region for global vanilla market revenue growth

The global Vanilla market is projected to perceive a stimulating growth imminent from the APAC market. In terms of value, the vanilla market in APAC is expected to grow at a CAGR of 6% over the forecast period, to reach a market value of US$ 204.6 Mn by 2028. APAC accounts for more than 21% of the total share of the global vanilla market in terms of revenue, which is expected to increase comprehensively by 2028 end. India is emerging as the leading grower of vanilla, owing to farming implemented broadly in the southern states of Tamil Nadu, Andhra Pradesh, Karnataka, and Kerala. Bourbon class vanilla beans with sweetened, aromatic, and nourishing flavors are developed and preserved for a treating period of 5-6 months in order to fulfil the ever-growing demand for vanilla from different sectors. The demand in Europe is strong as vanilla is a very widely-held and a resourceful ingredient for many applications.

Asia Pacific vanilla market – segment-wise overview

By form, the vanilla market is expected to witness the most input from the liquid segment. In terms of volume, the liquid vanilla segment holds the biggest share, and accounts for over 50% of the total APAC vanilla market, and is expected to continue to grow at a significant CAGR during the period of forecast.

In the APAC vanilla market, in the end-use segment, the food industry segment is assessed to dominate, and account for more than a whopping 60% value share by 2018 end, which is expected to decline slightly by 2028 end. The demand from bakery products such as breads, cakes and pastries, etc., is expected to fuel the vanilla market by a lucrative CAGR over the period of forecast. Moreover, in the Asian market, the liquid form of vanilla is the key target point of producers, owing to an increase in the usage of cakes and pastries, ready-to-eat food products, etc. Fluctuations in prices, limited supply, and poor farming & harvesting practices that harm the quality of beans are some of the factors restraining the growth of the vanilla market.

Manufacturers are aiming to develop new technologies that allow innovation in powder stability at a viable price. Moreover, sustainability and active supply chain management are some of the major distinguished tactics that are expected to be implemented by vendors present in the vanilla market.

North America is also a noteworthy regional vanilla market, which is anticipated to register a substantial growth trend among other regions in the global vanilla market during the forecast period. North America observed a significantly high demand, and is one of the hot prospects in the vanilla market.

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Vanilla Market to Limp Back to Growth amid Recovery in demand in Post-Pandemic World

Vanilla has been long been a crop of vast commercial significance worldwide, given the high popularity its flavor holds. Global production in the last few years has risen and also the pricing touched new highs, all of which reverberate the high potential of vanilla in the food industry. The high remunerative value of vanilla in agricultural markets has attracted farmers in several nations. Despite the astounding appetite vanilla has held among consumers all these years, the vanilla market has hit temporary snags during the COVID-19 pandemic in 2020. The pandemic ruptured various food supply chains, led down the closure of food retail chains, and resulted in huge decline in consumption. These trends were especially evident during the consecutive months in the second quarter after the pandemic hit the world. This has dampened the production activities, leading to decline in profit margins in the vanilla market. Along with the mounting price volatility triggered by COVID, labour shortages also temporarily put the brakes on the production of vanilla, thus acting as bottlenecks in the vanilla market.

In the last few months, the consumer sentiment in various industries are improving. Together with this, the demand for vanilla in various confectionary products is also expected to pick up pace. As a result, price stability is expected to spur new growth prospects in the vanilla market in the next few months. Further, countries that have been new entrants will also ramp their investment in vanilla production infrastructure. These new entrants will tread more cautiously in largely unstable scenario in the vanilla market. Major producers in the vanilla market will try to attain cost-effectiveness in production and extraction processes, to meet B2B consumer demands at new pricing points. This will also enable them to weather future price fluctuations on one hand and emerge as resilient markets in post-COVID era on the other hand.

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