Vanilla Market Forecast 2023 - 2030

By Product Type :

The product type segment is categorized into Madagascar vanilla, Mexican Vanilla, Tahitian vanilla, and others. In 2022, the Madagascar vanilla segment accounted for the highest market share of 38.95% in the overall vanilla market and is expected to grow at the fastest CAGR over the forecast period. Madagascar vanilla is also termed bourbon vanilla which originated from Madagascar region and has superior flavor and aromatic qualities as compared to other segments. Such type of vanilla has higher concentrations of vanillin that help to deliver rich, dark, and creamy flavors. Additionally, Madagascar vanilla is well suited for various baking recipes, drinks, and desserts which is a key factor contributing to the segment dominance.

For instance, according to the statistics published in Tridge, the Sava region is the largest vanilla-producing area worldwide, with an estimated 70,000 smallholder farmers producing 80-90% of Madagascar or Bourbon vanilla on around 25,000 hectares of land. Approximately 10% of Madagascar's GDP comes from the vanilla industry which is the key factor boosting the segment growth.

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By Type :

The type segment is divided into organic and conventional. In 2022, the conventional segment accounted for the highest market share in the vanilla market as farming vanilla beans by conventional means is cheaper and less cost-intensive as compared to the organic segment. The increasing consumer demand for vanilla products due to their pleasant flavor and the growing use of vanilla extracts in various industries such as pharmaceuticals and food & beverage is driving the segment growth.

However, the organic segment is expected to grow at the fastest CAGR over the forecast period owing to growing consumer preferences towards the consumption of natural food products and flavors. Organic vanilla is free from synthetic pesticides, fertilizers, and herbicides. Further, the key market players are engaging in research and development activities to cater to the rising consumer demand for organically grown natural flavoring products.

For instance, in December 2021, Advanced Biotech introduced Abtvanforall plus natural, a bio-vanillin used in frozen dairy, alcoholic beverages, and baked goods. Hence, the introduction of such types of products is anticipated to drive the segment growth.

By Form :

The form segment is categorized into powder, liquid, and others. In 2022, the liquid accounted for the largest market share in the vanilla market and is anticipated to grow at the fastest CAGR over the forecast period. The liquid form involves vanilla extract which is a popular flavor additive used in culinary preparations and has a longer shelf life and stability as compared to other forms. Liquid vanilla is widely used in both sweet and savory dishes including baked goods, desserts, beverages, and sauces. Further, many key players are involved in the development of new vanilla extracts to cater to the growing demand of end-users.

For instance, Nielsen-Massey Vanillas introduced two new single-origin pure vanilla extracts from Uganda and Indonesia for a wide variety of baking and cooking applications. Hence, the availability of such a wide range of vanilla extracts is a crucial factor contributing to segment dominance.

By End-Use Industry :

The end-use industry segment is classified into food & beverages, pharmaceutical, cosmetics & personal care, and others. In 2022, the food and beverage segment accounted for the highest market share in the vanilla market due to the widespread use of vanilla extract as a flavoring agent in dairy products, baked goods, beverages, and confections. Vanillin or vanilla flavors are extensively used in many alcoholic beverages such as cocktails, whiskeys, and cordials to enhance the taste of the drinks. Further, vanilla-flavored foaming creamers are widely commercialized in the market due to their growing use as coffee or tea additive to create a creamy and foamy texture.

For instance, Larid Superfood, a superfood products manufacturer company introduced the launch of Vanilla Superfood Creamer. The product is produced using Madagascar bourbon vanilla, creamy coconut, cinnamon, and maple sugar. Hence, the introduction of such types of new products by the key players aids in expanding the growth of the vanilla market.

However, the cosmetics & personal care segment is anticipated to grow at the fastest CAGR over the forecast period. Vanilla extracts contain specific antioxidants that help to heal damaged skin and reduce wrinkles and provide a soothing fragrance. Further, the vanilla fragrance has a calming effect and plays a crucial role in reducing startle reflexes, and also provides relief from sleep apnea. Hence, the increasing use of vanilla in cosmetics and personal care products due to the aforementioned properties is anticipated to boost market growth.

By Distribution Channel :

The distribution channel is divided into online and offline. In 2022, the offline segment accounted for the highest market share in the vanilla market as vanilla extracts or vanilla beans are available in a wide range of stores including hypermarket/supermarket, retail shops, specialty stores, and others. Customers exhibit a preference for physical product testing before the purchase of food products or food additives such as vanilla syrups and powders to inspect the product expiry date, manufacturing date, and others. Therefore, offline stores provide the opportunity to understand product composition, properties, and functionality, resulting in the growth of the offline segment.

However, the online segment is expected to emerge as the fastest-growing segment during the forecast period. The growth of this segment is attributed to the shift in customer behavior of shopping online through e-commerce websites and company-owned websites. Online sales channel provides an opportunity for customers to compare the prices of different products before purchasing. Furthermore, the facility of home delivery provided by online sales channels is contributing to the growth of the vanilla market. 

By Region :

The regional segment includes North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

In 2022, Asia Pacific accounted for the highest market share at 40.05% and was valued at USD 911.38 million, and is expected to reach USD 1,266.38 million in 2030. In Asia Pacific, China accounted for the highest market share of 33.35% during the base year 2022. The growth is attributed to the increasing development of the food & beverage industry particularly in India and China which requires the use of vanilla as a flavoring agent in various food products including cakes, cookies, pastries, ice creams, desserts, and other savory dishes. Hence, the above-mentioned factor is responsible for boosting the growth of the vanilla market in the region.

However, Europe is expected to grow at the fastest CAGR of 5.3% over the forecast period in the market owing to the increasing demand for natural products and the higher consumption of processed foods, such as chocolate, ice cream, and bakery products in the region.

Additionally, the European food and drink industry is one of the largest in the world. For instance, according to the data published in FoodDrinkEurope, in 2022, the food and drink industry of Europe generated a turnover of approximately USD 1.17 trillion. Hence, this increasing growth of the food and drinks sector is boosting the need for flavoring agents which is anticipated to drive the growth of the vanilla market over the forecast period.