Garrett McBride: Hey, there. Welcome to Get the Scoop with Smirk’s Podcast, where bulk ingredient conversation happens. We’re sharing our knowledge and expertise as bulk ingredient importers, tapping into the latest trends we are seeing and commenting on what that means for natural food businesses as they approach ingredient purchasing, product development, and marketing. You’ll hear the latest market reports, ingredient specifications, and product applications from Smirk’s in-house experts, as well as origin stories from our growers and processors around the world. Listen in for the scoop on what’s happening with bulk ingredients.
Nick Erker: Welcome back to Get the Scoop with Smirk’s. I’m Nick Erker, President of Smirk’s. And today, my co-host is Zach Schwindt, a Smirk’s trader, and our resident vanilla expert. Zach is also a customer of Smirk’s and uses our Smirk’s vanilla products In his retail brand, Origin Vanilla. Today, we’re excited to share some insights into vanilla exploring the history, production, processes, origins, and trends of this fascinating ingredient. Zach, it’s great to have you here today on Get the Scoop with Smirk’s.
Zach Schwindt: Thanks, Nick. Yeah. It’s great to be here. I’m excited to talk about all things vanilla. And with the holiday seasons coming up, I think it’s the perfect time to highlight this versatile ingredient.
Nick Erker: You know, I’m just blown away by the size of the global vanilla market. According to the Globe Newswire report, it reports that worldwide vanilla market is valued to be $1,430,000,000 in 2021 and is projected to hit 1,900,000,000 by 2028.
Zach Schwindt: Yeah. It’s a market with high growth trajectory. North America is largest user of vanilla globally, with the Asia Pacific region being the fastest-growing in terms of vanilla consumption. And France is the largest consumer of natural vanilla in Europe, so.
Nick Erker: Awesome. You know, you’ve got a lot of knowledge in vanilla. Would you mind a little bit about the history of vanilla with us today?
Zach Schwindt: Yeah. I mean, in terms of the history, it was first discovered growing in Mexico, which is actually the only place in the world where vanilla orchids can be pollinated by bees naturally. Most vanilla in the world is actually hand-pollinated with a wooden tool. So it’s kind of a rare thing for vanilla to be pollinated by a bee. Vanilla first departed Mexico in early 1500s on ships bound for Spain. It was originally believed to have been only a perfume at the time, and it wasn’t until Tell Cortez arrived in 1519 that the Spaniards learned it was also a flavoring agent. It was then brought to Madagascar for commercial production when the country remains the largest producer by volume today.
Nick Erker: So coming from Fort Morgan, I mean, we’re nowhere close to vanilla. There’s no trees or bees or anything like that close to us that would facilitate that. So how did you first get involved with vanilla?
Zach Schwindt: Yeah. It was during a solo backpacking trip through Asia that I met a group of vanilla farmers in West Java, Indonesia, specifically in the village of Cianjur and at the time I had been teaching English as a volunteer, and on the weekends I’d go out to the countryside mostly explore coffee farms in the region. I was very interested in coffee during that time, and I found vanilla beans growing alongside coffee and cloves, cacao, and. That was the 1st time I actually saw vanilla growing, you know, in the wild, and I had no idea that these green beans that were growing on a vine were vanilla beans, you know? I purchased a few kilograms from the farmers and bought it in cash and took it back home on the airplane. And when I got home, I started making vanilla extract in very small batches. You know, and kinda decided to go all in on the idea. Started a brand called Origin Vanilla. You know, I went back to Indonesia and met several other farmer groups in different islands, you know, Java, Sulawesi, Sumatra. I spent time with them during the entire process from pollination to curing and everything in between. And that’s what led me to get into the vanilla industry.
Nick Erker: That’s pretty cool. Indonesia is quite an interesting place. We actually source a lot of products out of Indonesia and, I can’t remember how many islands there are. Do you remember how many islands makeup Indonesia?
Zach Schwindt: Many 1,000. That’s all I know. There’s a lot of islands, so.
Nick Erker: Yeah. Man, that’s cool. So, you know, I was thinking back to how we first met, and we were chatting about it again this morning, and my son Cedar, who’s now 8 was only about 6 months old and I was going to daycare with your grandma. She was watching kids at the time and when I’d go to pick up Cedar, you know, I was hoping for like 5 minutes, Hey, good to see you. You know, thank you. And they usually turn into like a 30 minute conversation with her and she loved sharing stories about you and seeing about the different work that we did. And then we’d pass each other, you know, and you’d be out there shoveling snow or something, but little did we know that, our paths would cross again in This regard, but as we got through that, you know, Donny, years later, Donny and I we’re looking at a newspaper article that was written about you actually. And it was talking about a young man from Fort Morgan who started his own vanilla brand called Origin Vanilla and that was based around your travels and the experience you just described. So, after that we’d reached out to you and set up a meeting and soon after, I offered you a position here at Smirk’s, and you joined our team back in June of 2020 and have been a great asset to the company since then. So We’ve learned a lot of things together.
Zach Schwindt: Yeah. Back when I was shoveling snow, I didn’t realize it would turn into this. But I’m grateful we crossed paths and it’s been an incredible journey since day 1, so.
Nick Erker: Around here, we love to say that everybody’s job has other duties as assigned. And lots of times I end up with the snow shoveling. But if you want to relive those days, I’d be glad to let you help out with snow shoveling later this year.
Zach Schwindt: Appreciate the offer, Nick.
Nick Erker: No problem. It’s the least I could do, Zach.
Zach Schwindt: Yes, sir.
Nick Erker: You know, what did you learn though about the harvesting and processing when, you were working with vanilla farmers? So it seems like there’s quite a bit of things that go into that.
Zach Schwindt: Yeah. I mean, vanilla is anything but simple. Farmers, from the time you plant the vanilla, it takes up to 3 years before you actually start to see vanilla orchids growing on the trees, or sorry, the vines. So that’s a long time to wait from the time you plant a seed. And vanilla typically grows up other trees like cacao or cloves. Coconut trees is also a big one. Our Indonesian supplier now is launching a vanilla program, you know, and they’re gonna be growing the vanilla up their coconut trees actually. Vanilla’s rarely a stand-alone crop and usually grows best in harmony with other crops in a larger ecosystem.
Once vanilla orchids blossom, farmers have roughly an 8 to 12-hour window where they need to hand pollinate the vanilla orchid with either a toothpick or some sort of paper clip or sharp stick that they can manually pollinate the orchid. Once pollinated, they wait another 9 months before the curing process starts. And this is the process that basically turns the green vanilla beans into black vanilla beans that everyone knows and loves. So when curing, farmers will blanch the beans in boiling water for roughly 2 to 3 minutes, and then they’ll put the beans in a crate to begin a process called sweating. And this is a very important process, and everything has to be timed very, you know, to the minute in order to be successful. Once the sweating process is done, they open a crate after about 2 weeks of sweating, and they lay out the vanilla beans under the sun on tarps to reduce moisture according to specification. Once moisture content is acceptable, the vanilla beans are graded according to length.
Nick Erker: That is quite a, quite a lengthy process there. And, Smirk’s, we’d always kinda done a little bit of vanilla and been getting bigger in the vanilla. And then when you joined the team, I think that, you know, that really, really helped accelerate our involvement in vanilla to the levels that we’re working with today, but, you know, what really made you decide to launch your own brand along those lines and where do you sell the Origin vanilla that you get with Smirk’s?
Zach Schwindt: Yeah, I started Origin in 2019 and the concept was to bring the farmer closer to the consumer in such a traditionally outdated supply chain. Traditionally, the farmer would sell to someone else who cures it. That guy would sell to someone else who exports it, and traditionally there’s just too many people involved in the supply chain. So the whole idea was to bring you know, to kind of consolidate everything and effectively lower prices for the consumer and pay farmers more. But I mainly sell my vanilla at farmers markets, you know, in Boulder, Denver, Chocolate festivals, wine festivals, different events throughout Colorado, and I also sell quite a bit on my website as well. So, we’re stocked in a few local grocery stores as well here in Colorado and a few on the West Coast. But through it all, I’ve learned a lot Talking directly to consumers about their preferences also discovered a lot of the different beliefs and misconceptions people have about vanilla as well.
Nick Erker: So what what would you say is the biggest misconception around vanilla and what makes some of the vanilla that Smirk’s supplies a good fit for Origin and our customers?
Zach Schwindt: Yeah. I think one misconception is that a certain geographical location is better than the other. I mean, It really just depends on when the beans were harvested, were they ripe, how were they cured. I mean, don’t get me wrong, growing regions do play a part in quality, But it’s really the technical side of the processing and curing that determines the quality of the flavor. So Smirk’s research investigates all the supply chains that lead to the products that We sell and ensures that all of our customers, you know, origin vanilla included, have the best quality vanilla available.
Nick Erker: Very interesting, Zach. Very interesting. Generally speaking, what are the main origins of vanilla? The geographical regions that the vanilla comes from?
Zach Schwindt: Yeah. The biggest origin by far is Madagascar. They grow over 3 quarters of the global supply. You know, it’s like 10% of their GDP, it’s a big deal in Madagascar. You know, there’s countries like Uganda, Indonesia, and Papua New Guinea, who also hold a significant share of the global market, but they’re secondary players. And countries like India, Ecuador, Mexico, and Malaysia were also growing vanilla, but they’re not really, they don’t really account for a large share of the global market.
Nick Erker: Yeah. And when you and I first started talking about that, I found that very interesting because, you know, it seems like whenever anyone here in the office takes a vacation to Mexico. Our coworkers always say, hey, bring back some Mexican vanilla, but it’s not really a widely marketed one. I thought that it would be a bigger deal than it is.
Zach Schwindt: Yeah. I mean, when you think of Mexican vanilla, you do find it in the shops in Cancun and that kind of thing. But in terms of food safety and whatnot, there is not a lot of vanilla with a lot of you know, there’s not a lot of processors down there that have appropriate food safety documentation that would be required by Smirk’s, so.
Nick Erker: Yeah. So we got to pay attention to make sure everybody has a good quality product in the supply chain.
Zach Schwindt: Right.
Nick Erker: So during the holidays, what are the most popular uses for vanilla?
Zach Schwindt: I mean, people love making their own vanilla extract. You know, that’s very common. Creme brulee is something people love to make with vanilla. A lot of people make their own beer at home, you know, use vanilla beans and stouts and that kind of thing.
You know, oftentimes pastry chefs will buy vanilla beans so they can cut the bean, slice it open down the middle, and scrape out the vanilla seeds inside, which are packed full of flavor. It’s also known as vanilla caviar, those little seeds, so.
Nick Erker: And to think I only use it for French toast.
Zach Schwindt: You’re missing out. There’s a lot you could be doing with it. I mean.
Nick Erker: Yeah. Got to expand my horizons.
Zach Schwindt: Just got to find an excuse to use it, man. It’s almost always appropriate.
Nick Erker: Nice. Yeah. So what new and emerging trends and products are you seeing that are incorporating vanilla?
Zach Schwindt: I mean, there’s breweries all around the country that are using vanilla. There’s certain companies that are using vanilla and olive oils. I’ve seen vanilla in marinades, which is something kind of interesting, you know, taking a more savory approach to it. Candle companies, we’re using vanilla extract, soap companies. It’s also being used more in snacks and trail mixes, protein bars, You know, several categories, whether it’s the liquid, the powder, people are using vanilla in almost everything.
Nick Erker: Wow. That’s great there. There’s definitely some interesting innovations happening around Vanilla, and it’s great hearing your insights and, you know, really jealous and admire your adventurous entrepreneurial spirit. And, being just 20 years old going off to Indonesia and backpacking to the woods by yourself to learn about vanilla and starting your own thing, and coming here to share your knowledge and excitement with us. So, if our listeners want some high-quality vanillas at home for the for the holiday projects you can check out Zach’s website. What’s your website there, Zach?
Zach Schwindt: Yeah, it’s just originvanilla.com.
Nick Erker: Fantastic.
Zach Schwindt: Yeah. Appreciate it, Nick. I mean, vanilla really is my passion. I’m grateful to be doing what I love on a daily basis, so.
Nick Erker: Perfect. We’re happy to have you on board here at Smirk’s, helping to educate and guide our customers on the best most cost-effective bulk vanilla products used for their specific applications. And at Smirk’s, we see the vanilla category continuing to grow. We look forward to working with more customers to explore the many ways that vanilla can be used in your product lines and why Smirk’s should be the source for your vanilla. If our listeners have any questions, please reach out to us by email at whatsnew@smirks.com. We look forward to hearing from you.
Vanilla Product Feature
Nick Erker: Welcome to Get the Scoop with Smirk’s Product feature on Vanilla. Zach Schwindt, one of our Smurfs traders and resident vanilla specialist is here with me today and we’re going to do a deep dive into some fun facts about vanilla, some specifications that Smirk’s offers, and applications for vanilla to discuss the vanilla harvest, and also contracting for vanilla. So, Zach, to start it off, do you have any fun facts about vanilla that you’d like to share?
Zach Schwindt: Well, Nick, I do. I can’t help myself. I love vanilla trivia. So, here’s a few. Vanilla is the only orchid that produces an edible fruit, and yes, vanilla is actually a fruit. Vanilla is the 2nd most expensive spice in the world behind only saffron. Did you ever notice a funky design on your vanilla bean? Farmers in Madagascar are known to tattoo their vanilla beans with their initials to prevent theft, this is usually done with a toothpick or or a small stick or something where they can carve out their initials to basically tell other people, Hey, this is my vanilla bean.
Nick Erker: I’ve actually never seen that on a bean. Have you seen here in the States where you buy some and see?
Zach Schwindt: I have. It’s actually pretty interesting if you look at it because you can kind of see where the farmers will kind of they’ll go in and they’ll just put 2 letters kind of and something you know, at first, you kinda think it’s like a defect or something, but when you look into it a little bit further, you can kinda see, wow, you know, those are actually initials, so
Nick Erker: Tattooing each bean with a toothpick, that’s got to be pretty laborious. Yeah. That’s probably how it gets to be the most expensive behind saffron all the time to take tattoo and their initials on there.
Zach Schwindt: Yeah. And I mean, not to mention, you know, at the vanilla farms, usually, there’s someone there, you know, 24/7, sometimes with an armed, you know, a gun or something just to prevent theft because it’s such a big issue in Madagascar.
Nick Erker: Wow. You got some other facts, though?
Zach Schwindt: Yeah. I do. Vanilla remains, hands down, the most popular ice cream flavor in the USA. At times, vanilla can be more expensive than silver by weight, usually when there’s a shortage caused by weather patterns, which will usually happen a few times per decade. Nearly all of the vanilla beans worldwide are hand-pollinated. The only bee that pollinates vanilla orchids is the Melipona bee, as we mentioned, and it’s only found in Central America.
Nick Erker: What’s different about this bee? How come they’re only there? What you’d think that it’s a flower, so wouldn’t more bees just be attracted to it?
Zach Schwindt: Yeah, I mean, it’s native to Mexico, and that’s actually where vanilla was first discovered. So it does make sense in that regard. But they don’t exist in Madagascar, and they’ve tried to actually take the bees from Mexico to Madagascar and just weren’t successful. And they found it’s just more of a, you have more success having someone go out there and hand pollinate it because when the orchid opens for 8 to 12 hours, there’s a small chance the bee’s actually gonna come pollinate it. So having a human aspect creates a little bit more of a, you know, a safe haven in terms of making sure that it’s pollinated.
Nick Erker: So Zach, we spent a lot of time today talking about our natural vanilla, the beans, the powders, the extracts. You know, one thing that we see fairly common in people’s households is imitation vanilla. What about that? Is that something that people should be looking at when they’re looking for vanilla flavoring in their products, is imitation vanilla a good substitute?
Zach Schwindt: You know, Nick, I wouldn’t really suggest imitation vanilla. It’s not a clean product. I mean, it’s effectively, a product that comes from a beaver’s butt, from the castor glands, you know, close to the beaver’s butt. And the FDA says castoreum in food is generally safe, but the agency permits it in use and products under the label of imitation vanilla. So if you’re looking for a natural product, I wouldn’t suggest it.
Nick Erker: That sounds natural, but I don’t think that that’s the kind of natural that most of our customers are going for. I think that the offerings that we have with the vanilla bean is a lot better.
Zach Schwindt: Stick to the beans. Leave the beavers alone. Stick to the beans.
Nick Erker: Exactly. Oh, man. That sounds great. Well, glad that we cleared that up, because I know that that’s something that I get asked a lot as well. I got this imitation vanilla. Let’s just use that. So next time I’ll say no caster.
Zach Schwindt: Yeah, yeah. I mean, it’s also probably worth mentioning that, actual vanilla beans have over 300 individual flavor compounds, whereas imitation has 1, you know, it’s Vanillin and that’s basically 1 out of 300 flavor compounds. So in natural vanilla, you’re gonna have a ton more flavor.
Nick Erker: So a lot more depths to it to really help bring out those different, different things that you might be trying to highlight or note in a product. That’s all good information. I’m glad that we could let people know a little bit more about that today.
Zach Schwindt: Yeah. Good to clear that out.
Nick Erker: Well, thanks for those fun facts. I think next time when I’m putting some trivia questions together, I’m going to make sure to throw those in the mix.
Zach Schwindt: Yeah.
Nick Erker: Yeah. As we continue to talk about this and dive in deeper here into vanilla, why is vanilla consumption on the rise? What’s driving that?
Zach Schwindt: Yeah, I mean, vanilla is used as an ingredient in a variety of ways. In the food industry, big uses are industrial chocolate makers. Of course, ice cream companies, you know, beverage companies, you know, and snack companies, that kinda thing. Cosmetic manufacturers also use natural vanilla, whether it’s extract or powders. And I think the trend towards more healthy eating has prompted a greater number of people to, you know, seek out natural vanilla and push, you know, some companies towards using natural vanilla instead of artificial in their products.
Nick Erker: So, you talked about several different kinds of vanilla there. So, what are the various specifications of vanilla that we offer here at Smirx and the different applications for them?
Zach Schwindt: Yeah. I mean, there’s 3 categories, you know, that we break our vanilla offerings into. The first one is powders. So powders, you know, the first one would be like a vanilla extract powder, which is white. It’s good for coffee creamers, something that you need solubility. The second would be an exhausted vanilla bean. It’s basically the vanilla powder that’s already been extracted, so there’s really not any flavor in the product. It’s more for an appearance. It doesn’t clump either, so it’s good for ice cream companies.
Nick Erker: Is that what those specs are in vanilla ice cream?
Zach Schwindt: Yes. So if you have vanilla ice cream and you’re looking at those little specs, those are typically exhausted vanilla beans, and then they’ll flavor it with extract.
Nick Erker: I thought that actually made it taste different. I guess I was fooled. They’ll fool you. Yeah.
Zach Schwindt: And then 3rd powder that we offer is the whole vanilla bean ground into powder. So it’s just a fresh ground vanilla bean. It’s a low-moisture product. It’s dirty mesh powder. It’s good for chocolates, granolas. It can be used for both flavor and appearance. It’s also using some cosmetics. There’s some bath bomb companies who have approached us for it, so kind of a diverse ingredient in that in that regard. In the liquid category, sorry.
Nick Erker: Yeah. No. So, I was gonna ask, so we’ve talked about the powders. What else do we offer in the form of vanilla?
Zach Schwindt: Yeah. I mean, liquids would be the other big category, which is typically vanilla extract. And there’s several different types of vanilla extracts, and they can be broken down by origins. So, you know, some people like to market their ice cream Madagascar vanilla ice cream, then we’d sell them a Madagascar vanilla extract. Same thing goes with Ugandan, Indonesian,you know, Papua New Guinea, so the single origin vanilla extracts, and then there’s also different folds of vanilla, which is basically the strength. So, FDA is basically the one who sets the standard for the formulas of the extracts. So single fold is the most common and when you go to the grocery store, that’s what you’re gonna buy is a single fold. So the formula of that is 13 and 1/2 ounces per gallon of liquid, which is 128 fluid ounces, and that liquid must be 35% alcohol minimum.
So single fold is basically the most common vanilla. It’s used by most food companies. It’s the lowest cost as well. Double fold is basically twice as strong in terms of the flavor, so there’s 27 ounces per gallon of liquid. Uses for double fold would be, you know, something like ice cream, stuff like frosting, where maybe you don’t want too much liquid and you’re sensitive to liquids. Beverage companies as well will use double full just because you can add less overall liquid with basically twice the flavor. So it’s not double the price typically, but it can be a great value for the right application.
Nick Erker: This is twice the strength.
Zach Schwindt: Exactly. You’re getting twice as much vanilla flavor in the same amount of liquid. And the folds go all the way up to 10 fold, which is typically used for perfumes and essential oils, that kind of thing. And the 3rd category of vanilla is the whole vanilla bean, And these can be broken down by different grades. So the first would be gourmet grade, which is also known as grade A. This is long, moist, very beautiful vanilla beans, kind of what you’re looking for when you go and go to the grocery store and try to find a vanilla bean. These are good for making creme brulee, making Kahlua, making chocolates. If you’re looking for the vanilla caviar on the inside, you definitely want to go with a gourmet grade.
Nick Erker: So, how would you go about making a Kahlua? Have you done that yourself?
Zach Schwindt: You know, Nick, I actually haven’t done that myself, but when I’m selling vanilla at the farmer’s markets when someone comes and tries to buy a vanilla bean from me, I always ask, what are you doing with your vanilla bean and Kahlua seems to be very common. So, it seems to be very common around the holidays too.
Nick Erker: You know, we do, some occasional craft nights around the office. Maybe, we should have our own Kahlua making one of these things. I like that. That sounds like a good craft night.
Zach Schwindt: I’ll I’ll be, the taste tester.Yeah. But the 2nd grade of vanilla would be extract grade. So these typically have some minor defects, maybe they’re not perfectly uniform in shape, and they’re good for making extracts, you know, kind of like as the name suggests, or grinding into vanilla bean powder. And then there’s chopped vanilla beans, which some breweries like their beans already chopped because it’s easy for them to throw into their percolators or whatever they’re doing. So, chopped vanilla beans is actually one of the more common items that we sell here at Smirk’s as well.
Nick Erker: So, with all these different origins, as you know, you’ve talked about a lot of different origins that produce the different beans here, Is there a seasonality to vanilla in a time when people should be thinking about maybe purchasing or contracting vanilla? And when does it harvest it?
Zach Schwindt: I mean, since it varies a bit by origin, I can touch on the harvest for some of the major vanilla origins. Madagascar, the world’s largest vanilla producer, typically harvests starts in July, August with the curing and September timeframe and shipments will start coming out October. Madagascar product is much more regulated in the industry, since it accounts for about 10% of Madagascar’s GDP, so the government will set rules of when you can harvest, when you start curing, when you export, it’s all very controlled, and that’s pretty much done just to keep Madagascar’s name as the premium vanilla producer of the world. Indonesia and Papua New Guinea, 2 other major players. Harvest typically will start in August, September, with shipments coming out in October as well. Indonesia is a bit less regulated, so farmers occasionally can harvest our beans a bit prematurely, which can lead to some off flavors. So it’s extremely important to make sure you have suppliers who you can trust and that you ensure the product is mature when it’s harvested.
Nick Erker: What kind of off-flavor would, an immature bean produce?
Zach Schwindt: You’ll find notes of sourness.
Nick Erker: Okay.
Zach Schwindt: Typically when you smell vanilla, it’s that bold, rich flavor that you just wanna keep on smelling. And when you smell of premature bean, you’ll have some notes of sort of some sourness and, just notes that you don’t want, so. In Sulawesi, you know, which is an island in Northern Indonesia on the Northern Hemisphere, they have a different harvest cycle. So they, you know, they start harvesting in April, May, and then shipments will start coming out in July usually.
Nick Erker: Very cool. Thanks for enlightening us on that. So it seems like most of it is going to be harvested in the summertime for the northern hemisphere. So with that in mind, when is the best time to contract vanilla if people are looking to contract vanilla to get the best pricing?
Zach Schwindt: Yeah, I think the best time to contract would be the fall since that’s when Madagascar’s crop is coming Now, this is when buyers will have the best understanding of what the global market looks like. So I would say fall September, August is the best time to be contracting.
Nick Erker: So, what are you seeing right now for the 2023 harvest as we go into 24? We’re kind of past the harvest here, but what were the supplies like this year?
Zach Schwindt: In general, there’s a lot of oversupply in the market right now. Everyone is pretty well stocked. It seems farmers are having a bit of a hard time selling their crop. It’s a very sharp contrast to 2017 when prices were $300, $400 a kilo. You know, it takes 3 years for vanilla beans to mature, so it’s a long wait and things can change relatively fast. If there’s a, you know, a typhoon in Madagascar, prices can shoot up $100 a kilo in a month, you know, that kind of thing. But overall, it’s a good time to add vanilla to your product line because prices are relatively flat and America loves vanilla.
Nick Erker: This has been very informative, Zach. I’d really appreciate you educating us today about vanilla. And You know, I think, we could probably spend a lot more time talking about this in different applications and, you know, I’m really looking forward to our Kahlua craft night here. But, you know, I think that that that about wraps up our product feature today on vanilla. And if you’re looking for innovation with vanilla or just need to secure your needs, Smirk’s is here to explore different options to help you get samples, specifications, and the best pricing available. We can discuss what will work best for you and a particular application. So please reach out to us at whatsnew@smirks.com if you have any questions about our vanilla or any of our other ingredients. Thank you very much for taking the time to listen to our podcast and we look forward to seeing you next time on Get the Scoop with Smirk’s.
November Market Report
Donny Edson: Here is the Get the Scoop with Smirk’s November market report. To begin with, I think we need to chat about what’s going on in Panama as this is affecting shipment times. The Panama Canal is limiting the amounts of ships each day through the canal and making the ships lighter to get them through the canal. Some containers are being offloaded and railed across. Other vessels are being limited on the weight they can allow through. We’re continuously seeing anywhere from 2 to 4 week delays in the canal. This is a result of a lack of rain there and the canal being low and not having enough water to be full to be able to have the heavier ships on there. So, this is something we’re watching very closely as it is affecting the shipment times.
In regards to commodities and markets, one word that really sticks out is stable. A lot of markets are very stable at the moment and we are seeing prices maintain the same levels for several weeks in a row. There are a couple of exceptions that we’ll talk about, but overall, things feel very good at the moment without too many concerns. To begin with sunflower, sunflower is showing stability globally and prices remain stable and are much less than they were a couple years ago. The USA and Bulgaria both have products readily available to ship. Organic has also stabilized and shows no signs of going up at the moment. Sunflower oil remains very stable at the moment too.
In Paraguay, chia has remained stable as well as the rush of new crop shipments have found their way out of the country. The only real issues have been transit times to the West Coast because of the Panama Canal. The crop was very good and growing conditions were very good in Paraguay this year and we anticipate prices remaining where they are for at least the next 2 to 3 months with maybe a little movement one way or the other, but nothing major. Even though the crop in Paraguay was between 50 and 55,000 metric tons, they’re still shipping anywhere from 6 to 8,000 metric tons per month, so we could see things get tight at the end of the crop if the shipment numbers continue. However, it does feel as though the market is getting caught up and sap demand has slowed down inside the US.
From Indonesia, coconut sugar shipments have caught up and things are normalizing somewhat there, although they are still battling dry conditions which have been going on longer than usual. One thing to keep in mind is that Ramadan is a little earlier this year going from March 10th through April 8th. During Ramadan, Indonesia goes offline and it’s important to keep this in mind for your needs for the end of Q1 and into Q2. Remember that last year coming out of Ramadan is when El Nino really started to affect the quality of the sap made the slowdown on the sugar that we’re just catching up from now.
In regards to coconut, the market’s quite stable at the moment. Although suppliers desperately need prices to increase to be profitable in producing coconut. In the Philippines, some packers are booked into February as customers are booking out as far as possible to take advantage of the good prices. Other suppliers in the Philippines are able to offer shipments still in 2023. Vietnam has been shipping quite a bit of product into China, and that’s helped maintain a higher price there that makes them not as competitive in the US. Indonesia has been the most aggressive price origin for shipments from November through February 2024. Overall, we do not expect any major changes in the coconut market and we still encourage customers to book out as far as possible to take advantage of these prices.
A few areas of concern mostly pertain to South America. 1st off is organic mango. We’re right in the beginning of the new crop harvest for organic mango. El Nino has really been wreaking havoc on the new crop in Peru this year. Raw material prices have gone up considerably and the prices continue to increase on organic mango. This is 1 item we are still bullish on right now as there’s a true issue with the raw material used to make the product. Keep in mind that Mexico’s harvest won’t come on until May or June of next year. Smirk’s has limited stock on the East Coast and good stock on the West Coast. However, once we sell out, we will not get any more product in until April.
Another area item from South America that’s been tough this year has been organic quinoa. Prices continue to remain firm on this item, although we’ve seen a little backing off the highs that the market hit a few weeks ago. The crop shortage in Peru was real and prices kept creeping up for several weeks. We’re seeing prices from origin trading anywhere from 30 to 40% higher than a few months ago. It’s also important to note that there’s very little organic quinoa available from Peru now as many suppliers are getting positive pesticide hits on the product. Although the prices have been very high, demand is still not been as high for this product in the USA as most of the major customers had already had themselves covered on this. However, spot pricing will maintain high levels. If you’re not covered, it’s recommended to buy what you need until new crop. Don’t overbook. Just keep buying spot as you need it until we have a good idea of how things are gonna look for the new crop this year.
One other ancient grain that we’re watching really closely is organic amaranth. India, for the most part, has ran out of organic amaranth this year, and this has caused people to turn to South America. The demand for South American product has in turn increased the price from this region. India’s new harvest is in April, so we will not see product arriving into the US until June or July at the soonest. Importers are getting very low on stock, and this again is adding pressure to the South American market. We do recommend getting coverage on the books through July on this item.
In regards to tree nuts, again, stable is pretty good word for them. At the moment, cashews remain very stable, new crops not far off and there have been no indications that prices will have a dramatic swing one way or another. We only see the markets move around 2 to 3% up, down, or stay right where they’re at right now. Organic walnuts are trading about 10% higher than they were last year. Farmers and processors needed more money to keep afloat. They’re still trading at very good levels, but they are not as low as they were last year. Also, the crop this year has a lot of light product, which is good. Last year, we had the sunburn on the product when it got too hot before harvest. So we do see the quality going to be good this year as the new crop starts come in.
Macadamias have rebounded from the lows that we saw last year and many major origins have been able to sell out or get a good position sold on their nuts. Kenya still has a lot of product to offer though, and we still see reasonable pricing from this area. On the organic side, macadamia nuts, we are seeing limited offers on broken grades such as style 4 and style 6. A lot more offers on bigger grades like style 1s and style 2s. We do think that the broken grades will remain tight until the new crop comes in February March when they start to process new crop.
From China, pumpkin seeds. After a few weeks of volatility, the markets maintain the same pricing for the last 3 weeks. Although the prices anywhere from 8 to 10% higher than the lows we saw earlier in the season, they are stable. The strongest increase in risk still lies in organic product.
The organic crop was hurt by weather during harvest and was already a smaller crop. We do anticipate organic to remain a bit more volatile than the conventional this year. And that concludes our November market report for Get the Scoop with Smirk’s.
Garrett McBride: So that’s it for this episode of Get the Scoop with Smirk’s podcast, where we bring you the latest market reports, insights into bulk ingredients and their origins, as well as in-depth product information. So if you have any questions, feedback, or just want a sample to taste for yourself, visit the smirks.com website or email us at whatsnew@smirks.com. Never miss a future episode. Be sure to hit the subscribe button wherever you listen to your podcast. Thanks so much for tuning in.