In the last four years, three out of five major Chinese players, that all used the chemical route, ONCB, to produce vanillin, were forced to stop business, mostly due to environmental and economical pressures.
But in a bid to enter the burgeoning Chinese market that supplies about 40 per cent of the global vanillin market, the flavours arm of French chemicals firm Rhodia acquired Xuebao, a vanillin Chinese facility, in 2000 to create Ruohai Fine chemicals.
"Although a brand new unit, the plant we acquired was strongly threatened by the local authorities. The facility worked along the ONCB route," said Dominique Giannotta, global marketing and innovation manager for flavours and fragrances at Rhodia.
The world export market for natural vanilla is valued at around $422 million (€317 million) with nearly 50 per cent sourced from the leading producer country Madagascar. But poor weather conditions and political turmoil in Madagascar in recent years has sent the price for vanilla rocketing.
Between 1999 and 2003 annual growth in value for vanilla beans rose by 64 per cent, hitting 30 per cent between 2002 and 2003 alone and rising to $500 per kilo highs.
But as the most popular consumer flavour in the world demand for vanilla remains strong, putting constant pressure on already bullish prices and pushing food makers to seek out alternative versions of this flavour to use in food formulations that will satisfy the consumer palate.
One of the most common alternatives is vanillin, with strong global demand currently hovering between 12,000 to 15,000 mt a year. By comparison, total world demand for natural vanilla is about 3000 metric tons.
Synthetic vanillin costs one-hundredth of the price of the natural product and not only substitutes for vanilla but also supplements adulterated vanilla extracts.
According to Raman Gujral from the Federation of Indian Chambers of Commerce, synthetic vanillin accounts for more than 90 per cent of the US vanilla flavouring market and about 50 per cent of the French market (the lowest national share). One ounce of artificially produced vanillin has roughly the same flavouring power as a gallon of natural vanilla extract.
Today most non-Chinese vanillin producers use a chemical catechol route to produce vanillin as opposed to the Chinese players that have opted for the ONCB alternative.
"When Rhodia acquired Xuebao, that used the ONCB route, we decided to use our experience to compare the two different processes," Giannotta tells FoodNavigator.com.
Both routes kick off with the chemical benzene but the firm found that for 1 kilo of vanillin the ONCB process uses nearly three times as much benzene than the catechol route and generates nearly 1 kilo of various toxic wastes.
"The catechol route is far more efficient in terms of cost, toxicity and the environment," says Giannotta.
With benzene prices at record highs, savings on the quantities used will offer immediate gains. Chemical firm BASF told FoodNavigator.com that benzene prices are 'extremely high' at the moment on the back of bullish prices for petrol, the raw material from which the chemical is sourced. Currently about €950 per ton, benzene prices were about €400 a ton at the beginning of the year.
"Rhodia made it a top priority in its chinese plant to remove the benzene as a solvent to extract vanillin, and to switch from ex-ONCB guaiacol to ex-catechol guaiacol, key intermediate to obtain vanillin," adds Giannotta.
The vanillin grade developed by the firm in China is largely used for the local market whereas supplies from its facilities churned out by its Baton Rouge production units in the US serve the global market.