Vanilla is a complex blend of flavour and fragrance ingredients extracted from the seed pods of the vanilla orchid. The most important ingredient in this blend is vanillin. However, because of the cost and supply chain variability of natural vanilla, most products that want to impart the aroma of vanilla do not in fact use vanilla but rather synthetic vanillin (99% of all vanillin consumed worldwide) made primarily from petrochemicals or chemically derived from lignin.
Vanillin is mainly used as a flavouring agent, primarily in foods and beverages such as chocolate and dairy products, but also to mask unpleasant tastes in medicines or livestock fodder. It is also an intermediate in the manufacture of certain pharmaceuticals and agrochemicals.
Vanillin and vanilla extracts have an estimated annual total volume of 16,000 metric tonnes, worth some USD 650 million in total. Natural vanilla extract represents less than 1% by volume, though it is more important in terms of value. Sales prices range from about USD 1,500 per kg for natural vanilla extract to USD 10-20 per kg for synthetic vanillin.
The primary market opportunity is in providing a competitively priced product, with good aroma properties, made from a natural and sustainable source. Evolva believes such properties will allow fermentation-derived vanillin to be used in a wide variety of food and other products. Evolva does not believe that such a product will significantly replace vanilla obtained from the orchid.
Evolva partnered vanillin with International Flavors & Fragrances Inc. (IFF; New York, USA) in 2011. IFF paid Evolva upfront fees, research fees and one milestone payment. IFF has the exclusive right to commercialise vanillin resulting from the collaboration in certain market segments, whilst Evolva retains rights to other segments.
Vanillin was successfully brought to market in mid-2014, since when IFF has been responsible for commercialisation. Evolva is due milestone payments from IFF upon the achievement of certain sales volumes, as well as a share of IFF’s gross profits, paid in the form of royalties. Evolva will also potentially pursue aspects of vanillin that it has not partnered with IFF.
As with all Evolva’s products, it is hard to estimate the market potential of Evolva’s vanillin. However, Evolva estimates that the total addressable market for its vanillin amounts to some USD 500 million, although for most of this to be addressable, it will be necessary to further improve the manufacturing efficiency. This in turn should allow our vanillin to approach the current prices for synthetic vanillin, permitting a switch from synthetic vanillin to natural vanillin and providing a final product in line with consumer expectations.