Mexico’s underground vanilla economy
thehustle.co
thehustle.co
After talking with the stallholder, he told me that he had come from the Cook Islands on behalf of a government trade delegation hoping to promote their vanilla. Interestingly, nobody there farms it but they have an abundance growing wild - enough that they were hoping to establish an industry.
And later: “In Mexico, the majority of businesses are small, informal, and off the books.”
It’s a tragic catch-22 of developing nations that governments are inept and corrupt for lack of funds. While distrust of government and rampant tax avoidance cause systemic underfunding.
I don’t think it’s accurate to say Mexican governments are underfunded—they have oil money, from the nationalized oil industry, to the extent that they are extremely chilled out about tax collection.
It’s not that they are underfunded, but the criminal gangs (drugs, extortion, etc) are absurdly overfunded. Strong organized crime weakens and delegitimizes the government, which means that weaker, petty crime can also thrive. Like if you are sick with something big, small infections are more likely to opportunistically take advantage of your weak immune system.
Aside from organized crime, there is something else that is hard to articulate. It’s hard to explain exactly what it is, but to a large extent it feels like the population at large can’t agree who are the good guys and who are the bad guys, I.e. in many cases they will not unambiguously say that the drug cartels are bad and the government is good. They’re probably right about that, in many cases the two are inextricably enmeshed. It’s a vicious spiral that is hard to break, expectations of crime and corruption lead to more crime and corruption, but in many cases people won’t even agree that the gangsters are unambiguously bad. Sometimes the baddies get lionized to an unhelpful extent, and there are even ballads “narcocorridos” written about their exploits
Not only this, they are "overarmed" with military grade weapons thanks to the USA's insane gun laws. The saying of (former president/dictator) Porfirio Diaz, "Poor Mexico: so far from God and so close to the United States" rings just as true today, if not more so.
>to a large extent it feels like the population at large can’t agree who are the good guys and who are the bad guys
As if this is any different in the US, where film and music have also lionized the "baddies" for well over a hundred years!
the huge amount of funding of organized crime is a direct consequence of imperialistic war on drugs. "a matter of national health??" ahahahah, just think about the american health system for a minute.....
Agreed. IMHO, we all could benefit from some critical thinking when watching movies or TV series: that someone is the main character, doesn't automatically make them "the good guy", and they shouldn't be emulated even if you love binge-watching their antics.
just like during all the 19th and a bit of the 20th century USA immigration was dominated by Irish, Italian, and other europeans. Mexican's have been the largest source of immigrants into the USA... and this is also as an aside of parts of USA which were part of mexico at one point (Texas, etc..)
as a mexican I'm aware that the biggest drug cartel in the country is the same thing as the government. this is specially true at lower levels of government; but then I went on to learn that the biggest drug cartel in a worldwide level are actually the american government, I understand this may be impossible to accept for a few people.
as a mexican from veracruz, I KNOW as far as I can know (meaning I don't know, but I guess) that the state's executive was controlled by the zetas cartel (first decade of the 2000s)
final tidbit: the technical name of Mexico is "United States of Mexico" (in spanish, clearly)
This is probably a bad habit to get into, both from the government-enforcement side and the public-acceptable side of things.
If you're not particularly worried about sales/income tax revenues, then perhaps have a low rate, but I would think building up an infrastructure for it would be useful in case the situation changes down the road.
Hot take but I blame the early 2000s Drug War for this - not because of the economics of drugs, but because this meant the Mexican govt couldn't co-opt Organized Crime into the political system.
Looking at countries like Taiwan [0], South Korea [1], Japan [2], and Italy [3], when they were at a similar stage as Mexico in the early 2000s (1980s, 1990s, 1970s, 1980s respectively) these countries co-opted Organized Crime into the economic system by cracking down on certain black market industries (eg. Drugs) while allow them to operate in other grey market industries (eg. Construction, Real Estate, Loan Sharking, Commodities, Sex Work) or operate abroad (eg. In VN/PH/TH/Mainland for Asian gangs and South America+Eastern Europe for the Mafia).
Organized crime is morally reprehensible, but Mexico in the 2000s was not in the position to combat them. Co-option would have saved thousands of lives, and given an easier off ramp out of Drug industry into other high value sectors (which cartels have started to break into), which would have allowed them to legitimize or at least have less of an incentive to pursue a de facto insurgency.
[0] - https://journals.openedition.org/chinaperspectives/563
[1] - https://www.refworld.org/docid/45f1476234.html
[2] - https://academic.oup.com/book/37281/chapter-abstract/3308936...
[3] - http://www.inquiriesjournal.com/articles/292/italian-politic...
source: I'm Mexican,
I would say this about the entire country, not just one state. I would blame this on imperialism, but I already did.
however if you have money, you can buy your justice, selling drugs gives one money...
How are countries like germany, france or canada up there? I thought vanilla was more of a tropical plant? Or does this include artificial vanilla as well?
And I find it hard to believe, given that Coca-Cola uses real vanilla and is so widely consumed.
Surely more than 1% of people's overall vanilla consumption is in Coca-Cola?
Or I wonder if the ratio is vastly different worldwide vs. in the US?
Different regions use different ingredients for Coke, so I guess it’s possible this is true in your region, but my coke can in California doesn’t appear to list Vanilla in its ingredients.
Additionally, there was this lawsuit about Vanilla Orange Coke containining vanillin, which leads me to think it’s unlikely there’s much Vanilla Bean involved in non-Vanilla Coke, at least:
https://www.classaction.org/news/fake-vanilla-coca-cola-comp...
With that said, numbers like 99% of vanilla being from vanillin does sound like a made up statistic.
Just anecdotal or course, a sample of one and all that. :)
If Coke (or Coke Vanilla even) would cobtain real vanilla, they'd advertise it for sure. I don't remember anything like that
Two thins: Its up to the local bottler whether to use Cane Sugar or beet sugar or Vanilla or Vanillin. Mexican coke uses both Cane sugar and Vanilla.
A bar coke from a canister usually had the syrup a bit heavy so you can taste the difference much easier.
That's what was trying to say by using the "average" qualifier though.
I doubt there's much economic incentive to use real vanilla in 99% of the world / Coca-Cola's market.
With the different types of sugar, it's easier for me to imagine a company doing this for economic reasons.
There are some very old articles on the web from when Vanilla Coke was introduced, that they had been draining European markets for vanilla pods, ostensively. Sounds like astroturfing to me honestly. There's also a clas action lawsuit about missing real vanilla :D
In Mantikas v. Kellogg Co. (2018) [1], the 2nd Circuit allowed a false-advertising class-action suit to proceed against Cheez-Its labeled 'Made with Whole Grain' that only had 8g of whole grain in a 29g serving, whose primary ingredient was white flour.
The opinion explicitly rejects the situation you describe:
> Such a rule would permit Defendant to lead consumers to believe its Cheez-Its were made of whole grain so long as the crackers contained an iota of whole grain, along with 99.999% white flour. Such a rule would validate highly deceptive marketing.
When New Coke was introduced in 1985, it replaced the vanilla with vanillin, and the Madagascar economy crashed since that's where the vanilla comes from. Then when Coke Classic was (re-)introduced, it brought back the real vanilla and the Madagascar economy recovered. At least that's the story that keeps being repeated -- my understanding is that Coca-Cola won't officially confirm/deny since they keep all their flavorings secret. (It's not like I work for Coke or anything.)
Just google "new coke vanilla madagascar" and you'll find where it all comes from.
Do you have a source, perhaps from the Madagascar government?
I googled your phrase and all I got was a bunch of urban myth style blogspam all linking back to a single WSJ article from 1985.
> New Coke was introduced on April 23, 1985. Production of the original formulation ended later that week.
Madagascar’s GDP grew from 3.9 to 4.3 billion between 1984 and 1986 well after Coca Cola would have stopped buying vanilla beans. There was a significant “collapse” to 3.2 billion in 1987 but that followed a 1986 Structural Adjustment Program with the IMF that called for significant budget cuts, liberalization, and austerity. The time line just doesn’t line up. As far as I can tell the commodity woes that struck Madagascar in the mid 1980s had to do with coffee, not vanilla.
So the answer is no, I don’t find glorified 1980s just-so blogspam in the WSJ to be credible just because it’s got recognizable initials like “WSJ”. It doesn’t even pass basic sanity checks.
Coca Cola literally reintroduced the original formula less than three months later. They had zero to little impact on Madagascar’s economy in that time frame.
In either case, your original “smell test” comment really glosses over the 3% decline in GDP the year New Coke was introduced followed by a 14% increase the year following old Coke’s reintroduction. I’d say that passes the smell test, but isn’t definitive evidence that there was a noticeable impact from Coke.
+770 million => -100 million.
Coca Cola’s revenue fell from 8.67 billion in 1986 to 7.65 billion in 1987. In that time frame Madagascar’s GDP rose from 3.8 to 4.3 billion.
-1 billion => +0.5 billion.
There is no correlation. It doesn’t pass any smell test.
Also consider another thing: the revenue of Coke was multiple times that of the GDP of the entire country of Madagascar. Is it really surprising that this demand shock could occur?
No, crazygringo's claim was that the economy crashed:
> When New Coke was introduced in 1985, it replaced the vanilla with vanillin, and the Madagascar economy crashed since that's where the vanilla comes from.
I’d like to point out that we already have evidence this happened. The WSJ reported on it at the time, and the WSJ is a credible institution. In this thread, we have someone rejecting this event using cherry picked data to fit their narrative, but their interpretation doesn’t hold up under scrutiny. Not to appeal to authority too much, but given the choice between a write up in the WSJ or some random commenter’s “smell test” decades later, I’m going with WSJ.
I looked at the product sheet ov vanilla coke in France, where it is a legal obligation to list how much of the ingredients mentioned on the packaging are present, and vanilla isn't mentioned at all, only "vanilla flavor" (most likely artificial vanillin). So it is very likely that not a single pod is involved in the manufacturing of the drink. At least in France, and considering the price of vanilla, probably in the rest of the world as well.
When considering exports, vanillin probably doesn't count since it is not vanilla.
It looks more like a simple data processing, like grabbing any "vanilla beans" trades, adding the "outs" and subtracting the "ins"
If you look at other sources you'll find stuff like:
> In 2021, Germany imported 695 tonnes of vanilla, worth €83 million, and exported 245 tonnes, resulting in a net consumption of 450 tonnes.
https://www.cbi.eu/market-information/spices-herbs/vanilla/m...
But I thought Mexico was one of the few places in the world that had natural vanilla pollinators?
It has to be quite an undertaking to harvest 15 acres of tiny pods by hand in the middle of the night without the landowner noticing...
Besides, if theft really was a huge problem and the goods really that valuable, you'd just leave someone to sleep in a tent in the middle of the fields during the critical harvest time.
Something smells fishy about this story...
Yeah, i mean we all should accept everything written in every article with no critical thinking whatsoever.
You choose to interpret the comment as arogant. I choose to interpret it that they see an obvious solution which is neither mentioned nor implemented and thus they have questions about what they are missing. Clearly if what one sees as obvious is not done then one is likely missing something important.
But that is the question: why can’t a single person guard the crop?
The answer to that question would reveal more about the shape of the problem.
Is it because the single guard won’t even see and hear when the illegal harvesters get to work? (That is to say harvesting is so quick and silent that the guard would be none the wiser?)
Is it because the guard would see the harvest but would be overwhelmed by the illegal harvesters?
Yes. Agreed. It seems we are on the same page on this.
Where we seem to disagree is what follows from this observation. You call it arogance to share one’s thoughts and questions, i call it curiosity.
If we all just sit on our backside and think “hmm, clearly setting guards should work, yet the article doesn’t even mention it, there might be something I’m missing”, then we all will die not knowing any more. If someone asks it we might learn from the answers.
« you'd just leave someone to sleep in a tent in the middle of the fields during the critical harvest time. »
The word "just" is doing a lot of work here.
> you'd just leave someone to sleep in a tent in the middle of the fields during the critical harvest time
That depends on many factors. Mainly on how long the harvest interval. If there are only a few days from the day it is first possibly worth harvesting to the optimal day that benefits this strategy. The longer the interval the costlier the strategy.
Other thing which can affect the viability is the likelihood that your guard can do something about the theft. If the guard is alone in the woods with no way to call for help then what good is it to have a guard?
I didn't live there, but I knew people that lived there, so don't take the numbers too seriously. But I know that it was a problem.
Sadly a lot of crimes cause many times the damage than what the criminal gets. Smash a big shop window to grab a few items and run. Or around here in the Central Valley, poke a hole in a fuel tank and fill up a canister (which you can sell), then walk away while the rest of the fuel, possibly hundreds of gallons, drains out into the ground, poisoning the farmland on which it stands.
They leave some guy behind who is supposed to watch, but guess who was late/sick/whatever that night?
https://www.vanillabeankings.com/blogs/recipes/vanilla-bean-...
I might even have read about it originally from here.
Of course that only helps if they're recovered / identified quickly - once any significant amount of co-mingling happens then it's probably too much effort to track down the origin.
step 1: wage a war of disinformation of vanilla "vanilla is getting the kids high" step 2: end up making it illegal, of course, vanilla will keep coming step 3: declare war on vanilla because of reasons step 4: profit!
punchline step: replace vanilla with marijuana, or other native south American plants (cocaine).