A Conversation with Hervé Prime, CEO of Premium Goods:

In order to get a better grasp on the background experience and focus of Ambrosus’ partner Premium Goods, we had the opportunity to sit down with the company CEO, Hervé Prime to discuss the fine-detail behind the vanilla industry and his vision for Premium Goods.

Interviewer: Hello Hervé, it is a pleasure to be able to speak with you today about your passion, and previous experience in the vanilla industry.

Hervé Prime: I am glad to be here, and happy to discuss my experience in the vanilla industry.

Interviewer: To begin, would you explain to us a little bit about your background with vanilla, as a global commodity?

Hervé Prime: I have been working in the vanilla business since 1983. More specifically, my specialization was on the process of importing the vanilla beans, transforming them into extracts, and eventually into vanilla infused flavors of all sorts. Vanilla itself remains a specialty due to the fact that it is a raw material without possessing its own heavily regulated market.

It became clear about 10 years ago that “natural vanilla” was not merely a trend, but rather a deep and definitive evolution growing year after year. Especially in the last two decades the consumer has begun to “learn” about this magical raw material and the “exotic mystery” behind its genuinely wonderful taste. Even from the very beginning of my time in the industry, vanilla has been considered to be the most famous and well sold “taste” all over the world, and that concerns both its natural and artificial variants.

Interviewer: You have just recently started a brand new company exclusively focused on the sourcing and processing of vanilla — What is the vision behind Premium Goods?

Hervé Prime: Yes, so Premium Goods has been founded with the idea of mastering three extremely important parameters for the global vanilla industry: 1) sourcing — establishing where the vanilla comes from, 2) first transformation — perfecting how the vanilla is made into an extract from its original bean, and 3) demonstrating complete traceability, in every possible way, for all vanilla sold on the market.

Interviewer: In light of these focuses, and your time working with vanilla, what has been the biggest problem facing the vanilla industry over the past couple of decades?

Hervé Prime: Over the last couple of decades the average vanilla consumer or retailer has become a “connoisseur” for what quality and safe vanilla needs to be; they have increasingly demanding requirements for the vanilla they purchase. Based on this trend, the vanilla industry has had to master all of the essential parameters surrounding their product: guaranteeing its quality, the origin, providing traceability for the entire supply chain, and most recently proving that it has been sustainably sourced.

Overall, however, the main obstacle concerns the general stability of the vanilla market. From the moment vanilla is taken from the field, to when it reaches the consumer a number of variables still remain unregulated and frequently prone to change: the size of the crop, the varieties of quality, the influence of social or political problems (especially regulations), the overall cost of the produce, crime, fraud, corruption, and natural disasters.

In this sense, the market is not organized: it is a market that has been created from multiple, overlapping, and often time contradictory over-the-counter agreements. This is the recurrent economic reality for players in the global vanilla industry: each person involved must find a way to grow amidst these uncertainties.

Altogether, the real challenge is in continuously adapting strategies so that the consumers can always find and incorporate vanilla into the final products they love, and into the shelf spaces of the stores where people will buy them. At the end of the day, it should end with the consumer.

Interviewer: In your experience, where does the best vanilla in the world come from? Are there any particular reasons why?

Hervé Prime: The all-around leader for vanilla is Madagascar. In an international market not organized by a stock exchange, Madagascar, compared to other places that source vanilla, remains the best organized.

One of the main reasons why I think Madagascar has one of the best vanilla markets is due to the fact that they set some sort of price regulation alongside certain quality controls, which are then followed by all of the other vanilla producing countries.

In terms of quality, a shipment of vanilla beans can take up to a year and a half in order to prepare adequately from the farmer to the point where it is exported: both on the farm and in the refineries. In Madagascar, although there are some quality problems, it has consistently been the country with the best preparation methods that are also quite unique.

Interviewer: Is there any variety of vanilla beans, and on average, how far does a shipment of vanilla normally have to travel before it arrives at its end destination?

Hervé Prime: Yes, in general there are two main kinds of vanilla beans:

1. “Planifolia” vanilla beans, which make up over 90% of the market and is the preferred taste for consumers. Inside of this vanilla bean family there is a kind of appellation authorized only for Madagascar, Reunion Island, and Comoros known as “Bourbon” Vanilla.

2. “Tahitensis” vanilla beans which are much less popular and have a more distinct and strong taste.

Madagascar thus, not only produces the best vanilla in the world, but also the unique “Bourbon” grade which is what is almost exclusively harvested there.

In terms of the transportation of vanilla, I should mention that in general shipping vanilla has not been a problem: “packing lists” and documentation of shipments have been historically well organized. The only differentiator is that depending on the weight and value of the shipment it can either be sent via sea or air which sometimes affects how quickly it can reach the consumer.

Interviewer: Where then in the vanilla supply chain is there a need for better traceability and documentation?

Hervé Prime: The major problem in the vanilla supply chain is in the traceability of the vanilla bean stock within Madagascar and where it ends up once it has been shipped away. The process within Madagascar can be quite confusing as various farms sell their vanilla to a regional collector who then moves to different preparation facilities. Only after the vanilla has been prepared into its darker and dried out stock version can it then be transferred to all of the buyers outside of Madagascar. The need for traceability is in terms of guaranteeing that the shipments within Madagascar, are correctly and efficiently shipped around the world — to the USA, Europe, and the Asia Oceania region.

Interviewer: What kind of clients does Premium Goods provide Vanilla to? From such a perspective, would you say Vanilla can be used for a variety of purposes?

Hervé Prime: All of Premium Goods’ customers are located within the food industry, and more specifically in sweet foods and colorings, or in related areas: baby foods, liquors, energetic ‘sports’ products, and sometimes even for dieting. The main end products are normally for gourmet ice-cream, dairy products, and in chocolate, biscuits, and premixes.

Interviewer: More recently, what kind of troubles have occurred when it comes to the quality assurance of vanilla beans? Is there much counterfeiting?

Hervé Prime: The main trouble in the vanilla supply chain has always been inflation of prices followed by excessive speculation that can stem from a number of different sources: if there will be a small crop due to natural cycles, if multiple cyclones damaged the crop, or if there is a shortage in vanilla supply due to an increase in market demand.

In the event that there is a significant price increase especially in the context of high levels of demand, the quality suffers due to general hastiness in optimizing the profit: either the beans are delivered too early without ‘sufficient’ preparation as sellers try to make money soon, or they are kept in bad storage conditions for too long as sellers wait for higher market prices. This really strikes at the core of the issue which is a lack of ability to see which shipments have already made it to the market, and where other shipments end up in their place.

Interviewer: In light of the problems we have been discussing, why exactly does a solution like Ambrosus appeal to you, when it comes to tracing your vanilla?

Hervé Prime: The Ambrosus ecosystem is complete. What I mean is that with Ambrosus I can use it to organise the final phase of shipping the product from Madagascar to somewhere else around the world, while also, at the same time, I can use Ambrosus as a security tool that my clients can then use to demonstrate to consumers the quality of the product they use. Essentially the argument remains the same: demonstrating and guaranteeing the origin of a product and its journey, without deficiency is a very valuable service.

Interviewer: From your experience in the industry, do you think the need for transparency and quality assurance of products is something that other companies have a need for as well?

Hervé Prime: Definitely yes. The business model that Ambrosus is able to propose to companies is something new that many companies do not even imagine to be possible, much less incredibly cost effective. I should qualify that for many companies, vanilla is considered as its own specific macro and micro economy, therefore it is both a big concern and a small problem; a large business volume combined with a significant amount of diversity within the internal organization can make it difficult to quickly adopt new and innovative solutions.

Premium Goods has the advantage of being new, and thus we can gradually test and integrate with the Ambrosus solution, until after some time it can spread to being fully used and offered to all the other users in the network.

Interviewer: Thank you for your time Hervé, and we look forward to the growth of Premium Goods, with its all-natural ‘Bourbon’ vanilla.

Hervé Prime: Thank you for having me, and I am glad I could share some insights from my time in the vanilla industry.

Thanks to the detailed interview from Premium Goods CEO Hervé Prime a better explanation of the problem that Ambrosus sought to solve can be ascertained: vanilla in Madagascar — more specifically known as “Bourbon” vanilla — is the highest quality and most unique vanilla in the world. However, due to price fluctuations, shipments of vanilla in Madagascar are often times severely delayed or unnecessarily forced into the market in order to make maximal profits. Ambrosus, described by Hervé as a ‘complete solution’ is capable of changing the way the vanilla supply chain within Madagascar flows, to thereby allow a more transparent and honest movement of vanilla around the world. With such a solution, businesses benefit from sourcing the highest quality ‘Bourbon’ vanilla available, while consumers also benefit from the increased transparency in the vanilla supply chain.