Madagascar Vanilla Ryan reflected on the decision to source the vanilla from Madagascar. It was hard to fault the logic. TSL knew customers might try a bar once if they saw them on the shelves and heard the story, but to keep people buying, and continue helping starving children, the bars had to be goodreally good. To ensure the quality, TSL tightly controlled its ingredients, using only suppliers that had trackable, proper documentation that the ingredients were non-GMO, project verified, gluten-free, Fair Trade Certified, and kosher. Though TSL subcontracts the actual production, it handles the ordering and labelling to maintain strict quality controls for what goes in its bars. TSL's insistence on only the best ingredients meant Ryan had spent a lot of time visiting potential suppliers searching for the best ingredients. For vanilla, there was really only one choice for the best natural vanillaMadagascar. Almost 80% of the world's natural vanilla fields are in Madagascar, and with good reason. The climate is perfect for growing vanilla beans and produces a high-quality bean, just what TSL was looking for. The vanilla was so good TSL included it in the name for the bars.

While Madagascar was the obvious choice for vanilla sourcing, TSL also wanted to make sure the vanilla was not just good but of the highest quality. The better suppliers had tighter quality-control processes, and TSL had selected a supplier that had consistently delivered a premium product when needed at a fair price for the quality level. That is, until now.

The email indicated the supplier would not be able to make the expected shipment on time, and also needed to increase the price almost 20% from the last order two months ago. In addition, the third price increase was the largest yet. Worse, there was a distinct possibility that there would be further increases. Consumers were increasingly demanding natural ingredients in their food, so companies were moving to change out artificial flavours for natural ingredients. Nestl, for example, had begun using natural vanilla instead of artificial flavouring in its Nestl Crunch bars. Meanwhile, a recent drought had reduced the available supply, which was compounded by the fact that it takes three years to produce vanilla beans, so it is difficult to increase the supply quickly. The situation resulted in a sharp increase in prices. In 2011, a pound of vanilla beans cost $11, but by the end of 2016, the same pound of beans cost $193. Given how valuable the beans had become, farmers were sometimes picking them prematurely to prevent them from being stolen, which made it even more difficult to get high-quality beans, because picking the beans too early damages their flavour. The only bright spot was that this year's crop looked promising, so most industry experts expected prices to eventually drop, though there was disagreement as to exactly when that would happen.

It was not a good situation for TSL. Sales and orders of bars were increasing, especially for the Madagascar Vanilla Almond & Honey, one of their best sellers. Starbucks had just expanded the number of stores TSL was sold in, but now it was possible TSL wouldn't be able to deliver. How would Starbucks react? Would it think the company couldn't meet demand and cut back its orders? How would Starbucks react if TSL filled the orders with one of the other bars instead? Ryan was also worried about how to handle TBSL's vanilla supply. Should he try to find another supplier? Should he order additional vanilla this time at the higher price just in case or try to wait until the price came down when the year's crop was harvested? He knew he would have to decide what to do by Monday before things got worse, so he dialled Ravi's number to discuss options.

How has the social/cultural environment benefited TSL and how has the social/cultural environment contributed to its current problem with vanilla supply?