How Climate and Logistics Disrupt Natural Spice Supply Chains

Global Supply Chain Challenges in Natural Spices and Extracts

The industry for natural spices and extracts is in one of its most volatile times. Supply chain pressures from continuous climate effects, logistics challenges, a labor shortage, and mounting sustainability regulations are adjusting procuring strategies globally, in major markets. With increasing demand for clean label flavors, global manufacturers are experiencing more volatility and uncertainty around stability and quality of spice raw material acquisitions.

Companies such as Olam Food Ingredients (ofi), Kerry Group, McCormick, Givaudan, and Mane have grown their resilient programs in attempt to stabilize procurement from the affected spice-producing regions, such as India, Vietnam, Madagascar, Tanzania, and Indonesia. Their programming reflects another way supply chain issues are impacting product innovation, pricing structures, and long-term partnerships in the flavor, food, and beverage systems overall.

Climate Volatility Continues to Disrupt Core Spice-Growing Regions

The climate-related disturbances continue to be among the most significant threats to spice suppliers. The growing likelihood of extreme heat waves, unusual rainfall from the monsoon, and crop diseases are having a measurable effect on spices like vanilla, pepper, ginger, cardamom, cinnamon, and chili.

Floods in core Indian spice growing areas have caused quality issues with turmeric and chili crops, leading processors to alter estimates on extraction yields. Similarly, Madagascar has faced delays in harvesting vanilla while experiencing less consistency in moisture content in their beans over the last two seasons due to cyclone threats and flooding. In response, flavor houses have devised new plans to source vanilla and have invested in climate-resilient programs and sustainability in the region.

ofi has expanded its “AtSource” sustainability platform to improve climate monitoring and traceability across its pepper and chili supply chains. The company reported that farms supported through regenerative practices delivered more stable yields compared to traditional farms exposed to extreme weather swings. The data collected is already being used by B2B buyers to forecast purchase volumes more accurately.

Meanwhile, Kerry Group strengthened its agronomy support systems in East Africa, helping cardamom and ginger farmers adopt drought-resistant seed varieties. These measures are becoming essential as FMCG clients demand reliable delivery schedules for flavor extracts used in beverages, bakery fillings, soups, and sauces.

Shipping Bottlenecks and Rising Freight Costs Add New Complexity

Volatility is still evident in logistics, despite the consistency of crops. Over the past two years, there have been multiple disruptions, including port congestion, limited containers, and geopolitical instability in the Indian Ocean and Red Sea corridor that have affected shipping routes.

As a result of these disruptions, lead times have become more variable for some important spices, such as cinnamon, vanilla, and cloves. In fact, some exporters faced a significant increase in freight rates and shipping costs associated with some extract manufacturers, who typically are reliant on just-in-time delivery models to satisfy their customers.

Labor Shortages and Cost Pressures Affect Post-Harvest Processing

Labor availability strongly influences the quality of spices, particularly for crops like cardamom, vanilla, and cloves, which can only be harvested and cured through careful attention to hand-picking and curing. Labor shortages in many countries have increased the cost of harvesting and post-harvest activities, also impacting the stability of supply for extract manufacturers. For example, Indonesian vanilla farms experienced lower available labor force levels starting in 2024 and were unable to cure crops as intended. This impacted the performance of moisture of beans, which subsequently impacts the vanillin yield and result of extract producers.

This has led companies like Mane to increase their technical support programs for smallholder groups to provide some capacity for training farmers in consistent curing post-harvest with less complicated post-harvest tools for use within the framework that they develop. Their approach helps lessen the reliance on specialized labor for particular steps of curing to be able to provide some level of quality although they did not have labor available.

Increasing Regulatory Pressure on Traceability and Sustainability

Global spice supply chains are also responding to tightening sustainability and traceability regulations. New rules from the European Union, United States, and select Asian governments are pushing companies to adopt more detailed origin tracking, pesticide compliance checks, and environmental reporting.

Flavor suppliers now face higher documentation burdens, especially for botanicals sourced from fragmented smallholder networks. To address this, ofi’s AtSource and Kerry’s Supplier Sustainability Program are integrating digital traceability systems, capturing data from farm to extraction.

These tools help B2B clients in beverages, snacks, and savory food categories demonstrate compliance when marketing “natural” and “clean label” formulations. They also allow buyers to differentiate suppliers based on carbon impact, water-use intensity, and regenerative farming adoption rates.

How Supply Chain Challenges Shape Innovation and Product Development?

While disruptions create risk, they are also accelerating innovation. To reduce dependency on vulnerable crops, companies are experimenting with:

• New extraction technologies, including CO₂ extraction and cold-press methods that maximize yield.
• Alternative botanical species with similar aromatic profiles.
• Fermentation-derived compounds used as partial substitutes in price-sensitive applications.
• multi-origin blends that stabilize supply and flavor consistency.

As supply pressure continues, these product strategies are becoming core market differentiators instead of temporary solutions.

For a detailed overview of market risks, innovations, and sourcing strategies, explore the Global Vanilla and Vanillin Market

Building a More Resilient Future for Global Spice and Extract Supply Chains

The global natural spices and extracts industry is navigating a challenging period, shaped by climate volatility, logistics bottlenecks, rising labor costs, and stricter sustainability regulations. Leading suppliers are responding through regional diversification, regenerative farming investments, technology-enabled traceability, and innovative extraction methods. These developments are reshaping B2B sourcing dynamics and influencing how brands design new products.