Vanilla beans are the seed pod of certain tropical orchids in the genus Vanilla which, after processing, contain hundreds of aroma and flavor compounds, of which vanillin is the most prevalent.
There are currently three major varieties of vanilla: V. planifolia (aka Bourbon), which is grown on the island of Madagascar, V. tahitensis, grown on the island of Tahiti, and V. pompona, grown throughout Mexico, Central and South America. Care should be taken when buying Mexican vanilla, though, as quite a bit of it is flavored with the tonka bean, which has a coconutty-vanilla sweetness, but is also a source of coumarin and can be toxic to the liver.
Vanilla is expensive to produce, in fact it is the second most expensive spice in the world, only behind saffron. This is due to many factors, such as the hand pollination that must take place with every vanilla flower, harvest, which must be done by hand and checked daily to ensure optimal ripeness of the pod, and a multi-step process of curing the bean to develop the characteristic aroma and flavor. Vanilla beans are graded by weight, length, and moisture content, and contain around 2.5% vanillin. From start to finish, this process typically takes three months, and good weather is critical to the finished product.
Vanilla beans typicaly cost anywhere from $1 a bean wholesale to upwards of $5 a bean in upscale supermarkets. Vanilla beans are used in custards, baked goods and in the production of vanilla extract.