Tough Nut to Crack

Almonds bust then boom in China

Back Article Mar 31, 2013 By Sigrid Bathen

Richard Waycott says there are no silver bullets in the remarkable double-digit growth of California almond exports to China but rather a carefully honed strategy built on introducing almonds to a “pre-existing snacking culture.”

Although almonds are grown “on a very small scale in far, far western China,” according to Waycott, the CEO of California’s Almond Board, almonds were virtually unknown in China until introduced there by savvy California marketers in the past 10 to 20 years.

According to estimates from the Modesto-based Almond Board, a quasi-government, marketing organization representing almond growers throughout California, 1.5 billion pounds of almonds will be exported from California in the 2012-2013 growing year — more than twice the amount exported in 2005-2006. The top markets were mainland China and Hong Kong, which imported 236 million pounds of the nut in 2011-2012.

As “prolific messaging” about the nutritional and taste benefits of almonds converged with rapidly expanding Chinese affluence, Waycott and others in the almond trade say a marketing marvel was born. “Those two driving forces aligned,” Waycott says, “and that has contributed to the very significant double-digit growth.”

The same message and methodology are now being applied to other potential global markets, such as India and Russia. Brazil, Indonesia, Mexico and Saudi Arabia are part of future marketing plans. According to year-end Almond Board statistics for 2012, Spain was second in almond exports from California, followed by India, Germany, United Arab Emirates, Japan, Turkey, Canada, Italy and South Korea.

“I don’t think the almond industry has any secrets or silver bullets,” Waycott says. “It’s not rocket science. It’s hard work, dedication to a vision, funding that vision and finding the best human talent to execute that plan.” He predicts that future growth rates, as almond exports are expanded into other emerging global markets, “could easily be 9 percent a year.”

The nutritional benefits of eating almonds play a big role in the marketing strategy. In India, almonds are regarded as “brain food,” and American almond processors who do frequent business with emerging global markets tell the tale of Indian parents placing seven almonds in a glass of water before a child goes to bed, allowing easy removal of the skin of the nuts in the morning. Almond consumption reportedly jumps during exam times.

CHINA TRADE ‘GREAT BOON’ TO CALIFORNIA 

Like many modern almond growers and “handlers” (companies processing California’s vast almond crop), Skip Hubbard, president of the venerable Chico Nut Co., regularly travels to China.

Hubbard, a lifelong Chico resident, has been in the almond business for nearly 50 years, beginning when Chico and the surrounding North Valley were the hub of almond growing, harvesting and production.

“The trade with China has been fantastic for the almond business,” he says. “And it will continue to grow as the [Chinese] middle class grows. It has been a great boon to California growers.”

An independent processor that grows many of its own almonds on ranches in the nearby Colusa County community of Williams, Chico Nut also buys almonds from independent growers, both large and small. Producing only almonds, avoiding allergens and cross-contamination, the Chico Nut facility also sells “ingredient” nuts to the large confectionary market — Hershey, Mars, Nestle, Kraft — which in turn produces candy, energy bars and other food products.

Other almond ranchers band together in cooperatives like the century-old Sacramento-based Blue Diamond Almonds, which posted record sales revenues of more than $1 billion for the 2011-2012 growing year. “We’re just scratching the surface [in China],” says Warren Cohen, director of worldwide sales for the Global Ingredients Division of Blue Diamond and a 25-year veteran of the cooperative. “There is still huge potential.”

As the global export trade has exploded, irrigation has made almond ranching viable well beyond Chico to drier (and less frosty) San Joaquin, Fresno and Kern Counties. In part to meet that expansion, Blue Diamond will soon open a major processing facility in Turlock.

As almond ranching expands, growers and handlers alike caution that adequate water is critical to success. “There is always lots of worry about high-investment crops like almonds,” says Dr. Daniel Sumner, a professor of agricultural and resource economics at the UC Davis. “If you don’t get enough water to keep your trees alive, you lose 15 years of investment.”

While pointing to “very clear” data on California climate patterns that suggest higher temperatures and less rain and snow, Sumner emphasizes, “California has solidified its position as the dominant almond producer and exporter in the world.” Almonds are currently the Golden State’s No. 1 food export.

He credits Almond Board officials for “not putting all of their money into the marketing basket,” but also for focusing on government relations, food safety and the nutritional benefits of almonds. “They’re always on the ground with information that almonds are good for you,” he says.

FROM SMALL, FAMILY FARMING TO TOP GLOBAL EXPORT 

John Chambers views the meteoric rise of California almond exports to China with the perspective of a veteran rancher with deep knowledge of the history of almonds in California. He notes the introduction of almonds to California from native Mediterranean climates, the presence of almonds in ancient Egyptian tombs, the demanding nature of the almond crop, with its specific climate, planting and harvesting requirements.

He marvels at the pace of the 21st century Chinese export trade and the vast changes in how almonds are grown, harvested and processed throughout California.

“Until recently, Europe was our biggest market,” says Chambers, who worked in various aspects of the almond processing business in the Chico area for decades and now manages the historic Patrick Ranch Museum south of Chico. “Then Japan became economically viable and consumed large quantities of almonds. Now China is a huge market.”

A far cry from when he and his father and brothers harvested their family’s almond crop by hand, often on horseback. “It was a lot of work,” he recalls, “and you could lose your crop with one good frost.”

Soot-blackening, diesel-fueled “smudge pots” were used well into the mid-20th century to warm the orchards (replaced by wind turbines and misting irrigation), and high-school boys who worked on the ranches were not expected to be on time for school during harvest time. “The kids who had been working in the harvest, climbing the trees,” Chambers says, “they were ready to play football.”

Donated to the Chico Museum by Hester Grimm Patrick in 2001 and administered by the Far West Heritage Association, the Patrick Ranch Museum complex chronicles the agricultural history of the area and includes the imposing 1877 brick family farmhouse and the surrounding 28 acres — a small portion of the original ranch, where almonds were first introduced in the late 1800s.

While his family sold its 50-acre ranch years ago, the 69-year-old Chambers is still an almond rancher at heart. He pauses on a cold February day and gazes out at the 200-year-old oaks on the historic property, ringed by almond trees from the original ranch. The nearby foothills have a light dusting of snow from a recent storm, and he’s worried about the weather, especially the harsh north wind and the likelihood of frost — both potentially damaging to almond trees as they begin to bloom.

 “Looks like the almonds are going to be blooming in a couple of weeks,” he says.


 

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