The response by the California English walnut industry to depressed grower prices has been a robust marketing campaign on the domestic and international fronts.
Michelle Connelly, chief executive officer of California Walnut Commission (CWC) since Nov. 1, 2016, says the walnut industry is being pro-active, focusing on strategic marketing to increase the demand for California-grown walnuts.
Nut production continues to grow across the state’s walnut-growing regions. According to a National Agricultural Statistics Service survey, California acreage totaled 315,000 bearing acres in 2016, plus 60,000 to 65,000 non-bearing acres. Growers harvested a 602,000 ton crop in 2015.
The northern half of the state dominates production, yet Merced and Kings counties have experienced jumps in walnut acreage. A survey of walnut nurseries indicated sales of more than 18,000 acres of trees, but whether orchards were new or replants could not be determined.
The nursery survey showed a steady increase in annual sales since 2011.
Domestic, international sales
To build market demand, Connelly says the commission taps multifaceted advertising to target industrial and retail customers. Finding new uses for walnuts as an ingredient and in new walnut products are key avenues to boost walnut sales.
Connelly and CWC senior marketing director Pam Graviet outlined ongoing efforts to increase the demand for California walnuts and walnut products.
“Walnuts are in 22 percent of U.S. households so there is significant potential to improve this number,” Connelly said.
Internationally, 64 percent of California walnut production is exported, and there’s new growth in core markets including Germany, Spain, Japan, and Korea. Japan, for example, is a mature market for bakery use, yet building retail demand in this sector has increased walnut use by 30 percent.
Domestic walnut production in China and Australia has increased in recent years which has added more walnuts to the international market.
Competition, a strong U.S. dollar, and weaker economies abroad are reasons for lower U.S. grower prices over the last three years.
According to Connelly, buyers in these countries demand high quality walnuts, and prices depend on consumer demand.
The UK and India
The United Kingdom, also a long-time customer, buys in-shell and shelled walnuts. In 2016, UK buyers imported 440,000 in-shell pounds and 8.7 million shelled pounds. She notes the commission is successfully marketing walnuts in the country for snack food use and other walnut products.
In India, the country has a cultural history of nut and dried fruit consumption, and has been a good U.S. walnut customer for walnuts even though walnuts are domestically grown there.
“With the growing middle class, they are using better ingredients and volume is up. Walnuts from California are readily accepted in the market,” Connelly says.
The country of Turkey is an emerging market. There is some domestic walnut production yet the country is a net walnut importer. Connelly says India has economic challenges, but also has a culture of walnut use in sweet and savory foods.
“They value the quality and consistency of U.S.-grown walnuts,” the CWC leader says.