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Paramount Farms touts record pistachio return, future

Paramount Farms touts record pistachio return, future
There were a lot of happy growers at this year’s annual pistachio conference hosted by Paramount Farms, especially pleased with a record return on the 2013 crop of $3.53 per pound. In the last 10 years, Stewart Resnick says pistachio acreage has increased 118 percent - more than walnuts and almonds.  

In China, they call pistachios “the happy nut,” and there were a lot of happy growers at this year’s annual pistachio conference hosted by Paramount Farms, especially pleased with a record return on the 2013 crop of $3.53 per pound.

It was – in a word – “Wonderful” news for those whose production is marketed under that brand name and part of the reason they were at the conference that ended with the musical strains of a song made famous by Louis Armstrong, “It’s a Wonderful World.”

The annual event, held at the Visalia Convention Center, is, after all, a high octane affair – slick, well-produced, celebratory, and strung together with mostly upbeat tunes and talk.

Smiling to the bank

In the audience was Madera grower John Dean, who said he has been pleased that growers are getting a good return on their investment and that their cut remains positive.

“I’ve been smiling all the way to the bank,” Dean said.

Yet the 2014 crop had its challenges as drought continued while the company stands by an ambitious plan to grow the industry.

“We’ll have a billion pound crop in five to seven years, and it won’t be easy to move it,” said Stewart Resnick, co-owner and president of Wonderful Pistachios.

The task will be made more difficult, he warned, if the industry gets into competition on price and sells what if offers as “a commodity” rather than a “snack product.”

He pointed to significant growth within 10 years of the acreage of pistachios as compared to almonds and walnuts: 118 percent for pistachios, 47 percent for almonds and 30 percent for walnuts.

$3,519 average acre return

Talking about the successes in recent years, Andy Anzaldo, vice president of grower relations for Wonderful Pistachios, played a clip from the movie “Jerry McGuire” in which Tom Cruise shouts, “Show me the money.”

Resnick then did that. He said the average net return on three nut crops was $3,519 for pistachios, $1,431 for almonds and $884 for walnuts.

And Anzaldo added that a grower survey which showed that “the money” is the over-riding factor in grower satisfaction with a processor.

No. 1 and No. 2 on the survey was the response that they want a financially secure processor, one that offers the best return.

Anzaldo and Resnick also talked of the challenges in growing the industry.

There are just over 600 growers with Wonderful today. By 2020, the goal is to grow that to 800-900 growers. Today, there are 100,000 grower partner acres and 30,000 owned by Paramount Farming.

The 2020 goal is 150,000 partner acres, 33,000 Paramount acres.

Water advocacy

Panels on government affairs and water challenges included remarks from Bill Phillimore, executive vice president of Paramount Farming Co., who urged growers to contribute three quarters of a cent on every pound of pistachios sold to a water advocacy effort.

“We are threatened,” he said. “Acreage is going out of production.

“Pistachios are valued at $40,000 an acre. How much are you spending in the political arena to preserve that asset?”

Paramount has spent at least $20 an acre on the land it farms, he said, adding that the .75 cent figure per pound would be less than that.

Panelist and public affairs consultant Brandon Castillo said those interested in water delivery efforts “need to form a bigger tent,” adding that efforts are underway to broaden support beyond agricultural and water groups to add, for example, labor groups, chambers of commerce, businesses, and “ordinary citizens who understand it’s a systemic problem.”

“Famers are critical messengers,” Castillo said.

Tough international competition

On the marketing front, the industry continues to face tough competition from Iran and China, and the market there “has flattened out” there but remains promising, Resnick said.

Jasmine Hodari, vice president of marketing for Wonderful Pistachios, noted significant successes in advertising connected with Wonderful spokesman Stephen Colbert and his last show on Comedy Central.

Also a key to sales has been some 105,000 in-store displays in the U.S.

Forget the Super Bowl

She said the plan is to focus ads and other promotions around key holidays, March Madness, and the like. But instead of paying for costly Super Bowl commercials, this year the company is putting its money into projects that include a promotion for the boxing match between Floyd Mayweather Jr. and Manny Pacquiao.

Hodari showed a video clip of Pacquiao pounding a green punching bag. At the end, the bag exploded and pistachios spewed out.

Lynda Resnick, co-owner of Wonderful Pistachios, talked of the company’s philanthropy, much of it focusing on the small town of Lost Hills in Kern County, home to a significant population of people who work for Paramount.

The annual meeting also serves as a fundraiser for Valley Children’s Hospital, and Paramount has enlisted community colleges and high schools in an effort to train students for work in agriculture.

Better way of life

Lynda Resnick characterized Paramount as “a $4 billion company that builds better communities and quality of life for the Central Valley.”

Dave Szeflin, vice president of operations for Paramount, said the doubling of capacity at its Firebaugh plant has worked well, and the company has been able to concentrate on cost-saving steps.

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