March 18, 2020
Despite ongoing tariff challenges and recent market disruptions caused by the coronavirus outbreak, an industry group reports positive momentum in its efforts to promote California walnuts overseas.
Recent trade agreements have lowered tariffs on U.S. walnuts from 10 percent to zero in Japan, from 75 to 70 percent in China and from 120 percent to 100 percent in India, noted Claire Lee, who handles international marketing for the California Walnut Commission.
While the lower tariffs could help sales, the commission also received an additional $3.6 million from the federal Agricultural Trade Promotion Program to develop new markets and buyers, Lee said during a recent University of California Cooperative Extension workshop.
“Our market situation is very different today than it was last year,” Lee said on March 4. “All of this has created market momentum.”
The 33-year-old, grower-funded commission handles health research and export market development activities. It works in tandem with the handler-funded California Walnut Board, a federal marketing order established in 1948 to promote walnuts within the United States through education and production research.
The two organizations have established a set of priorities – to grow domestic and international demand, to continue to build support through industry engagement, to strengthen regulatory support, to push for more sustainable production practices and to conduct research programs that support the vision, Lee told about 60 growers and others at the workshop in Woodland, Calif.
International marketing efforts underway include retail promotions in the United Kingdom and Spain; TV ads in Germany with digital promotion set to start in January 2021; TV ads in South Korea; and promotional activities with food service and manufacturing industries in Japan, she said. A planned TV campaign in India was postponed because of the high tariffs there, she said.
The commission has had success in the UK using ATP funds, Lee said. Recently a two-week promotion in nearly half the country’s Home Bargain stories resulted in a 59 percent increase in sales during the period, while a one-day sampling in Costco UK produced a 28 percent sales boost, she said.
In February, the commission held a UK promotion called “The Power of Three,” encouraging consumers to boost their Omega-3 fatty acids with three handfuls of walnuts three times a week.
Domestically, the California Walnut Board’s 2019-20 retail program included $2.1 for a nationwide American Heart Month advertising campaign in February, reported Jennifer Williams, the board’s domestic marketing director. The campaign included in-store tactics such as circulars, signage, demos, social media and other activities, she said.
The board has also worked with the Produce for Better Health Foundation to pair walnuts with other commodities such as pears and apples, Williams said.
The board is in the midst of a 15-week TV advertising campaign in the U.S. that will continue through June along with print and digital ads that will run through August. In all, 97 percent of adults will see California walnuts advertising an average of 32 times, she said.
Spots will focus on snacking, as consumer trends surveys show that half of all eating occasions are snacks and the snack nut category grew 10 percent to $6.6 billion between 2013 and 2017, Williams said.
In recent years, international markets accounted for about 65 percent of the walnut industry’s business, but as competition overseas intensified and walnut prices dropped, the walnut board began investing more effort to boost U.S. sales.
The industry has placed a big emphasis on heart health since the American Heart Association certified walnuts as heart-healthy in 2011, meaning retailers could display the organization’s heart-check mark label near supplies of the nut.
Research in the past decade has also linked walnut consumption to slowing breast cancer, improving cognitive ability, controlling calories and boosting male fertility.
The efforts to promote demand are needed as bearing acreage of walnuts in the Golden State has increased from 218,000 in 2007 to about 350,000 in 2018, according to the National Agricultural Statistics Service. Acreage is expected to keep increasing, Lee said.
The estimated 630,000 tons harvested last fall was down from 2018’s production of 676,000 tons, but it was still nearly double the 328,000 tons produced in 2007.
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