ORDU. As the TMO has announced the next round of sales for May, the selling price is unexpectedly high. Marketplayers reckon that hazelnut production will take a 20% dip in Turkey this year.
The TMO continues to seil its stocks in May and has issued a selling price of TRY 24 per kg for a volume 20,000 metric tonnes – 17,500 metric tonnes in Levant quality and 2,500 metric tonnes in Giresun quality. Market players reckon that this will be the final round of sales for the season. Only hazelnut exporters and industrial processors are allowed to buy and have to pay a deposit of 25% of the selling price. The selling price remains valid until 31 May.
The TMO’s se lling price has, however, caused some irritation as a more appropriate price ofTRY 22 per kg was initially anticipated. Small farmers have already sold their supplies and cannot profit from the TMO’s high price. Some traders reckon that the TMO intends to prevent a price collapse at the start of the new season in view of an possible inflation prompted by the coronavirus crisis. The Turkish Lira remains under pressure.
The market is highly volatile at present. Crackers selling their stocks to buy from the TMO at cheaper rates caused a temporary decline in farmgate prices from TRY 51 per kg to TRY 49.50 per kg. The high TMO price is, however, not attractive enough for buyers to conduct speculative purchases and the current market Situation is too uncertain for any forecasts concerning 04 or later. Buyers in Europe have enough stocks at there disposal and prefer to wait and see, which turn the market will take in Turkey. Natural hazelnuts, size 11-13 mm, are currently trading at EUR 7.40 per kg.
Market players expect a 20% decline in production. Crop estimates will, however, only be issued towards the end of May as there are no platforms, such as the INC, for which early production estimates are required this year. The advantage, however, is that late production estimates should be more reliable since the impact of the cold temperatures witnessed over the last few weeks can be better assessed.
COVID-19 has the world in its grip, creating chaos and uncertainty. The economy has been dealt a severe blow, and the food industry hasn’t been spared. But hard times call for scrappiness and creativity. Companies have to find innovative new ways to keep their business going. For the food industry, the answer just might be automation.
Time for more automation
The food industry is very people-intensive. Right now there’s huge demand, as you can see from people hoarding in the shops. We’re seeing a lot of empty shelves, especially for non-perishables like nuts and rice. This means we can keep producing, right? But the problem is, what about our staff?
There should be enough non-perishables in storage and production to last for months. Though with staff shortages it could be difficult to get those distributed quickly once distribution centers are cleaned out. When it comes to production, we also have a safety issue for employees. A company staffed by software engineers can easily ask their employees to work from home for a few weeks. For the food industry it’s a different story. Someone has to man the forklift or the assembly line, they can’t do it remotely. A factory needs people to keep it going. It’s a huge dilemma for food industry managers and it’s causing tremendous uncertainty: will my staff show up tomorrow? Not only are more people getting sick, schools are starting to close everywhere. A lot of people have no childcare options, so there are tough calls to be made.
Automation is the answer
Automation could play a big part in solving this dilemma. Imagine if you could run a factory that normally needs 50-100 staff with 20. If there is a silver lining to the COVID-19, it might be this: companies can take a critical look at how they function and find ways to run their businesses more efficiently.
Take our machine: if it can help you do the same work with two people that you used to do with six, that’s a win. Fewer people means less risk. Especially because Qcify’s machine is easy to operate: if the person who operates it is out sick, they can even be replaced by pretty much anybody of the staff. While with manual quality control, someone from the quality control department can only be replaced by another quality control professional with the right training to do classifications. This makes it very tricky to replace a sick staffer: it could take weeks. Weeks where you have no way of providing consistent data and where you lose a lot of time and resources in training the replacement quality control staffer. So more automation is definitely something to consider.
Short-term changes, long-term success
It’s hard to implement automation from one day to the next. Our machines are the easy part: we can install them in a day and train people in less than half an hour. Integrating our machines with sorting machines and other apparatus isn’t quite so simple. There are some actions that can be implemented in the very short term however. These also happen to be the measures that are an absolute must for food companies. I’m talking about changing the extent to which technology can help the company work remotely. Or improving efficiency to avoid various production and staffing problems. The goal is to run your factory as efficiently as possible. This means we can keep the whole industry running through any pandemic, and keep the flow of food to the world running more reliably.
I see this crisis situation mainly as a kind of nudge or incentive for companies to arm themselves better against problems like these. Hopefully we can take all the lessons learned and technology experiments we end up carrying out with us into the future. So we can play it safer, and create the security that is every company’s best weapon.
The Manchego pistachio stands out for having superior organoleptic qualities than American pistachios. The quality of our products will most likely continue since this is attributable to a substantially shorter vegetative cycle, which is linked to smaller trees and, therefore, more efficient photosynthesis. Global warming is damaging production in California and benefiting trees on the Iberian Peninsula. The salt content in water in Iran will lead to a decline in the medium term in Iranian production.
The US and Iran are the largest pistachio producers in the world. High demand for this nut around the world contrasts with supply. Focusing only on Europe, it’s estimated that more than 300,000 ha are needed to avoid imports, address pistachio production for the industry, and assume consumption will increase in the next decade. In this context, there is only one country on the continent (except for Turkey) with the capacity to produce this quality nut: Spain, specifically the southern half of the Peninsula, excluding approximately the first 100 kilometers of its coast.
The first person to bring the pistachio to the Madrid region was José Luis Ocaña, who is now 84 years old. In 2001, he decided to plant 2.5 hectares in Tielmes, a town in the southeast of the region. “I saw it [pistachio trees] in a magazine and decided to try it out. It was a gamble, because they didn’t exist back then. They called me the ‘the crazy pistachio guy’,” he says. A few years later, he doubled the number of hectares. Luis Ocaña recognizes that the pistachios are very profitable, but advises caution. “For many it’s the new ‘green gold,’ but it’s too early to celebrate,” he says. The pistachio, nevertheless, has become the fifth-biggest fruit crop in the region.
Pistachio trees are planted six meters apart. Every hectare fits 238 trees, of which 211 are females. The male trees must pollinate their flowers via the wind, so there must be one male tree for every eight to 12 females. Every hectare produces between 600 and 1,000 kilos of pistachios, double if the ground is irrigated. Producers receive between €4.5 and €5.5 for every kilo, and €10.5 if the variety is organic. But the final market price can reach as much as €30 a kilo. Madrid produces around 450 tons of pistachios, barely 5% of the national product. These pistachios are imported throughout Europe, where they are highly valued. Spain, however, consumes lower quality pistachios that come from the United States and Iran, which are the world leaders in the pistachio industry. Experts say there is enough business for at least two more decades.
“Spain needs another 100,000 hectares of pistachios. With the current growth rate, they’ll be planted in the next eight years,” says Díez. The crop adapts well to extreme climate, meaning that it can also grow in inland regions such as Extremadura, Castile y León and Castile-La Mancha, which has 80% of Spain’s pistachio plantations. The pistachio, however, has failed to flourish in the northeastern region of Catalonia. The tree was introduced in the 1970s, but did not adapt well to the high humidity.
To ensure Madrid farmers are not faced with similar problems, the Imidra carries out risk assessments, tests organic fertilizers and new varieties of pistachio (up to seven), and selects and improves the quality of grafts. What’s more, they offer courses to all producers that are interested in growing pistachio trees. Luis Ocaña, who led the way for other farmers, says: “If I could travel back in time, I’d plant them again.” Now nobody calls him crazy.
April is usually an important month for macadamia farmers in Kenya as this is the period when harvesting begins.
There is normally increased activity on farms in central Kenya in particular as farmers harvest their produce and sell to processors or brokers for as high as 220 Kenyan shillings (about 2.2 U.S. dollars) a kilogram. But with the outbreak of COVID-19 that has disrupted the global market, prices of the much-loved nuts have declined to an all-time low of 0.80 dollars a kilogram as farmers lack market.
However, to stem losses, savvy farmers are harvesting and bulking the nuts, some with the help of processors, as they wait for the world to overcome the COVID-19 pandemic. China, United States, Middle East and Europe are some of the markets where Kenyan farmers export the produce to. “The processor is helping us store the nuts until the global markets open up. We are harvesting and taking to them because we do not have quality storage facilities,” Charles Muriuki, a farmer in Meru, said on Wednesday.
Muriuki observed that they agreed with the processor to store the nuts, who would then pay them minus the storage charges, hoping that the crisis would end soon. “The nuts are prone to mold attack which causes aflatoxin if not stored well. We are better off when they are with the processor,” he said, adding that farmers only collect those that have fallen on the ground, symbolizing they are mature. Some farmers like Mathew Ng’ang’a in Murang’a are, however, drying and storing the produce for themselves hoping that the global market would resume soon and prices would rise as trade flourishes once again.
So far, he has harvested three 90kg bags of the nuts and stored them in sisal bags which help prolong the shelf-life, according to lessons he picked from agricultural officers. “Sisal bags are the best because they allow good aeration of air thus temperatures do not rise inside leading to mold attack unlike when one uses polythene sacks,” said Ng’ang’a, adding that the bag should be placed on raised timber planks to avoid water or moisture from reaching the nuts. But even as farmers dry and bulk their produce, they have crossed their fingers that the COVID-19 shutdown of global markets does not persist for long, so that export of the produce resumes soon.
The high yields are one of the reasons some farmers in the east African nation have ditched coffee and tea for macadamia. According to Peter Wangara of Limbua Ltd, which processes and exports macadamia, the export market is shut currently and since they are working with contracted farmers, they are collecting the nuts and drying for them to achieve moisture content of 3 percent before storing. East African nation’s macadamia production stood at around 50,000 tons in 2019, having grown five-fold since 2009, according to the Agriculture and Food Authority. At least 30 firms in Kenya process the nuts before exporting as the law requires. Enditem
Arizona’s tree nut industry generated an estimated $92.6 million in direct sales in 2017. That includes $70 million in pecans, $8.4 million in pistachios, $12.8 million through tree nut processing and $1.4 million through other farm-related activities, such as agritourism. Arizona ranked second in the United States in pistachio production, behind California, and fourth in pecan production, behind Georgia, New Mexico and Texas.
The study was funded through a United States Department of Agriculture block grant program designed to improve the competitiveness of specialty crops, like tree nuts. Researchers used data from 2017, which is the most recent year when complete statistics were available.
The study’s lead researcher, Dari Duval, economic impact analyst with Cooperative Extension and the Department of Agricultural and Resource Economics, says the total economic impact is actually higher, thanks in large part to work being done on orchards even before trees bear nuts.
“Because the state has a lot of new acreage, there are still many young trees that are not yet producing tree nuts,” Duval said. “Nonetheless, there are people working there to prune and irrigate those trees. So, when we look at industry sales, that new acreage isn’t necessarily reflected. However, the contribution to the economy is still significant because the producers are spending money maintaining those orchards.”
For pecans, it takes about four years for a tree to reach bearing age. For pistachios, it takes about five to six years.
Researchers estimate that, including sales generated indirectly through multiplier effects, such as businesses supplying tree nut producers with goods and services and industry employees spending their income at local businesses, the tree nut industry’s total contribution to the Arizona economy was $190 million in sales in 2017, and $113 million in gross state product. Duval says the industry supported 1,436 jobs in 2017, generated $73 million in labor income.
Because of the large amount of acreage yet to mature into production, Duval thinks it’s safe to assume that pecan and pistachio production will continue to grow in Arizona. In 2017, 38% of the state’s total tree nut acreage was nonbearing. She says total industry acreage more than doubled between 2007 and 2017. In 2017, 343 Arizona farms produced tree nuts, totaling 35,261 acres.
What About Water?
As the tree nut industry grows, balancing its water needs with the availability and affordability of groundwater supplies needed by residents and other water users will continue to be an important issue, Duval says.
Her research team found that tree nuts are not significantly higher water users than most other crops in the state.
“What we found is tree nuts fall just under the statewide average for all crops produced in terms of water requirements per acre,” Duval said. “We can also look at revenue per acre foot of water applied. Tree nuts are a fairly high-value crop. Compared to other crops in the state, they’re generating relatively high sales per acre foot of water.”
The team estimates tree nuts require just below the statewide average of 4.4 acre-feet of water applied per acre for irrigated cropland. However, as nonbearing acreage matures, water requirements will increase.
Researchers also found gross revenues per acre-foot of water applied for pecans and pistachios are higher than most of Arizona’s major field crops. When considering only bearing acreage, gross revenues per acre-foot of water applied topped $1,000 for pecans and $800 for pistachios. In comparison, the team says gross revenues per acre-foot of water for major Arizona field crops ranged from $200 to $400.
The full report is available online. The Department of Agricultural and Resource Economics has conducted several studies on the impact of specific industries on Arizona’s economy that are available online.
Duval’s research team also included Ashley Bickel, economic impact analyst; George Frisvold, professor of agricultural and resource economics and extension specialist; and Stephanie Perez, graduate research assistant.
A total of 320,000 tons of pistachios have been produced in Iran since the beginning of the current Iranian year (March 21), an Agriculture Ministry official said. Kerman Province is a top pistachio-producing province with 100,000 tons of output so far this year, followed by Khorasan Razavi, Yazd, Fars, South Khorasan, Semnan, Markazi and Qom,” Darab Hassani was also quoted as saying by ILNA.
Iran is the world’s top pistachio exporter, besides the US. Hassani expects exports to exceed 150,000 tons by the end of the current fiscal year (March 19, 2020). Iran’s annual domestic demand for pistachio amounts to 35,000-45,000 tons, accounting for 20% of the total output. On average, Iran exports 80% of its total pistachio yields, of which 80% go to only 10 countries. Germany, Afghanistan, the UAE, Bahrain, Jordan, Canada, China, the Czech Republic, India, Iraq, Kuwait, Kyrgyzstan and Kazakhstan are the main buyers of Iranian pistachio.
Walnut trees are part of our landscape, history and a source of richness for many rural areas, but, being slow growing, they are unattractive investments. The EU-funded WOODnat project has worked to counter the threat posed by faster developing, often foreign species to Europe’s forests.
Europe has vast forests and most are part of associated industries that need to be competitive to survive in a globalised world. WOODnatresearchers have modified procedures all along the walnut value chain, from young plants to already dried timber, to nurture European forests for productive landscape.
From stumps to mushrooms
“Thanks to the project, it has been possible to test better walnut plants, more profitable forestry models, innovative tools for managing both the logs and the timber, and new final products,” outlines Elias Cueto, head of the coordinating company, Seistag Innovacion. Improved performance of the walnut plant for timber production started with selection of walnut clones with superior qualities. Lifelong research by Ricardo Licea, head of the Biotechnology Department at consortium member Bosques Naturales, Spain, has bred a fast-growing walnut plant with high survival rates and straight logs with high-quality timber. Thanks to the collaboration with Industrial Plants from Bulgaria, production of this new super walnut tree has moved outside the lab. “After all, growing the actual tree takes production closer to the market,” Cueto emphasises. Collaboration with CREA, an Italian public research body and also part of the consortium, proved the feasibility of combining fast- and slow-growing species. “This improves profit from the plantation due to intermediate returns,” Cueto explains. Stump removal after harvesting of trees is expensive and unsustainable. Spanish partner company ECM Ingeniería Ambiental developed a biological process that produces edible mushrooms on the degrading stump.
Changing the colour of naturally pale walnut
Regarding technical tools, two Spanish companies have achieved results. An app provides information and brings transparency to the forest business, and solutions were developed by Asimov Efficiency for handling timber and veneer. The project has also enabled innovative manufacturing procedures to overcome the specific challenges of the European walnut. One restriction is the small diameter of logs; to overcome this limitation, WOODnat developed boards of mixed species. Naturally rather pale in colour, walnut wood normally commands less in the market, darker being associated with hardwoods like mahogany. In addition to the traditional technique of vaporising, WOODnat partners have developed two methods for darkening timber: using chemical dye and digital printing. A recent publication in Annals of Silvicultural Research (ASR) describes the process involving digital printing. The darkening procedure can also be seen on video.
The future walnut forest
“Research at the cutting edge of available knowledge was possible thanks to the support provided by CREA, but also thanks to the fact that walnut is a species with much added value.” Cueto envisages the next step should be to extend these methodologies to other species, with lower prices but much bigger impact on the European economy and landscape. A special issue of ASR anticipated soon will be dedicated to the main topics of the WOODnat project: plant production, forest models, mushroom cultivation and timber transformation. “This is also a tribute to Gaetano Castro and his family, a CREA researcher who contributed to the project despite illness which finally caused his death at the end of 2019,” concludes Cueto.
LAS CRUCES, New Mexico — After tariffs hit pecan farmers hard almost two years ago, famers in Doña Ana County were starting to feel a little less pressure, but now they’re dealing with impacts brought on by coronavirus pandemic. New Mexico Pecan Co. in Mesilla Park typically processes about 5,000 pounds of pecans per day, but COVID-19 has slowed production down. Greg Salopek, part owner, said several employees were furloughed for about two weeks because of slow business.
“In 2018, there was 31,500 acres of producing pecans in Doña Ana County,” Salopek said. “There’s a lot of people that work the industry here.” Salopek said that after tariffs impacted sales, the coronavirus pandemic feels like “a double whammy.” “I don’t see the same amount of walk-in traffic,” he said. “The streets are dead out here on South Main. We’re thinking of putting up some big billboards but with all this uncertainty we’re going to put that on hold for a bit.” Although online sales have gone up, Salopek said it’s still not enough. To hopefully bring in more revenue and stay afloat, New Mexico Pecan Co. is now selling pecans at wholesale price to the public “We’re just trying to see if we can help the people out give them some of the best snacks that are available in pecans,” Salopek said.
Nearly $10 million has been awarded by the U.S. Department of Agriculture to 11 multi-state projects that seek to boost the competitiveness of specialty crops.
The projects were funded through the Specialty Crop Multi-State Program, reauthorized by the 2018 Farm Bill, according to a news release. The program, according to the USDA, considers projects related to food safety, crop protection, and marketing programs that expand opportunities for fruits, vegetables, tree nuts, dried fruits, and other horticulture and nursery crops.
Some examples of projects funded this year are:
The California Department of Food and Agriculture was awarded $885,000 to fund research strategies for increasing marketable yield in California and Florida pomegranate orchards; The Arizona Department of Agriculture was awarded $487,000 to fund research work with the University of Arizona and University of California Cooperative Extension to advance commercial mushroom production by increasing the use of local agricultural/industrial wastes as production substrates; and The Florida Department of Agriculture and Consumer Services was funded about $850,000 to fund research with the University of Florida, the Pennsylvania State University, and the USDA-ARS to study disease resistance and diversity to improve lettuce cultivars against bacterial leaf spot through breeding, genetics, and study of the BLS-lettuce interaction. A full list of grant recipients and their project descriptions is available at the USDA website.
For more information about the program, contact Martin Rosier at Martin.Rosier@usda.gov
For the first time, the Almond Board of California (ABC) is concurrently releasing two California almond industry acreage reports: 2019 California Almond Acreage Report and Land IQ’s 2020 Standing Acreage Initial Estimate (bearing acres only). These reports are being issued side by side to improve industry reporting methods and provide a fuller picture of California’s almond acreage.
USDA-NASS reports a continued increase in California’s almond acreage in 2019. Bearing acres, or orchards that have matured enough to produce a crop, are estimated at 1.18 million acres, up 8% from 2018. The disparity between that figure and the total acreage, which includes nonbearing trees, indicates how much planting has been going on in recent years. ‘Nonpareil’ continued to be the leading variety, followed by ‘Monterey’, ‘Butte’, ‘Carmel’, and ‘Padre’.
Land IQ’s initial estimate for total bearing acreage in 2020, which reflects standing acreage that will be productive during the 2020/2021 harvest, is 1.25 million acres. This estimate takes into account both young orchards coming into production and orchards removed or estimated to be removed.
As almond acreage continues to increase in California, growers remain committed to continuous improvement, finding ways to responsibly produce more almonds to meet global and domestic demand and continuing to advance toward achieving ABC’s Almond Orchard 2025 Goals.
“Having the best acreage statistics possible allows the industry and ABC to plan for future production,” said Richard Waycott, President and CEO of the Almond Board. “USDA-NASS’s annual acreage report is the first of three annual reports, including the Subjective Estimate released in May and Objective Report in July, commissioned by the Almond Board to provide statistical transparency to industry stakeholders around the world.”
Since 1997, the USDA-NASS Pacific Regional Office has conducted annual acreage surveys of California almond growers to provide information on new plantings and removals. Each USDA-NASS California Almond Acreage Report includes estimates on bearing, non-bearing and total acreage, in addition to data organized by variety, year planted and county.
A major source of data for this survey is almond growers’ voluntary responses to mailed questionnaires distributed by USDA-NASS, with consecutive telephone and field follow-up. To arrive at the estimated almond acreage, USDA-NASS compares its almond acreage database with the 2017 Census of Agriculture, pesticide application data maintained by County Agricultural Commissioners and the California Department of Pesticide Regulation, in addition to data collected on the 2019 Almond Nursery Sales Report, which this year USDA-NASS released in conjunction with the California Almond Acreage Report.
In 2018, ABC first commissioned Land IQ, a Sacramento-based agricultural and environmental scientific research and consulting firm, to develop a comprehensive, living map of California almonds. The map is the result of nearly a decade of research, and because Land IQ’s approach does not rely on surveys or extrapolation, it has an accuracy of 98% or greater.
Beginning in 2019, ABC began a mapping process with Land IQ in which two acreage estimates will be released annually: the initial estimate of bearing acreage in April and the final estimate, with both bearing and non-bearing acreage for the same production year, delivered in December. In addition to the acreage estimates, Land IQ will annually produce an estimate of removed acreage. This year, Land IQ’s spatial analysis shows that between Sept. 1, 2019, and April 1, 2020, 29,817 acres were removed, and estimates that an additional 9,000 acres will be removed from April 1 to Aug. 31, 2020, for a total estimate of 38,817 acres removed.
Starting in 2020, Land IQ will annually provide its initial estimate to USDA-NASS to fine-tune the official California Almond Acreage Report and other forecasts. The USDA-NASS reports and estimates remain the official Almond Board statistics provided for the California almond industry.
“Combining the Land IQ data with the USDA-NASS California Almond Acreage Report helps improve the accuracy of the reports,” Waycott said. “This is one of several ongoing improvements we have made to ensure we are providing the most reliable reports possible for the industry.”
On May 12, USDA-NASS will release the 2020 Subjective Estimate, which provides an initial forecast of the upcoming crop. Data for the Subjective Estimate is based on opinions obtained from almond growers in a survey sent by USDA-NASS. Almond growers will soon receive the USDA-NASS survey and are encouraged to participate. On July 7, USDA-NASS will release the 2020 Objective Report. This report collects data later in the growing season, closer to harvest, and is based on an actual count of nuts on the trees. The report this year is eagerly anticipated, as growers around the state are reporting what looks to be a large crop.
A mechanical hum replaced the buzz of the bees in one Israeli almond orchard this season as farmers, concerned over the global decline of bee populations, tried a new method to pollinate their crops.
Through the blooming almond trees near the ancient site of Tel Arad in a desert plain in southern Israel, a tractor pulled a mast equipped with about a dozen small cannons that precisely shot pollen at the trees, allowing them to fertilize.
The job is usually done by natural pollinators, particularly bees, but there has been a drastic fall in the number of bees around the world, largely due to intensive agriculture, pesticides and climate change.
Most crops rely on pollination, so the trend has worried groups like the UN Food and Agriculture Organization as it looks to fight hunger among a rising human population.
“We see a crisis in 15 years where we don’t have enough insects in the world to actually do pollination and most of our vitamins and fruits are gone,” said Eylam Ran, CEO of Edete Precision Technologies for Agriculture.
His company says its artificial pollinator can augment, and eventually replace, bees. It mirrors the work of the honey bee, beginning with a mechanical harvest of pollen from flowers and ending with a targeted distribution using LIDAR sensors, the same technology used in some self-driving cars.
While bee researcher, Dr. Victoria Soroker is doubtful that honey bees can ever be replaced, she welcomes any agricultural technology that can ease the burden on the insects that are often harmed by massive hives gathering to pollinate huge monoculture fields for pollination, such as California’s over a million-acre almond orchards.
Edete has been working on a small-scale trial in several orchards in Israel and Australia and has agreements to do the same in the United States and Spain. The company hopes to scale up and be market-ready for 2023.
Ran added that California’s almond industry nowadays is paying over $400 million for beehives annually, yet doesn’t have enough of them for efficient pollination. Edete is planning to provide its mechanic pollination service at a cost similar to that of beehives.
Joseph Frey, CTO of Edete Precision Technologies For Agriculture, said, “As the bee population is declining, global agriculture needs a solution which doesn’t rely on bees anymore but which will either supplement or eventually replace the bees.”
From a publication of the CBI, the Centre for the Promotion of Imports from developing countries
To be competitive on the European market, a first step would be to implement food safety systems. Investing in new processing technologies, which will result in high-quality products and the preservation of all functional ingredients, can be the next step to success when competing with substitute products.
Contents of this page
What are the opportunities and barriers when I try to enter the market?
What are substitute products?
How much power do I have as a supplier when negotiating with buyers?
Who are my rivals?
1 . What are the opportunities and barriers when I try to enter the market?
Food safety certification is already a must
Due to complex challenges in today’s food supply chain, almost all food retailers request a food safety certification scheme. There are currently more than 200 different certification schemes for fruit and vegetables sector in the European Union. The preferred and most widely recognised certification schemes in the sector of dried fruit and edible nuts are BRC, FSSC 22000, IFS and SQF certification.
CSR is slowly integrated with product quality and safety requirements
Corporate social responsibility (CSR) is slowly integrated with product quality requirements. In the long-term foresights, suppliers of food safety and CSR certification will dominate the market because importers will not have a lot of time to find new suppliers or money to invest in their codes of practice. This process means that already certified companies will be more easily selected as a supplier, which could lead to more business for a smaller number of suppliers.
Introduce Hazard Analysis and Critical Control Points (HACCP) system into your daily practice. Even if HACCP is not obligatory in your country, you must comply with European food safety regulations. It is highly recommended to go one step further and certify your production with the latest versions of internationally recognised standards such as FSSC 22000, BRC or IFS. Invest in a certificate that is commonly requested by importers in your target market.
For tariff levels that apply to your country and your competitors, use ITC’s Market Access Map.
Do regular contaminants checks on products before exporting. Carefully check with the European importer that the laboratory sampling of your products is accredited and recognised by the European authorities and buyers. Being recognised as a mycotoxin-free company is a great advantage, not only for your company but for the whole country.
Ensure that official controls in your country include verification of compliance with hygiene requirements at least equivalent to the European regulations.
Certain systems for sustainable standards/certification can help you to enter the European market. It is recommended to improve your competitiveness by becoming CSR certified through one of the certification schemes such as Fairtrade, SMETA and BSCI or ISO 26000, especially if your product is aimed for repacking and reaches retail buyers. You can negotiate with your target buyers to co-finance a CSR scheme for long-term cooperation.
2 . What are substitute products?
Chips and baked savoury snacks remain strong competitors to nuts and dried fruit
The snack industry in Europe is dominated by potato chips. The largest market for savoury snacks within Europe is in the United Kingdom, which is estimated to be worth around € 4.1 billion. The largest markets for potato chips, crisps, savoury snacks and snack nuts per capita are the United Kingdom, the Netherlands, Norway and Spain. The consumption of savoury snacks across Europe varies from country to country, but an average of around 3.6 kg is purchased per year per capita.
Private-label products are beating branded products
Although consumers are searching for cheaper products, some of the packers have a “dual-track” strategy and operate in both the private-label and the branded segment. Moreover, many retailers offer opportunities for buying unpacked dried fruit and nuts.
Fresh fruit is a strong competitor to dried fruit
Dried fruit as a sweet snack is usually consumed between the main meals. There are many national campaigns to encourage the consumption of several portions of fresh fruit and vegetables daily. Those campaigns are often supported by fresh fruit and vegetables companies.
Use the healthy food trend as your unique selling point. Promote dried fruit and edible nuts as healthy snacks in your offer, on your websites and via social networks. Nuts are often used in snacks, biscuits, chocolates and bakery products. The current market trend is “health”, as consumers look for alternatives to “unhealthy” products such as biscuits and savoury snacks made of potatoes or flour. Unprocessed nuts are often seen as healthy, so this niche market certainly has growth potential.
Advertise your dried fruit and edible nuts offer as natural and, if possible, free of additives.
Invest in technologically improved drying and processing technology that can help your products to be perceived even as healthier. Try to eliminate by-products of baking and frying such as acrylamide, and use natural sugars such as fruit juice for the infusion of certain dried fruit instead of white sugar.
See whether you can offer your products at a lower price. Since the costs of production in Europe are rising, consider using cheaper processing facilities at additional stages of production.
Examine the performance of your products in the context of their sector (savoury snacks) and substitute products (for example, fresh fruit and vegetables). See whether your products are declining or increasing in sales and find out what caused the changes in sales.
3 . How much power do I have as a supplier when negotiating with buyers?
Retail requirements are increasing
The requirements set by the European retail are already high and will increase. Particular attention is paid to traceability and sustainable and responsible sourcing. Retail supplying companies, including the European processing industry, must provide detailed information on their sourcing. This fact means that exporters from developing countries must more effectively register where their products come from.
The European processing industry increasingly depends on dedicated suppliers
The processing industry is always looking for ways to lower the costs of supply and processing. This situation means that there is a search for partnerships, joint ventures and even partly backward integration in order to ensure a constant quality and supply, which is needed for the end products.
There will be increased demand for sustainable food ingredients
This development implies that items which are produced under good labour conditions or products which are organically produced or have a low CO2 footprint could increase in value. Such a situation is in line with the sustainability strategies that are being introduced by large companies. Their messages to the outside world inform the consumer and other parties that they are acting responsibly. This process means that they also expect such aspects from their suppliers and even their supplier’s subcontractors.
Cooperate with other exporters in your country; join forces to export to the European market.
Try to partner up with local importers in order to have the right equipment for processing and to meet the different requirements of European buyers.
Investigate who the major buyers are and try to arrange long-term contracts with them for a constant supply of edible nuts or dried fruits. Use trading agents if your company is new on the European market and if your country is not well recognised as a supplier of a certain product.
Be a reliable and professional partner within your partnership or joint venture. Be aware that buyers are demanding in their selection of partners; professionalism is a must.
Invest in packaging equipment if you aim to supply to retail chains. With the possibility to offer different packing formats and produce recyclable packaging, you increase your chances of becoming a supplier to private-label brands of European retail chains.
Increasing bargaining power of suppliers for specific products
The bargaining power of suppliers (farmers) towards exporters from developing countries is slowly increasing. Information is becoming more easily accessible to farmers thanks to modern communication tools such as smartphones and computers.
In general, the cyclical nature of raw material markets will continue and markets will change from being dominated by buyers to being dominated by sellers. In the long term, it is expected that some products will be insufficiently available. New land for production is sought after and farmers are gaining power.
The concentration of specific products in a small number of countries gives them a strong negotiation power; for example, hazelnuts and dried grapes from Turkey or almonds from the USA. As a result, any new product origin with high-quality produce has a good competitive position as a welcome alternative to the dominant players.
The demand from emerging economies puts Europe under pressure. People are becoming richer (including the development of a middle class in the BRICS and Next Eleven countries), leading to a higher demand for imports from developing countries. The growing global demand results in price increases.
Brazil is still facing a severe recession partly due to the fall in demand from China and the lower prices for raw materials. China itself is also experiencing weaker growth, while both imports and exports have been decreasing. Nevertheless, emerging markets offer you good opportunities in the medium term.
European eating patterns
European eating patterns may change, which increases suppliers’ bargaining power. The influence of different cultures (more “ethnic” restaurants) means that new dishes are eaten, some of which will contain nuts, as in the Asian cuisine. Although this part of the market will expand, it will probably not become mainstream. However, it could have an impact on nut consumption, as consumers may try the dishes at home as well. This situation will result in a higher demand and an improved position for exporters from developing countries.
Consider bundling your supply with other suppliers from developing countries, as European processors want to ensure the continuity of supply. Note that the European processing industry has some strong players.
Eating patterns and dishes differ across Europe. Try to find out which kinds of nuts are eaten where and how. This information will determine your position in that specific market.
Look at the worldwide demand to strengthen your position within the chain. The demand from emerging economies is putting pressure on the availability of ingredients for food manufacturers in Europe. This fact could strengthen your position.
4 . Who are my rivals?
Developing countries are losing a small part of the market share to competitors from the United States
The total imports of edible nuts and dried fruit increased over the last several years. This growth is especially high within the edible nuts sector in the last year. However, the import growth rate in the last five years was higher from other developed countries (14%) than from developing countries (7%). This import structure is greatly influenced by the significant increase in imports of almonds from the USA.
Figure 1: European imports of dried fruits and edible nuts by main origin, 2012–2016, in k € Source: ITC Trademap
The European market for dried fruit and edible nuts is concentrated
Over 70% of all the European imports of dried fruit and vegetables are represented by only four countries: Germany, the Netherlands, Italy and Spain. There are a number of well-established players (importers, agents and food manufacturers) in those countries. Dutch companies form the main European import hub for American and Asian countries.
All leading European importers of edible nuts and dried fruit have increased their imports and consumption. Italy and Spain noted the highest annual increase in rate of imports. In Italy, there was a high increase in import value of hazelnuts due to increasing prices from Turkey. Although Spain had a significant increase of almonds from the USA, the country imported fewer almonds in 2016 than in 2015.
The imports of edible nuts and dried fruit are led by suppliers from developing countries, with the exception of Spain, which is importing large quantities of almonds from the USA (Figure 2).
Figure 2: Main European importers of dried fruit and edible nuts, 2016, in k € Source: ITC Trademap
New origins for edible nuts and dried fruit are appearing on the European market
For edible nuts, your main competitors are the USA (almonds and to a lower extent walnuts), Turkey (hazelnuts) and Spain (almonds). For dried fruit, they are Turkey (dried grapes and dried apricots), China (dried vegetables and mushrooms) and the USA (dried grapes, prunes and cranberries). Strong competition for other products includes China (walnuts and pine nuts), Vietnam (Brazil nuts), Argentina (prunes), Chile (prunes and dried grapes) and the Philippines (desiccated coconuts).
Among the leading suppliers, Vietnam (mainly cashew nuts), Australia (almonds and walnuts) and USA (almonds) note the highest annual growth. Several new supplying countries in the sector for dried fruit and edible nuts are also strengthening their position on the European market; for example, cashew nuts from western African countries, Pakistan and Indonesia, groundnuts from Nicaragua, walnuts from eastern Europe or dried grapes from Iran and Uzbekistan.
Tariff rates vary and some countries benefit from preferential agreements
Depending on your exporting country and the existing trade agreements with the European Union, applied tariff rates may differ when exporting to Europe.
Examples include walnuts with an applied tariff of 4% for China and 0% for the other main suppliers, hazelnuts (3.2% for the USA, 3% for Turkey and 0% for Chile and the other main suppliers), dried grapes (0% for Turkey and Chile, but 2.4% for the USA and Iran), dried apricots (0% for Turkey and Afghanistan, but 2.1% for Tajikistan and other GSP countries). In other cases, such as with desiccated coconuts, there is no difference in applied tariffs between countries.
Figure 3: Leading external suppliers of dried fruit and edible nuts to Europe, 2015, in k € Source: ITC Trademap
Continuously monitor the trade between Europe and competing countries. In the past years with low harvests in leading producing countries, European buyers looked for new alternatives. Some European importers even invest in new producing countries to secure a stable supply. In the long term, the production of dried fruit and vegetables and edible nuts may become less concentrated.
Add value with substantiated health claims. The superfruit category is a new category where competition is not so fierce compared to mainstream products. You can use this opportunity and offer quality superfruits even if you are new to the market.
Compare your offer to that of the largest European suppliers for specific products. Find out why certain products are imported from specific countries.
Check the current import tariffs at the EU Export Helpdesk site. Choose “my export” and enter the CN code to find the import duties.