A lot of almonds are looking for consumers

The California Almond Industry continues to impress as a science-driven high-performance industry with growing output and a remarkable level of smart technology. While we see record harvests every year the pressure on the almond board to stimulate sufficient consumption all over the world is growing. Water also remains an issue for the industry. Axel Breuer asked the new chairman of the Almond Board, Mike Mason and Richard Waycott, CEO about the current and future developments and challenges.

Congratulations to your new position as Chairman. Please tell us a bit about your background.

I am an almond grower in the Wasco area. We also have a packing and shipping facility in Wasco – Supreme Almonds of California. We farm about 2,500 acres collectively, but we also pack and ship almonds for about 200 other growers.

Which are the major topics you are currently dealing with as a grower?

As a grower it is always the same topic (laughing): Regulation, regulation, regulation.

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New regulations come whether you are using a specific product. A lot has to do with Sgma (Sustainable Groundwater Management Act), the groundwater regulation: Each basin now has to come with its own sustainability plan, that is due in 2020, if you are severely over drafted. If we are taking out more than we are putting in than it is probably not sustainable – that makes some sense. There are certain pesticides and herbicides that we use that have problematic public perception - there is not a lot of science behind the criticism, no risk assessment. Sometimes it is just the public perception that all pesticides are bad so we have to get rid of all of them. I am still wondering about that because I think if farming is not sustainable I do not know which business is because it is the oldest human industry. And we do have a good story to tell. But there is room for improvement. People need to understand what farming is all about. The almond industry has the CASP program (SustainableAlmondGrowing.org), which started in 2009 to improve and communicate sustainability issues. In our current evaluation of our carbon footprint we can factor in the burning of our biomass. And the amount of solar that

the almond industry has installed in the last years is phenomenal. That has not been factored into our carbon calculation. We might be able to become carbon-neutral in the near future.

Are you still concerned about media and public awareness about the almond industry like the uproar about water use? (See the Mother Jones article from 2014)

Over the last 20 years we have reduced the amount of water it takes to grow almonds about a third – by better management, better irrigation systems, better moisture monitoring. We have introduced the socalled Almond Irrigation Continuum last year and we have already gone through all three steps (minimum, intermediate, advanced). Some of our colleagues went to Israel for a meeting with Netafim, specialist company for irrigation systems. In December we are starting their latest technology with a variable rate precision irrigation. We are isolating much smaller areas that can be treated individually. It’s not a totally new idea but we are fine-tuning all the aspects to achieve the optimum performance. Hopefully we will be able to roll out these methods. We just get a lot more productivity with the same amount of water.

What is your forecast for almond production in California?

We are going to see an increase of production because we know there have been a lot of new trees planted, a net growth of production – not just replacement of older trees. Some growers would shift to almonds from corn or grapes for example. Over the next five years we expect a 30% rise of production.

Will the world market be ready for the increased volumes?

About half a year ago we increased the assessment from 3 cents to 4 cents per pound. We did that because we know that we will have an increase of production and we have to turn on the ‘marketing machine’ early. You cannot just do more marketing when the bigger quantities are there because it will not have an immediate effect. We are entering some new markets and we are developing some existing markets – like Germany. Let’s take the example of Germany. In the past we had a budget of US$300,000 to 400,000 for the country for some PR. We increased this budget in the current year to US$4.5 m with a new campaign that only started in October 2017. We are making a big effort to increase the awareness of the German consumer for almonds and healthy snacking. We had great success with efforts like this in the UK and France, but Germany seemed very different to us. In the past, we had no real understanding how to approach that market. It just seems our timing is good, things seem to change a bit. Even the retailers seem to be changing. Our next target is Italy. We will apply our formula there and hope it is going well. And we will go to Mexico, which is so close but we have never done anything there. That will be very interesting because Mexicans have a great food culture. Mexican consumers look to the US for topics like lifestyle and food. The middle class is large, 125 million people – and they have a very modern retail infrastructure. But the approach will be a bit different. We are working on that right now. We are also going back to Japan where we have not been active in the last seven years. Though all the demographics do not look favorable Japanese consumers continue inventing a lot of almond products. We decided not go to Indonesia, it seems to complicated right now. Some of the toughest targets we have are in South America. We are trying to figure out how to approach Brazil and Argentina. Both of those countries tend to be difficult for imported products unless you are part of MercoSur agreement with varying tariffs and fees. The retail markups are huge. We are still trying to figure out the best approach for these markets – both for snacking and the ingredient industry.