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The image of America as breadbasket of the world is an enduring one. Agricultural products like wheat, corn, cotton, and soybeans hover at around 9 percent to 10 percent of our total exports year after year, and the collective output of our nation's farms has been growing at a steady clip of just over 1.5 percent annually since the end of World War II, largely due to increases in productivity. As the world's population continues to expand, so will demand for agricultural products, which makes this fertile ground for export growth.
High-value commodities like almonds are a crucial part of America's ability to continue growing its agricultural exports. California now produces close to 80 percent of the world's almonds, around 70 percent of which it exports. It's the state's largest food-crop export by a wide margin, surpassing not only other tree nuts like walnuts and pistachios, but also heavy hitters like dairy products and wine. In the last decade alone, crop yields in California have more than doubled, going from 700 million pounds in 2000 to 1.7 billion pounds last year. The growth of disposable income in emerging markets offers the best potential for increasing the world's ranks of almond consumers. While the global GDP is expected to grow 3.3 percent by 2019, China and India are projected to have growth rates of 8 percent and 7.5 percent, respectively. Not coincidentally, these represent two of the most heavily targeted and fastest-growing markets for almonds.
Blue Diamond Growers is far and away the largest player in this market. The privately held cooperative won't disclose the size of its footprint, only revealing that it's six times as large as the next-biggest of the 110 almond handlers in the state. Earlier this year, the Sacramento Bee estimated that Blue Diamond had $3.3 billion in sales over the last five years, $709 million last year alone.
In terms of crop output, analysts who study the market say the behemoth probably accounts for a good chunk of the state's—and, by extension, the world's—supply of almonds. "Their market-share production is certainly north of half of all the almonds grown in California, and somewhere in excess of that in terms of the export trade," says Jock O'Connell, international trade adviser for Beacon Economics.
While Blue Diamond may be the 800-pound gorilla when compared with other farms, its size indirectly benefits its smaller competitors. Almond exports are growing, and analysts like O'Connell say a large part of that demand is due to Blue Diamond's aggressive cultivation of overseas markets. A big part of getting all of these newly middle-class consumers to eat almonds is creating demand where none existed before, or building on a region's existing uses for almonds. In Western Europe, this means augmenting the region's storied history of nut-studded pastries and candies by introducing the nut as a salty snack, as it's frequently sold in the United States. "Lifestyles are becoming busier, so people start to snack more," says Bob Carroll, industrial export director for Blue Diamond. In the United Kingdom, where consumers already have similar snacking preferences, Carroll says Blue Diamond is already rolling out flavored almonds in snack-sized packages.
The economic crisis that gripped Europe made almonds a tougher sell, though. Almonds, while cheaper than most other tree nuts, are pricier than peanuts or starchy snacks like chips and crackers. When the number of new customers for the new snack products came in 15 percent lower than expected, Blue Diamond had to tweak its marketing tactics. Carroll says they've stopped relying on traditional advertising and now focus more on promotional tactics like giving away samples to London Tube commuters.
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