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Ag Deep-Dive

The World's Growing Love For Tree Nuts

The Covid-19 pandemic sparked a major shift in the ways that consumers prioritize spending. Once relegated to the category of “niche” interests, personal health and planetary sustainability are at the forefront of shoppers’ minds, especially when making food purchases. Demand for healthy, convenient, and sustainably-produced foods is on the rise, and plant-based proteins are more popular than ever.

Tree nuts in specific are surging in production as global consumer demand for nutrient-rich, “snackable” proteins soar. Already a nearly $39 billion industry, tree nut production is up 15% from last year and 65% from a decade ago.

Well-known for their health benefits and with steady annual growth rates of $1.77 billion per year over the last ten years, we don't see this slowing down any time soon.

What Falls Under The Tree Nut Umbrella?

Before we take a deeper dive into the business of tree nut farming, let’s take a look at some of the more significant crops that fall under the tree nut umbrella: pistachios, almonds, walnuts, hazelnuts, and pecans.

Almonds and walnuts make up the largest share of tree nuts produced globally, for a combined half of all nut production and consumption. The United States is the global leader in almond production, currently producing nearly 80% of the world’s almond supply. Aside from almonds, the US also produces 39% of the world's pecans, 30% of walnuts, and 4% of hazelnuts.

Pistachio farms are experiencing the most rapid production growth of them all. The US currently produces 48% of the world’s supply of pistachios, and US acreage has increased at 10.5% CAGR over the last 10 years. Per-capita pistachio consumption has more than tripled over the last decade, and the US saw its first billion-pound crop in 2020.

The Pandemic’s Influence on Consumption

The pandemic created a dramatic shift in consumer expectations, as 60% of shoppers report that they are making personal spending choices based on sustainability and 59% are looking to make more health-conscious shopping decisions. Purchasing patterns that emphasize sustainability and personal health position tree nuts for even further growth.

The health benefits of nuts are remarkable; according to a recent study in the journal Nutrients, five servings of walnuts per week leads to greater life expectancy and lower mortality. Additionally, in a 2021 study published in the European Journal of Nutrition, healthy vegetarian diets with high nut consumption were linked to lower cardiovascular risk. Additional studies link nut consumption with decreased risk of neurocognitive decline.

Additionally, sustainability-minded consumers are flocking to plant-based protein options to lower their carbon footprints. Nearly half of American adults want to increase their plant-based protein intake, and innovations in the tree nut industry, from nut milks to meat replacements, are making consumer choices easier than ever.

Growing Global Middle-Class Fueling Growing Demand for Nuts

The EU is the largest consumer of tree nuts, followed by China and the US. However, tree nut consumption is on the rise globally, particularly in areas with growing middle classes. India in particular is seeing rapid growth in nut consumption among its middle-class population. Almond consumption in particular is seeing rapid growth in India, with a nine percent increase in 2021 from 2020.

One of the main factors driving this is the rapid expansion of online shopping for food staples and the expanding Indian middle class’s demand for healthy food. India imports the majority of its tree nuts from the United States. Walnut consumption in India is also on the rise, partially due to e-commerce, but also bolstered by a recent governmental pamphlet that encouraged the consumption of walnuts for their immune-strengthening benefits.

The Growth of American Tree Nut Farms

Fortunately for American farmers, several regions within the United States are uniquely suited for the production of tree nuts. California’s central valley in particular has transformed itself into a global tree nut production capital. With its Mediterranean-like climate especially suited for crops such as walnuts, pistachios, and almonds, California nut farms are dominating global markets and are ripe for further growth.

​American almond consumption averaged two pounds per capita from 2001-2020, and consumption per capita has increased by more than 50% in the last decade. Ninety-nine percent of American almonds are grown in California and acreage increased at a 6% compound annual growth rate - nearly doubling in the last decade in response to rising global demand.

Currently, California accounts for 48% of the world’s supply of pistachios. Pistachio consumption in the US has more than tripled over the last decade as consumer preferences have increasingly emphasized plant-based proteins and snack foods. Ninety-nine percent of US pistachios are grown in California and acreage has grown at a greater than 10% compound annual growth rate in the last decade to meet rising domestic and global demand.

Pecans are the seeds of the fruit from a Hickory tree native to Mexico and the Southwest United States. They are the only tree nut with ecological origins in North America, and they continue to thrive in the Southwest. Pecan growth has accelerated in the last two decades, due to pecans’ nutritional value and buttery flavor. The United States and Mexico combined makeup 75% of the global demand for pecans, but demand in the EU is steadily rising.

Oregon’s temperate climate provides an ideal environment for American hazelnut farms. While Turkey is responsible for 75% of the world’s hazelnut production, the Willamette Valley in Oregon is home to 99% of American hazelnut farms. Recent hazelnut tree disease outbreaks in Turkey have grown the demand for American hazelnuts, and this year saw a record high in demand and production.

American Tree Nut Farms are Ready to Grow

The demand for nutritious, sustainable food is not going away, even as Americans are returning to the office and spending more time out of their homes. Tree nuts, lauded for their health benefits, ease of consumption, and as a plant-based protein source, affords consumers a healthy, ethical, and delicious option for snacking. With a favorable climate and booming demand, American tree nut farms are valuable assets, primed for growth.

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Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.


Sara Spaventa
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