So far, consumer thirst for almond products is strong despite drought-induced higher prices.
Almonds are awash in demand.
Unfortunately, California isn’t awash in rain.
The popularity explosion of almonds beyond the nuts category - in butters, nutrition bars, cereals, snacks, milks, flours, frozen desserts and more – comes from its high-protein profile and relative affordability vs. beef and seafood, as Americans have sought lower-cost alternatives.
Yet media coverage of the West Coast’s severe drought – where 99% of domestically consumed almonds are grown – appear to paint almonds as a water hog. If the image sticks, there’s risk it could turn almonds from cool to culprit.
To prevent this from happening, the Almond Board of California posted on its blog yesterday, August 10, a chart from the California Polytechnic State University showing that “almond trees and the water needed to grow them are in line with other California fruit and nut trees” – among them walnuts, pistachios, avocado, apple, pear, cherry, plum, prune and more.
The chart displays the amount of water needed to grow each crop productively, says the board, with most within the 37 to 43-inch range. The state’s almond growers report applying less water than the university’s chart depicts – 36 inches – thanks to stored soil moisture, local weather differences and rain in the growing season. The board further cites a United Nations paper documenting the use of micro-irrigation and other technologies to reduce almonds’ water needs by 33% since 1994. The board is also investing $2.5 million in next-generation farming practices.
Meanwhile, drought-limited supplies couple with high demand to raise prices of almonds and almond products. So far, they continue to sell. Despite everyday prices approximately $1.50 more per half-gallon than cow’s milk, consumers’ desire for dairy alternatives has almond milk on a four-year streak of double-digit growth. In the 52 weeks ended March 28, 2015, almond milk dollar sales jumped 28.8% to $859.4 million, following successive annual dollar sales gains of 68.0%, 56.5% and 50.7%, according to Nielsen U.S. all-outlets data, including convenience stores. That’s 4.7% of total milk sales of $18.1 billion.
Moreover, almond butter is prominent in the four-year run of “other nut spread” growth. The same Nielsen database measuring manufacturer, prepackaged, UPC-coded products only for the 52 weeks ended June 27, 2015, shows a 25.9% compound annual growth rate over four years in “other nut spread” dollar sales to $401.4 million. This outpaces a 3.9% four-year CAGR for peanut butter.
Yet percent change in dollar sales for the most recent 52 weeks for “other nut spread” slowed considerably to just 3.4% vs. prior year advances of 47.4%, 34.3% and 22.7%. This suggests headwinds ahead if almond prices continue to rise, says Facts, Figures & The Future (F3).
While major brand companies reportedly seek new almond sources in Israel and Spain, there is already talk about what the next new nut sensation could be. Might it be popular hazelnuts or cashews – both known for spreadable butters too? Cashews have also made inroads in milks, and they grow in many more countries than almonds.