(January 8, 2009) While some have called it the “billion-dollar baby,” others refer to the growth of the California almond business as one of America’s most extraordinary agricultural phenomenon.

Blue Diamond Growers was founded by 230 enterprising almond growers in 1910. Today, just two years shy of celebrating its centennial anniversary, the cooperative is owned by more than half of California’s almond growers. They help to produce more than 80 percent of the world almond supply and 100 percent of the U.S. production.

Almond Suppliers to World

In the early 1900s, Spain and Italy produced nearly all of the world’s supply of almonds. This gave those nations control over the market and the price paid to the California grower, and spurred the growers to want to control their own destiny.

The California growers formed a cooperative to be managed by a professional team of processors who received the crop from local receiving stations in Northern California and marketers who would eventually promote and sell the almonds under the now, renowned Blue Diamond brand.

After building a consumer and industrial ingredient business in the United States, Blue Diamond traveled to Europe and Asia in the early 1950s to learn about the competition in Spain and Italy. After formulating a successful strategy for selling California almonds to Europeans, Blue Diamond expanded into Asia.

The quality-conscious Japanese learned to include almonds in European-style pastries and were eager to learn more about Western-style snacking, and Blue Diamond almonds. By the mid-1960s, Japan consumed nearly one-third of the California crop.

The virtues of trading had finally paid off — Blue Diamond was the first company to team with the newly formed Foreign Agricultural Service to open a sales office in Tokyo, Japan, and distribute almonds through the Coca-Cola bottlers. It is this model of partnership that drives Blue Diamond’s trade relations today.

This is one example of advertising depicting young, active and health-conscious Thai consumers enjoying a Blue Diamond snack break. Photo courtesy of Blue Diamond Growers

Trade Agreement Impact

Blue Diamond works with myriad U.S. agencies to advocate for Foreign Trade Agreement (FTAs) in all regions where trade barriers to California almonds exist. It’s Blue Diamond’s philosophy that if tariffs on almonds worldwide could be reduced to zero, the global consumer would enjoy a healthy food and both the U.S. economy and the country with open access will grow their respective economies.

A win on the pending FTA in South Korea, for example, could turn a $25 million almond market into a $50 million market over time.

Most of the Asian markets are health conscious and are reacting well to the nutritional aspects of almonds. In some cases, the industry has conducted health research in markets such as Japan, China and India.

Not only are almonds the largest food export in California, but more than 70 percent of the supply is exported to nearly 100 countries. With the foresight to expand markets worldwide set decades ago, today’s almond industry is thriving despite increased production.

For example, the record 2007 almond crop was 23 percent bigger than the record 2006 crop and the 2008 crop was 9 percent larger than the previous crop. The state will produce 1.5 billion pounds of almonds this year valued at nearly $3 billion. That’s about one-third larger than the one five years ago.

Yet, 2007 almond crop consumption soared to unprecedented levels and drove Blue Diamond sales to a record $700 million-plus company. U.S. consumption jumped 7 percent, while export consumption increased even more: 50 percent in the Middle East; 32 percent in Eastern Europe; 24 percent in Western Europe; and 20 percent in Asia.

The potential to sell more almonds to the growing middle class populations in India and China is enormous. California almonds are now India’s largest U.S. import, but imagine the boom if high tariffs could be reduced to zero in a successful multi-lateral Doha Round trade agreement.

Investment in Research

Part of this export success comes from an industry investment of $15 million since the late1990s in nutritional research and a recent qualified U.S. health claim. The health attributes of almonds are making this whole food attractive in many ways and creating consumption opportunities worldwide.

For example, studies show that almonds:

• contribute to a healthier heart as an unsaturated fat source;
• help to maintain or lose weight as the monounsaturated fat is only partially absorbed and causes satiation, which reduces hunger;
• lower the risk of diabetes;
• inhibit tumor growth; and
• lower the risk of Alzheimer’s disease.

Growing Sales

Blue Diamond is the only “branded nut company” that has shown consistent sales growth over the last six years, averaging 25 percent annually. By 2010, the global snack market will be valued at $300 billion. This is inspiring Blue Diamond to adapt its successful snack strategy worldwide by linking with partners who value the brand franchise, while also helping global food manufacturers develop new products using almonds as a healthy ingredient. Using its advertising slogan, “More Than A Snack,” Blue Diamond hopes to build on consumers who want to eat healthy.

The cooperative is also supporting its growing volume of sales and shipping by adapting cutting-edge information technology designed to track business in “real time.” This also tightens production schedules to meet timely sales commitments.

Recent market research conducted by the Almond Board of California reveals that almond buyers are ready for innovative sales strategies worldwide. In 2007, for example, 60 percent of those surveyed incorporated almonds in a new product or menu item; 47 percent are using more almonds than they were five years ago; and 57 percent said consumer demand for almonds was an important factor in their decision to use them.

Between 2006 and 2007, new global almond introductions grew 26 percent and gained the highest percentage share of all new food and nut products.

To continue this successful business trend, Blue Diamond urges the approval of all existing FTAs and a future trade policy that is open to market access between countries and implementation of Trade Promotion Authority for the President to successfully conclude them on behalf of U.S. For more information, visit www.bluediamond.com.

“Profiles in Trade” is a regular feature highlighting the international activities of CalChamber member companies.

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