“Over the last 75 years, the industry truly evolved,” said Clarice Turner, CEO at ABC, during the State of the Industry session. “We remain focused on growing demand for California almonds, both domestically and globally, with new products, new markets, new innovations, and new partnerships, as well as equipping growers with practical tools and resources.”
Signs of Rebound
That forward-thinking vision comes at a pivotal time in the industry, as the market begins to show signs of recovery amid ongoing economic pressures. According to UC Davis’s Dr. Brittany Goodrich, in the last five years, operating costs have increased between 27 and 40%, who discussed these findings in detail earlier this year on the The Almond Journey podcast.
Encouragingly, the supply and demand balance within the California almond industry is returning to a point of equilibrium, prompting a market rebound. Total almond acreage has decreased for the fourth consecutive year, along with new plantings. Even with a reduced supply, the industry recorded its third-largest shipping year, signifying a healthy market.
“Average grower returns have improved from the $1.60s in the 2023 crop (average all varieties), to the $2.30s per pound in the 2024 crop (average all varieties),” said Bob Silveira, chair of the Board of Directors. “That’s roughly a 40% increase.”
While this improvement indicates good progress, it underscores the importance of having accurate data to back market fluctuations.
In July, market frustrations came to a head when the USDA National Agricultural Statistics Service (NASS) Objective Measurement Report was released. Although this year’s crop size has yet to be fully determined, industry members are reporting that the measurement is off by a sizeable margin this season and improving the estimate is also not feasible, Silveira explained.
“With the size of the industry, getting a truly representative sample was just impractical, not to mention cost ineffective,” he said.
After much deliberation and discussion with several stakeholders, on December 9, the decision was made by the Board of Directors who voted to cease funding for the Objective Measurement. The Subjective Forecast, however, will continue to be produced and released in May.
Economic Outlook: What’s Driving Consumer Behavior
The challenges faced by almond growers over the last several years have not siloed to the almond industry alone. Across all sectors, farmers are facing hardships as a result of the broader economic landscape.
Scott Clemons, partner and chief investment strategist at Brown Brothers Harriman, explained that over the past several months, a slow labor market has weighed on consumer sentiment, a key driver of spending, which accounts for 68% of U.S. gross domestic product (GDP).
He attributes the decline in sentiment to three factors: expectations that the labor market will continue to weaken, rising inflation concerns among consumers and the increasing stress of household debt.
Positively, consumer spending remains relatively healthy, and it is expected that the Federal Reserve will gradually reduce interest rates by 1% over the next year. While a slowdown in the economy can be expected, Clemons does not anticipate a recession, though consumer sentiment will ultimately be the deciding factor.
Driving Demand: ABC’s Marketing Priorities
Global market development remains top of mind for ABC’s strategy, accounting for 64% of the overall budget. This year was no different, with marketing efforts focused on four key areas: ingredient innovation, global bakery, emerging markets and healthy foods.
With 14 forms and uses, almonds continue to demonstrate exceptional versatility. This adaptability has performed well in the U.S. and Europe, where 50% of almond volume goes into ingredients used in manufactured products.
Efforts to inspire new applications of almonds among food scientists, chefs and culinary students have also expanded. As a result, almonds remain the number one nut included in new products, appearing in over 9,000 new products throughout the last year.
Earlier this year, the Almond Board unveiled a partnership with Smoothie King, the largest smoothie chain in the world, where they encouraged customers to add almonds to their drinks. The campaign was very successful, resulting in almonds being added to 70% more smoothies and creating a lasting impact.
“Five months later, almonds have continued to be added to smoothies even after the promotion ended,” Turner reported. “We changed behavior, and that’s really hard to do.”
Global bakery remains another key focus, with a projected category growth of 40% by 2030. ABC initiatives in this area have accelerated in emerging markets like China, Mexico, Turkey, and Morocco, promoting the use of almond ingredients in traditional baked goods. Momentum in Turkey and Morocco have also picked up significantly, thanks to a newly secured USDA grant awarding at least $13 million to bolster these initiatives.
Healthy snacking, while still a top priority, has softened as consumers respond to higher prices.
“All nuts are down (in the U.S.), including almonds at 8.7%, but the whole category is down by 6.2%,” explained Emily Fleischmann, ABC vice president, global market development.
To remain competitive, ABC partnered with Deion "Coach Prime" Sanders for the third year in a row. His presence packed a bigger punch for California almonds, delivering “a 90% higher return on investment versus previous campaigns,” Fleischmann said.
Looking ahead, a new, modern campaign is set to launch this spring in India, ABC’s top performing market which receives 400 million pounds of almonds annually.
ABC also continues to capitalize on the health benefits of almonds. A recent partnership with BrightSeed identified 530 health-promoting compounds in almonds, four times more than previously known, and ABC’s newly launched nutrition affairs program will help elevate almond’s nutritional profile and influence scientific stakeholders.
