California Almonds: Creating Demand and Value Julie G. Adams NUCIS ITALIA Conference at Marca 2011 19 January 2011 1
Case Study in 15 minutes! About the Almond Board About the Almond Industry Global Strategy: How we Started European Approach 2
About the Almond Board of California Grower-enacted, established in 1950 Represents growers and handlers (processors) Quasi governmental Under the supervision of USDA Does not set, track, or quote almond prices Nutrition Committee International Committee PR& Advertising Committee Food Quality & Safety Committee Environmental Committee ABC Board of Directors Global Technical/Regulatory Affairs Subcommittee Almond Quality & Evaluation Task Force Voluntary 10 member Board of Directors (5 growers, 5 handlers) Funded by assessment $.03 / lb Production Research Committee Leadership Development Committee Admin & Finance Committee Reserve Committee Bee Task Force 39 employees based in Modesto, Washington, DC, and London 3
Industry On-Going Commitment, Investment Nutrition Research Discover and document health and nutritional benefits Industry Research Track and improve production Consumer Research Understand consumer attitudes Heart health Nine clinical studies over the last 13 years have shown that almonds can lower cholesterol as part of a diet low in saturated fat Weight management Recent studies indicate that almonds may improve satiety and can be eaten without the fear of weight gain Environmental research Production research Technical/Functional research Market Research Understanding market opportunities and threats 4
The Scope of the Industry Spanning 500 miles throughout the Central Valley Farm value Approximately $3 Billion 100% of U.S. production 6,000 growers, 100 handlers Approximately 80% of worldwide production #1 California agriculture export* Top U.S. horticultural export* * Value Basis 5
1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 **2010-11 Thousand Pounds Bearing Acreage vs. Almond Production 1600000,0 1400000,0 Bearing Acres Production Lineare (Bearing Acres) 1200000,0 1000000,0 800000,0 600000,0 400000,0 200000,0 - **2010-11 estimated Source: Almond Board of California 6
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Million Pounds Steady Growth, Record Production Export Domestic Crop Size 1800,0 1600,0 1400,0 Global demand and shipments anticipated to stay firm 1383,0 1615,0 1471,0 1800,0 1600,0 1400,0 1200,0 1084,0 1033,0 998,0 912,0 1117,0 1200,0 1000,0 800,0 600,0 400,0 756,0 406 517,0 503 529 830,0 824,0 582 691 712 653 610 698 866 978 1022 1000,0 800,0 600,0 400,0 200,0-167 210 211 239 292 312 332 304 368 395 411 450,0 200,0 - Source: Almond Board of California 7
Significance and Diversity of Export Shipments 449,504 FY 2009/10 Shipments Top Ten Export Markets 143,359 Million Pounds 133,043 109,041 83,933 67,198 52,930 39,419 36,597 35,703 34,639 Middle East/Africa 15% Canada/Mexico 5% Central/ Eastern Europe 4% Other 1% Asia Pacific 32% Western Europe 43% Source: Almond Board of California 8
California Almonds: Creating and Supporting Demand Worldwide 9
Determining Where (and how) To Invest Almond Experience 1.5 Exploratory Emerging Evolving Established 1 W. Europe U.S. 0.5 N. Asia Canada Market Volatility 0 India Russia SE Asia C./E. Europe Market Stability -0.5 China -1 Mercosur Mexico -1.5-0.8-0.6-0.4-0.2 0.2 0.4 0.6 Almond Inexperience 10
Strategy Development: Understand the Potential for Growth Health Consumer Culture Economy Growth Potential Key Categories Distribution 11
Global Marketing Strategy Geographic: U.S./Canada, EU China and India Japan, Korea Category: Chocolate Bakery/Patisserie Snack Market, Nutrition & Technical Research 12
North America: Where We Started in the Late 1990 s Consumers: Practically no top-of-mind awareness No positive health associations, some negative associations with Cholesterol Extremely low awareness of almonds as ingredients in CPG and Foodservice No differentiation amongst the nuts Challenge: Raise awareness of almonds as a tasty, nutritious ingredient and snack Health Professionals: Fat and Cholesterol confusion Calorie content overshadowed any nutrient or health benefit Nuts not top of mind for patient recommendations Challenge: Overcome the negative associations and raise awareness of the benefits of almond consumption 13
Comprehensive, Powerful Program Integrated program leveraging research, PR Consumers Advertising PR Health Professionals Consumers Health Professionals PR Advertising Food Professionals Advertising PR Volume Drivers Research Innovators 14
Almond Nutrition Research Overview: 1995 to present Substantiate the health and nutritional benefits Strong heart health focus 2003 FDA all-nut qualified health claim Over 75 papers now published Partnering with leading universities, institutions globally: UK, China, India $10 million research investment to date 15
Consumer Advertising Evolution An evolving message has shifted from taste and general health to taste and heart health Nutrition Taste 1998 2000 2001 2003 July 2003 2004 2005 2006 Taste and Versatility Taste and Nutrition Taste and Heart Health 16
California Almonds Advertising in North America Over 10-years of advertising and public relations in the North America market to raise awareness and demand for almonds Almonds are viewed as an essential, smart and contemporary Evolution of almond campaign message Almonds make food better Almonds make me better Almonds make life better everyday 17
California Almonds Growth in North America Almond usage, top-of-mind awareness and liking has increased with program spending 240 220 200 180 160 140 120 U.S. Marketing $ Per cap U.S. Shipments Top-of-Mind Liking Health Perceptions Purchases Per Month 100 2001 2002 2003 2004 2005 2006 2007 2008 2009 18
Marketing to the European Consumer 19
California Almonds in Europe: Campaign Evolution Almonds as an essential healthy ingredient Getting health professional advocates on board From disease prevention to wellness & lifestyle 2002 2006 2008 2010 2011 Recipe development Celebrity chef partnerships Heart-health research communication (PEP) Health Professional Advisory Board Medical congresses Trade/Food professional PR & advertising World Pastry Cup Sponsorship 20
Leveraging Research: EU Article 13 Health Claim Submission Food Benefit Conditions/claim Nuts Heart health Eating 30g of nuts/day (e.g. almonds, hazelnuts, pistachios, walnuts) as part of a balanced diet helps maintain heart health. Nuts Almonds Weight management (via satiety by protein and fibre) Maintains healthy blood total & LDL cholesterol and heart health Eating 30 g of nuts per day as part of an energy-restricted diet helps maintain a healthy weight. Consuming a handful (30g) of almonds per day as part of a diet low in saturated fat, helps to maintain healthy blood cholesterol and promotes heart health. 21
California Almonds in Europe: UK Campaign Almonds as an essential healthy ingredient Getting health professional advocates on board From disease prevention to wellness & lifestyle Focus on healthy snacking 2002 2006 2008 2010 2011 Recipe development Celebrity chef partnerships Heart-health research communication (PEP) Health Professional Advisory Board Medical congresses Trade/Food professional PR & advertising World Pastry Cup Sponsorship Guardian/Sainsbury Consumer summer promo Amanda Ursell nutritionist spokesperson Paid-for media partnerships (Good Housekeeping) UK consumer handbag campaign /consumer advertising 22
European Communication Approach Press Office Innova partnership E-Newsletter Collateral development Food Professional advertising Dietician/Nutrition Outreach Advisory Board E-Newsletter Health Claim Print & online advertising Celebrity spokespeople Paid for media Press Office E-Newsletter Health Prof. 7% Budget by Target Audience Manufacturers Retailers 18% Consumers 75% 23
Almonds: Almond Messaging Almonds become compelling, and relevant when positioned as a healthy, convenient snack Simple shift from ingredient for baking and holidays Using the almond tin to express relevance of almonds as a snack, lifestyle food choice 24
New UK Consumer Advertising: Launched January 2011 25
In Summary: The California Almond Partnership Significant investments in food safety, quality, and research Stable supply to meet demand Integrated programs to benefit the long-term wellbeing of producers, customers, and consumers Versatility and value-adding advantages Proactive and committed to the long-term health of the industry 26
Thank you! Almond Board of California 1150 Ninth Street, Suite 1500 Modesto, CA 95354, USA Tel: +1 (209) 549-8262 Fax: +1 (209) 549-8267 www.almondboard.com 27