Shedding light on the nuances of walnut commerce and market penetration, Robert Verloop, Executive Director and CEO, alongside Pamela Graviet, Vice President of Integrated Marketing of California Walnut Commission, spoke to BW Businessworld in an exclusive interview. Armed with decades of combined expertise, they gave insights into the evolution of the industry, challenges and tailored strategies fueling the walnut industry's growth trajectory in India. Excerpts:
How has the removal of retaliatory tariffs from India impacted the Walnut market development plan?
Robert - When altering the tariff structure, it signifies a recovery. This shift occurred before the California harvest season, resulting in increased interest from traders and the trade industry in India. It is anticipated to decrease walnut costs for consumers, which is advantageous.
Currently, there's a 100 per cent tariff on all walnuts entering India. The hope is for a reduction in these tariffs in the future, benefiting consumers and enabling programme expansion. Regardless of tariffs, we maintain a long-term strategy for India.
Our focus remains on affordability for consumers. We are committed to investing in consumer education, collaborating with the trade to introduce new products and understanding consumer preferences. Research aimed at identifying consumption barriers will guide our marketing, packaging and product development initiatives, aimed at increasing walnut consumption.
Can you elaborate on the growth trends and challenges that California Walnut has observed in the Indian market and how do you plan to deal with it?
Robert - In 2016 and 2017, there were adjustments in the tariff structures. Earlier, when tariffs stood at 30 per cent, there was substantial interest in the growing market in India. The country's economy was on an upward trajectory, prompting growers to plant more walnut acres in anticipation of increased shipments.
Now, these trees are in full production, yielding walnuts with a lighter, golden tone - a variety favoured in this market. Our production has aligned with the market potential, awaiting a surge in demand. However, challenges like onerous tariff structures and disruptions due to Covid and supply chain issues have slowed progress. Despite this, we've observed a sales uptick this quarter and anticipate a continued increase over the next two to three quarters.
Collaborating closely with retailers and restaurant operators is crucial as they play a pivotal role in making the product available to consumers. We're exploring opportunities for profit and margin across the entire distribution chain.
From a business perspective, boosting consumption benefits many stakeholders in the distribution system between growers and end consumers. We've streamlined our product offerings, concentrating on the core and more popular varieties.
Are there specific business strategies tailored for the Indian market that you plan to implement in the upcoming years?
Pamela - Our current business strategy revolves around enhancing awareness and usage of walnuts in everyday life. While people generally understand the health benefits of walnuts, our focus now is on educating them on how to integrate walnuts into their daily routines, whether in home-cooked meals, takeaways or restaurant menus.
Another aspect is targeting the snacking industry, recognising the global trend of snacks replacing meals. We aim to offer nutritious, high-energy alternatives to conventional snacks, collaborating with India's snack manufacturing sector to provide healthy options.
Additionally, we're working on increasing visibility for walnuts in stores, using in-store signage and promotional materials to prompt shoppers to consider adding walnuts to their baskets. Our goal is to nudge consumers toward nutritious choices for their families while they shop.
Moreover, we view retailers, restaurant operators and food manufacturers as partners rather than just outlets. We understand that selling through them is crucial to reaching consumers effectively. Ultimately, it's about these partners facilitating the availability of our product to the end consumer.
Can you give us a quick overview of the current state of the trade and the global market trends?
Robert - Over the past decade, the demand for wellness products has nearly doubled, driving an increase in production. However, the current demand lags slightly behind production due to factors like Covid-19 and other disruptions. This slowdown is expected to rebound, especially with a return to plant-based eating and increased focus on snacking.
The pandemic prompted a heightened focus on health and wellness. As the economy stabilises, we anticipate a surge in global demand. Our company represents 44 per cent of the world's exported/imported walnuts, positioning us as a leading player. Market development efforts have significantly boosted demand, yet per capita consumption remains relatively steady globally.
Our challenge lies in increasing per capita consumption. We aim to encourage more people to incorporate walnuts into their diets regularly. Developing this habit is crucial, aligning with people's daily food considerations.
What are some widespread myths about consuming walnuts worldwide?
Pamela - The myths surrounding food consumption aren't unique to any specific region. Similar misconceptions exist globally, including among Indian consumers. It's a common aspect ingrained in food culture. Even in the United States, where per capita walnut consumption lags behind other regions, there's a need for education on these matters.
For instance, the belief that one should consume only one or two walnuts a day is a prevalent misconception. The idea of seasonal eating is deeply rooted in history, especially considering that walnuts are among the oldest known tree fruits, dating back 7000 years. In ancient times, without refrigeration, people primarily ate foods in-season due to limitations in long-term storage methods. This practice of seasonal consumption persisted across generations, encompassing various fruits, vegetables and other foods, including walnuts.