Select Harvests Ltd, Australia’s largest vertically integrated nut and health food company, is one of Australia’s largest growers of almonds and the leading Australian manufacturer, marketer and processor of nut products to the Australian industrial and retail markets. Select Harvests “Lucky” brand is the leading nut brand in Australian supermarkets dried fruit and nut category.
In July 2018, Select Harvests announced a new agreement with PepsiCo China to distribute and market “Lucky” brand nuts in the Chinese market. Exports have become increasingly important to the Australian almond industry; according to data from the Almond Board of Australia, the country’s exports of almonds grew by 58 percent between 2012/13 and 2013/14.
Under the terms of the agreement, PepsiCo will manage the distribution, marketing and sales of the Lucky brand nuts in China, and Select Harvests will produce and supply the products. Select Harvests will also be a co-investor (along with PepsiCo China) in a significant advertising and marketing campaign to launch the Lucky brand in China during the first 18 months of the initial five-year term of the agreement.
Select Harvests General Manager Mark Eva was quoted in a company press release as saying that the new China distribution agreement “allows Select Harvests to participate in the increased consumption of Plant-based Foods, Nuts and Seeds in China, which is accelerating as consumers become more affluent and knowledgeable about the nutritional benefits of nuts and seeds. Our partnership with PepsiCo, who are globally recognized for their marketing, sales and distribution capability, creates a remarkable opportunity for Lucky.”
Ram Krishnan, President and CEO of PepsiCo Greater China, was quoted as saying that “With the continued development of the Chinese economy, consumers have ever-more demand on healthy and nutritious products. Entering into China’s Nuts and Seeds market is a crucial piece of our growth strategy and we are delighted to be collaborating with Select Harvests to deliver this to China’s consumers.”
The US is the world’s largest producer and exporter of almonds, with California responsible for 80 percent of the global almond supply; however, with President Trump’s recent trade disputes with China, China has imposed steep tariffs on US agricultural products, including almonds – according to the Wall Street Journal, “Chinese businesses say they are trying to buy more nuts grown domestically and from other producers such as those in Australia and Africa.”
US almond exports to China and Hong Kong have decreased significantly in recent months, compared to previous year numbers.
According to data from the Almond Board of California, “US almond exports to China in June were about half of what they were in the same month a year ago, and farmers have presold just 156 million pounds of almonds for the next season starting Aug. 1…Around this time last year, they already had committed shipments of nearly double that.”
The US almond industry’s struggles with exports to China could create an opportunity for other countries’ suppliers of almonds and nut-based snack products. The Chinese market is continuing to grow and develop. The Lucky brand venture with PepsiCo could be the start of a new era of healthy snacking for Chinese consumers.
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