Will your brand be a market maker for ag?
Meet farming realities Part 2
Last week, I postulated that consumer demand does not always lead to changes on the farm. While brands want healthier, more sustainable ingredients for their products, the availability of those ingredients can be elusive. Now I present examples of when consumer demand has invoked changes in ag.
Farmers plant what they get paid for
True. But certain agricultural landscapes have changed because of consumer trends with unknown demand potential.
Let’s look at a few examples from the not-so-distant past.
When government price supports end, you plant kale
Brief history of kale: American’s weren’t smoking as many cigarettes, so in 2004 legislation to end tobacco subsidies led growers in the South to look towards other crops. They wanted crops that could work with the same seeding and cultivation equipment as tobacco. Right around this time, kale was barely trending. Farmers learned that kale was easy to grow, easy to transport, and with a long shelf life it was pretty low risk. Today more than 90 million lbs of kale are sold in the US (and just to be clear, California is the top producer of kale, but we are happy for our Southern farmer friends :)
ELYSSA GOLDBERG WITH DATA FROM SANDI KRONICK, EASTERN CAROLINA ORGANICS Total kale sales data, from Sandi Kronick/Eastern Carolina Organics.
Let’s face it – kale is super nutritious. Dubbed a superfood in 2012 by Bon Appetit, three years later Daily Harvest launched their D2C meal subscription co. Daily Harvest has doubled down on the kale trend - valued at $1.1 billion 10 of their items contain the dark green roughage. It wouldn’t be crazy to say they may single handedly be making this market.
Run for the hills avocados!
Brief history of avocado production: In the 1960’s Southern California was already well developed with permanent crops like citrus and tree nuts. But nothing grew well on the hillsides except avocados. Avocados are super water intensive, and with increasing per capita consumption, the U.S. finally allowed avocado imports from Mexico, our largest supplier. That was 1997 and consumption has only grown since, therefore, imports have steadily grown.
But Mexican avocados have a huge corruption problem (the Fed’s recently banned imports from Mexico due to threats) and environmental problem (deforestation and earthquakes due to aquifer depletion). Sustainable avocados must be sourced from California which commands a premium price. Primal Kitchen’sCalifornia grown avocado oil puts the provenance ‘California’ right on the label. California grown avocados not only picked up the slack from the Mexican ban, but answer to the conscious consumer who has got used to the stone fruit as part of their regular diet.
And of course, almonds. Almonds are a perfect example (I never tire of the almond topic) of a demand driven crop. Despite water challenges, farmers continue to grow almonds. That is because almonds are California’s most valuable export crop. But it didn’t used to be.
Brief history: In the 80’s there was a glut and farmers were practically begging consumers to buy almonds. Remember this Blue Diamond commercial?
But then demand surged – not because of this ad lol – but because the growing middle classes of the developing world who LOVE almonds (in many of those countries almonds are considered a delicacy) could now afford it.Domestically, almond products became popular with the natural/premium consumer – and the Almond Board of California has done an excellent job marketing to this consumer target.
But premium brands like Almond Breeze, Maranatha, Justin’s or even Barney Butter did not make this market. As a supplier to 80% the world’s almonds, it’s the exports that make this market which has been great for U.S. brands because a huge market ensures plenty of supply.
(more about almonds because I can’t help myself) This year has been weird for the almond market because of Covid supply chain issues but taking that aside,California’s continued water problem should alone dissuade growers. But unlike avocados, almonds can’t grow in Mexico. And nothing else pays the California farmer as well. Other crops will be shorted (like tomatoes) to keep water on the trees. Some almond farmers have even purchased land they don’t plan to farm just for the rights to the water. Despite the water obstacle consumer demand is so high, it’s worth it to farmers to prioritize almonds.
Next up: Crop diversification in grains
Ag like any other business, looks at new opportunities as either a hedge or an investment. Crop diversification is usually a hedge. We are in special times with increased fertilizer costs and globally there is a grain shortage. Diversification from standard wheat, corn, and soy commodities are good for our diets, our soil, and can improve global food and national security.
Next week I’ll cover a 7th generation commodity grain farmer pivoting towards ancient grains and the granola brand they are bringing to market, Teffola.
All my best,
Regenerate America™ aims to amplify the voices of farmers and ranchers demanding that the 2023 Farm Bill shift resources & support towards regenerative agriculture.