Following California's largest domestic crop of pistachios this year at 1.57 billion lbs., the volume is meeting not only an increasing interest in pistachios but a varied one as well. "The pistachio supply out of other parts of the world, such as Turkey and Iran, is suffering some water shortages, and they haven't had very big crops this year," says Jeffrey Gibbons, Senior Director of Grower Services and Farming at Setton Pistachio of Terra Bella. "However, there is still a tight supply, even though we had a record-breaking crop, because the demand is very strong."
Indeed, there are several reasons why demand is so high for pistachios, starting with industry efforts paying off on promoting pistachios and their associated health benefits. "We also have better distribution. We used to sell mainly pistachios in-shell, but we've been able to bring kernels into the market pretty successfully and sell them at big box stores," says Gibbons. This includes raw pistachio kernel options, which also continue to feed that consumer interest in healthy snack options–kernels are also more conducive to being a one-handed snack, unlike pistachios in-shell.
© Setton Pistachio of Terra BellaWhile much of Turkey's kernels historically went into products like baklava, pistachio paste and Dubai chocolate, that demand is shifting to California pistachio kernels.
Dubai chocolate and more
Add to that the fact that raw pistachio kernels are also their own separate product being used heavily in the ingredient market and are being swept up in an increasing interest in pistachio-flavored products, including Dubai chocolate products. "Our Raw Pistachio Kernels came out around the time the Dubai chocolate bar hit social media. People started to buy Raw Pistachio Kernels in retail bags and make the chocolate themselves because Dubai chocolate products were expensive," says Gibbons, adding that other chocolate-pistachio pairings, such as chocolate-covered kernels, were already in the marketplace as popular products. "Technology has improved so much that we can electronically sort out all of the shells and foreign material from the pistachio kernels, so we can go into more ingredient markets successfully, meeting the highest quality standards," he adds.
In the meantime, while much of Turkey's kernels historically went into products like baklava, pistachio paste, and Dubai chocolate, that demand is shifting to California pistachio kernels, given drought conditions in Iran and issues with the Turkish pistachio crop.
There also continues to be developing markets for California pistachio products, including India, which is also shifting its buying to California from Iran. Additionally, other markets include Vietnam, Korea, and China–the latter of which has significantly increased its pistachio consumption in the past 10 years.
© Setton Pistachio of Terra Bella
It now looks like the pistachio kernel demand has outpaced kernel supply.
Large crop and pricing
So, where is this leaving pricing this season? "The industry doesn't want to raise the price too much because we don't want to hurt the demand. We are still going to be producing 1.5-billion lb. crops, and we know that there's price sensitivity," says Gibbons.
However, it now looks like the kernel demand has outpaced kernel supply, which leads processors like Setton to shell out clean, US Ex. No. 1 grade open in-shell to meet the growing demand for pistachio kernels.
For more information:
Jeffrey Gibbons
Setton Pistachio of Terra Bella
Tel: +1 (559) 535-6050
[email protected]
https://www.settonfarms.com/
