"We are in an envious position with demand exceeding our supply," says Tim Aman of the Oregon hazelnut industry. "Prices that were as low as 30-cents a pound several years ago are now up to $1."
As a result, hazelnut acres are on the increase in the state's Willamette Valley, the outgoing president of the Nut Growers Society of Oregon, Washington & British Columbia added at the organization's annual meeting in Portland, Ore.
At the same time, new varieties like the just-released Wepster are boosting yields, and Ferrero, the world's largest buyer of the crop, wants to partner with Oregon growers to assure a high-quality flow of product from the only place in the U.S. to grow hazelnuts.
So convinced is Ferrero that the industry will continue to grow that it plans to open a new processing facility in Mexico next year, providing a second regional outlet for Oregon hazelnuts to the current Canadian Ferrero plant.
Underscoring nut quality and product traceability as key issues of the industry today, Ferrero says there is "an opportunity for Oregon" to grow its market share and diversify its sales arena.
Founded in 1946, Ferrero remains a family-owned business today and is the hazelnut producers biggest buyer in the world.
What began as a pastry shop is now a third-generation business so focused on family values that it prescribes that business style to its 27,000 employees and 72 affiliated companies, 15 factories and 3 social enterprises – organizations created to assist African and South American development.
A $9 billion business today, Ferrero considers hazelnuts a key product among its 40 different retail items, including the popular Nutella brand.'
"We are a major player in the hazelnut market with 25-30% of the world production," Ferrero business development chief Ettere Fontana told the Nut Growers Society of Oregon, Washington & British Columbia earlier this year. However, the industry is threatened, he adds, by its high dependence on Turkey's 75% share of the world crop for much of its sourcing.
Oregon, he adds, can play a much larger role than the 4% of world supply it is currently providing, he notes.
"Developing new production scenarios is important to continued growth," he says.
One such scenario is to link closer to Oregon growers in partnership with Ferrero to focus on improved technology and management tools, Fontana says.
There is room for growth in the Willamette Valley, says company procurement head Stefano Gagliasso Ferrero.
"We are looking for long-term partners in Oregon," he says. "You have space to grow your acreage, and you have good quality, but the hazelnut business is moving strongly toward fresh consumption, and growers need to recognize this."
The company is interested in formalizing long-term relationships with Oregon growers, he adds.
While Ferrero's Nutella product is reaching soaring sales results today, the company is perhaps mostly recognized for its Ferrero Rocher, a highly popular chocolate treat introduced in 1982, becoming a world leader in the confectionary category as a creamy filled wafer with a hazelnut center.