A hazelnut farmers’ cooperative shifts to domestic sales as overseas sales channels face disruption from pandemic.
The coronavirus pandemic has upended supply chains and global sales channels for food manufacturers in Oregon. Hazelnuts are no exception. It is an industry heavily dependent on exports — most processors ship up to 80% of their goods overseas.
The farmers’ cooperative Hazelnut Growers of Oregon has launched a new brand of hazelnut products, Oregon Orchard, to sell to U.S. customers. The launch is designed to help growers become less dependent on exports.
The cooperative, which has 180 member growers, is less dependent on exports than the other handlers, shipping between 60% and 65% of products to domestic customers.
For the past few years, it has sought to create value-add hazelnut products for domestic industries, such as food service and industrial ingredients.
RELATED STORY: A Tough Nut to Crack
Greg Thorsgard, chief operating officer of Hazelnut Growers of Oregon, describes how the pandemic has impacted exports, and how food manufacturers can no longer view e-commerce as a new “frontier” for selling products.
This interview has been edited for length and clarity.
Oregon Business: What effect has the coronavirus pandemic had on hazelnut exports?
Greg Thorsgard: The greatest impact has largely been overseas trade-marketing opportunities that have been postponed or canceled due to the pandemic. These are venues such as trade shows and outbound trade missions that are unique opportunities for acquiring new customers, finding new markets and maintaining existing customer relationships.
Fortunately, our largest export market, China, has recently announced its recovery from the virus and is making efforts to return to normal business operations. We hope to see demand for hazelnut imports match or exceed our annual plan by the beginning of the fall.
OB: What does the annual harvest of hazelnuts look like this year?
GT: Regardless of this pandemic, we anticipate a record-breaking crop this harvest. Hazelnuts are an alternate bearing crop, with high and low volume shifting year over year. This coming harvest will be an upswing year, including the addition of hundreds of new acres that are expected to contribute to the overall crop year.
OB: To what extent are growers aiming to increase domestic sales of hazelnuts as a result of the pandemic?
GT: HGO [Hazelnut Growers of Oregon] has been working toward increasing our domestic, value-added sales [since] well before the pandemic. We are the only hazelnut processor and agricultural cooperative that has its own nationally dedicated retail brand, called Oregon Orchard.
In addition to this, a significant volume of our business supports domestic kernel sales and other hazelnut applications via U.S. food service and ingredient-manufacturing channels.
OB: Recent growth projections estimate that Oregon’s hazelnut industry will double in the next five years. Are you still expecting that growth trajectory given the pandemic?
GT: Yes. As I mentioned earlier, we don’t see the pandemic staving off the volume we’re expecting to receive and process for the future. Our challenge is going to be addressing the tidal wave of inventory we expect to receive from our farmers and converting it all to meet the consumer demand that we know is out there.
OB: How important are online sales for the new Oregon Orchard products?
GT: Due to the pandemic, we’re now seeing online “everything” supporting life as we once knew it. Without a doubt, the retail landscape must change significantly for all members of the food industry.
Online sales can no longer be considered a new “frontier” for food manufacturers attempting to sell their products into the marketplace.
Online commerce will soon — if [it’s] not already — be regarded as the new direct sales channel. Our brand is no exception. Oregon Orchard is sold on OregonOrchard.com and will soon be on all the major online shopping networks.
That was our goal prior to the pandemic, but it is now underscored as vital in this new era of e-commerce as a direct result of this COVID-19 experience.
To subscribe to Oregon Business, click here.