Can the Nut Industry in Georgia Break Through the Global Market Barrier?
Nuts Galore: Overcoming Challenges and Seizing Opportunities in Georgia's Nut Industry
By: Sally Sass for Investor.thug
Investor.thug: nuts, nuts, nuts!
Join us as we dive into the lucrative world of Georgian nut production, where national pride and financial success go hand in hand. Georgian walnut export volumes skyrocketed by a whopping 97% in 2024, pushing prices up by 36% over the last six months to reach a staggering value of $84.4 million. Meanwhile, hazelnut exports surged in price by 37% in the second half of 2024, reaching a value of $73.3 million. And while almond growth is relatively new in Georgia, thousands of hectares of orchards are already replacing imports with their crop, causing a 49% drop in imports in 2024.
Reminiscing around the supra table, Georgians still insist that their almonds are sweeter, walnuts oilier, and hazelnuts rounder and tastier than those from global leaders like California, China, and Turkey. And with EU demand on the rise, a little prosperity is trickling down to the hands of Georgia's many nut-growing peasants.
But despite these thriving success stories, Georgia's nut industry faces substantial challenges. The primary benefactor, USAID, which has aided in raising yields and improving growing and processing standards, is expected to pull out soon. USAID has played a crucial role in educating farmers to meet Western market standards. As a result, EU and US investment plans, built to boost Georgian production to meet increasing international demand, are now uncertain. Additionally, the global nut industry is grappling with the repercussions of rising trade tariffs.
Consumers are largely oblivious to the stormy backdrop in the nut-trading world, brought on by extreme weather caused by climate change and trade tariffs. The steady growth in demand is projected to be around 6% per year, with the nut market globally currently valued at a whopping $70 billion annually. The increase in demand can be attributed to healthier eating trends and a burgeoning variety of nut products on the market, from milks to confections. Almonds and walnuts reign supreme, accounting for 27% and 22% of the total, respectively, according to the International Nut and Dried Fruit Council.
Walnuts: The Star of Georgia
Walnuts are critical to Georgia, holding a special place in the country's culinary culture. Georgians consume an astounding 1.04 kilograms per year, which is eight times the global average. Georgia imports walnuts but has been able to export its top-notch produce in recent years due to higher global prices. Georgia's walnut export volumes soared by nearly 100% in 2024, with prices increasing by 36%. Export volumes rose by 18% to $84.4 million, according to the Almond & Walnut Producers Association.
Georgian walnuts are exported to Italy, Spain, Germany, France, Poland, Czechia, Armenia, China, Turkey, Israel, Russia, and Ukraine. The high demand for Georgian walnuts is a testament to their superior quality.
Walnut production has seen a surge in commercial importance in Georgia only since 2018, primarily due to the large increase in plantings in 2014. While the yields are currently low, they are expected to rise substantially by 2030. There is significant room for improvement in walnut farming, and the introduction of a high-yielding walnut variety, Chandler, in 2015 hasn't garnered the desired results due to factors like a lack of knowledge among farmers, insufficient orchard attention, and improper storage.
Hazelnuts: A Part of Georgian History
With a long history of growing hazelnuts, Georgia boasts a 3% market share, despite facing low orchard productivity. Hazelnut exports jumped by 37% in price in the second half of 2024 and by 17% in volume, mostly going to EU countries like Italy, Germany, Spain, and France. Despite these promising numbers, the industry faces numerous challenges, with the help of USAID ending soon. supporting efforts to raise arboriculture, spraying regularly, and ensuring proper drying of nuts to prevent infestations, mold, and mildew.
Historically, hazelnut orchards covered more ground and played a more significant role in the rural economy than today. Georgia has a timing advantage, with its crops ripe for picking several weeks earlier than those of the large US producers. Native grades of hazelnuts in Georgia have numerous advantages, such as requiring minimal chemical fertilizers and pesticides.
Almonds: A Fresh Market for Georgia
Almonds are a new player in Georgia's nut market, with a negligible market share. Georgia's potential in this sector is significant as major producers like the US are grappling with issues like water scarcity and orchard abandonment. With almonds being one of the highest-priced nuts, opportunities for Georgia to make a mark are many. Current success stories include 2,300 hectares of almonds planted by the Adjara Group, another local group with 700 hectares, and several other up-and-coming growers focusing on export markets.
However, there are challenges ahead, such as the high cost of domestic almonds, which are gradually gaining popularity but have not yet achieved widespread appeal. Currently, the yield is low, with an average of 0.52 tons per hectare against the world average of 1.54 tons per hectare. But as the trees mature, production is expected to increase significantly.
So, what does the future hold for Georgia's nut industry? While challenges abound, opportunities for growth and improvement are plentiful. Capitalizing on emerging market trends, employing sustainable practices, and learning from other regions could help Georgia's nut industry shine in the global market.
By: Sally Sass for Investor.thug
- By 2025, Georgia may aim to significantly increase its hazelnut exports, as the industry has already seen an increase of 37% in price in the second half of 2024.
- While sports may not be a significant part of Georgia's cultural calendar, the nation's lucrative nut industry, particularly its walnut production, could generate enough revenue to fund sports programs in the future.
- In response to challenges faced by the global nut industry, domestic Georgia sports teams might consider partnering with nut industries to create a line of nutritional products, promoting a healthier lifestyle while supporting local agriculture.
