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Investor Relations

Preparing for the future of almonds: the next 10 years

with Damien Houlahan, Executive General Manager – Almonds, Australia

There is little doubt that almonds are becoming increasingly desirable. Today, they already command a global production value of US$9.5 billion. World consumption has grown 10% each year over the past five years and we are seeing significant growth in demand across both developing and developed markets. In the US alone, almond consumption has grown at 7.5% per annum over the same period and we see strong indicators that sustained growth will continue in the US and in developing markets such as India and China.

This is the primary reason for our presence in both US and Australia to capture growth from both regions.  In Australia, we are the largest grower of almonds across 30,000 acres in Sunraysia and we have invested in a state-of-the-art almond hulling and processing plant in Victoria.

This strong growth is primarily led by an increasing demand for healthier foods worldwide, which has opened up new opportunities for the almond industry in new products, methods of use and application. These include the use of almonds in almond butter, salad toppings, almond milk, confectionery fillings as well as health and energy bars, to name but a few.

As the developing world moves towards a preference for more protein rich diets, almonds are becoming less of a luxury and more of a necessity. Similarly, in developed markets, almonds are now a preferred choice as a healthy snack as more and more studies validate its health and nutritional benefits. We see a growing desire for healthier foods and snacks to counter increasingly common lifestyle issues such as weight gain, high cholesterol, heart disease, obesity and diabetes.

In the US, almonds hold the title of the number one snack nut, largely due to investments into nutritional research. Some US$1.6 million is spent annually in California on the study of the nutrient composition and potential health benefits of almonds. Last year, 12 new research papers were published on the subject, making it 116 scientific publications in total that back the nutritional value of almonds. These studies bring credibility and support sustained growth in demand for almonds.

With such strong fundamentals underpinning the growth of the almond industry, Olam is well positioned to capitalise on the upside with its farsighted and prudent investments into California and Australia. These two locations present Olam with the springboard we require to further build on our position as the second largest producer of almonds in the world.

In California, the state is proactively investing in agricultural research and shaping regulatory approaches to ensure the resilience of the agricultural industry. Together with its rich soils, ideal climate, sustained market research and sustainability data, bee and pollination research, the close proximity to ports and sophisticated water delivery systems, California is ideally placed to address the surge in demand for the nut.

The US$7.5 billion water bond and Sustainable Ground Water Management Act in particular are set to change the face of Californian agriculture. While it is not yet clear how the new regulation will eventually turn out, we are clear that California has a strong will to continue to be the leader in agriculture, including almonds.

Australia too is playing a leadership role. It has grown from a “micro” player to the second largest exporter of almonds in a mere four years. Olam, with a share of almost 45% of the Australian crop, has contributed to instituting and sharing best practices between California and Australia to maximise “more crop per drop” in both locations. Australia’s relatively affordable arable land, sophisticated water management and progressive water policies, advanced soil health and bee-friendly practices make it an ideal location for Olam to have invested in. Recent free-trade agreements, coupled with its proximity to developing and growing markets for almonds such as China and India, as well as the government’s investment into research and technology, further support its attractiveness.

With an ever-increasing demand for almonds, Olam is ensuring that almond growth and production is sustainable. Looking ahead 10 years from now, we know we can make positive contributions and grow this healthy supply chain through our field-to-market expertise, practices and people.