Pacific Nut Producer Magazine

Tag: USDA Foreign Ag Service

  • Unveiling Taiwanese Appetite for Tree Nuts

    USDA Foreign Ag Service — The United States holds 66 percent of Taiwan’s tree nut market, with 2024 imports rising 19 percent to nearly 13,000 metric tons, valued at USD 76 million. Lower 2023 crop costs led to upfront stockpiling, attracting new importers who expanded product variety and premium offerings to differentiate in the market. The core consumer base (ages 45-74) is health-conscious and willing to pay for high-quality tree nut. Taiwan’s aging population, officially becoming an “elderly society” in 2025, is expected to further drive demand.

    Overall Market Overview

    Table 1. Tawan’s Imports of Tree Nuts by Country of Origin (Unit: Ton, Source: Trade Data Monitor)

    The United States remains the dominant supplier of tree nuts to Taiwan, holding 66 percent of the market. In 2024, Taiwan imported nearly 13,000 metric tons of U.S. tree nuts, a 19 percent increase from 2023, reaching USD 76 million (Appendix). This growth is primarily attributed to upfront stockpiling in response to the lower ingredient costs of the 2023 U.S. crop.

    The price advantage encouraged new importers to enter the market, some investing in roasting facilities and launching branded tree nut snacks. This influx of competition expanded product variety, introduced premium product specifications, and widened consumption occasions, aiming to attract younger consumers.

    Product Breakdown (Appendix)

    Almonds and walnuts are the most prevalent tree nuts in Taiwan, together accounting for over half of total imports. Over 95 percent of tree nuts imported into Taiwan are shelled.

    Almonds: Market Leader

    Almonds are the most commonly consumed tree nut, leading both import volume and value. The dominant varieties include nonpareil and carmel, available in diverse forms such as whole kernels, slivers, slices, diced, and almond powder. The United States is the only supplier of almonds.

    Pistachios: Fast Growing Category

    Pistachio imports surged 44 percent in 2024, reaching 2,617 metric tons, fueled by the competitive pricing of the 2023 U.S. crop. Ninety-nine percent of pistachio is imported in shell. The primary demand driver is snack food manufacturing. In Taiwan, pistachios are commonly marketed as festive gifts due to their Chinese name meaning “open your heart,” symbolizing happiness and good fortune during Chinese New Year. The United States is the dominant supplier of pistachios; less than one percent of market share goes to Iran.

    Macadamia Nuts: Premium & Expanding

    Macadamia nut imports hit a record high of 1,562 metric tons in 2024. Despite their high unit cost, they are perceived as a luxury snack, often featured in high-end treats.

    • South Africa dominates the market (65 percent), followed by Australia (28 percent).

    • No U.S. macadamia imports have been recorded since 2020.

    Walnuts: Competitive Pressure from China

    Taiwan imported approximately 4,600 metric tons of U.S. walnuts in 2024, valued at $22 million, with demand fueled by low-cost, high-quality 2023 U.S. crops. The preferred variety and specification are chandler, light-colored halves. China has started aggressively exporting walnuts in 2024, capturing nine percent market share. While California walnuts remain the benchmark for quality, increasing prices in 2024 may shift price-sensitive buyers toward Chinese alternatives.

    Cashews: Most Versatile Across Culinary Applications

    Cashew imports hit record high in 2024, reaching 4,156 tons. Popular as a snack, cashews are also widely used in both Asian and Western cuisines. Vietnam remains the dominant supplier, accounting for over 90 percent of the market, while other suppliers include Cambodia, Indonesia, and Myanmar.

    Pecans: Rapid Growth but Low Market Awareness

    Pecan imports soared 91 percent year-over-year, reaching 457 metric tons in 2024.

    • The United States is the only supplier of pecans. Pecans are primarily consumed as a snack. Common varieties and specifications include fancy mammoth and junior mammoth.

    • Despite growing recognition of pecans as a nutrient-rich superfood, consumer awareness of their distinct flavor and culinary uses remains low. Even the Chinese translation for pecans is often confused with walnuts.

    Hazelnuts: Niche Market with Moderate Growth Potential

    Hazelnuts are mainly used in snack nut mixes and bakery applications, especially as a chocolate complement. Imports grew 42 percent in 2024, but the total volume remains small, under 400 metric tons. Turkey is the only supplier of hazelnuts for the import record of 2024.

    Distribution Channels

    Sixty percent of imported tree nuts are used for snack processing, while 40 percent are utilized in bakeries, where they enhance texture, flavor, and decoration. Consumers purchase tree nuts in various forms, including:

    – Bulk roasted shelled and in-shell nuts (open-air markets, grocery stores)

    – Pocket-sized snack packs

    – Premium gift boxes

    However, rising bakery ingredient costs and a weaker bakery industry have led to reduced tree nut usage in baking, except in seasonal and festive items.

    Consumption Trends

    Since 2018, Taiwan’s Ministry of Health and Welfare has promoted tree nuts as part of a balanced diet via MyPlate. As a result, food manufacturers have successfully positioned tree nuts as a healthy snack. The core consumer base (45-74 years old) is health-conscious and willing to pay for premium tree nuts. Taiwan’s aging population (officially entering an “elderly society2” in 2025) is expected to drive continued demand.

    In the health-conscious Taiwanese market, there is a preference for lightly roasted tree nuts with less salt, emphasizing pure natural flavors for snack consumption. However, given the competitive healthy snack market, manufacturers are exploring new niches to expand product offerings and elevate product value. Some focus on nutrition, some experiment with novel flavors, while some position their products as luxurious, targeting gift-giving consumers. Post observes some emerging product innovations that presents opportunities for the U.S. tree nuts as value-added ingredients:

    Suggestions for U.S. Suppliers

    The growth of U.S. tree nut demand depends on expanding their application beyond snacking and aligning with Taiwan’s shifting demographics, particularly its aging and health-conscious consumers. To drive demand, ATO Taipei suggests the U.S. suppliers:

     Educate the Trade on Versatility: Promote tree nuts for food and beverage manufacturing, not just snacks and baking. Showcase successful U.S. products to inspire local adaptation.

     Capitalize on Bakery & Seasonal Promotions: Establish consistent marketing around a product that highlights U.S. tree nuts, making a lasting industry impact. For example, some importers have successfully marketed Galette des Rois (King’s Cake), boosting demand for almonds and butter.

     Expand into the Plant-Based Beverage Sector: With Taiwan’s vegetarian/flexitarian population and aging consumers driving demand, nut-based beverages offer an alternative to soymilk, a market valued at USD 120 million. Suppliers should emphasize nutritional advantages over soy and provide ready-to-use recipes to encourage adoption.

    Regulatory Updates

    Starting July 2024, Taiwan’s FDA enforces a maximum cadmium level of 0.2 mg/kg for tree nuts. Suppliers should ensure compliance to avoid import disruptions.

    Tariffs and Inspection Requirements

    Taiwan’s Tariff Database Search System

    Other Information

    Taiwan: FAIRS Country Report Annual

    Taiwan: New Consumers Embrace Plant-based Trends in Taiwan

  • California Tree Nut Sector Well Positioned for Growth in Algerian Market

    USDA Foreign Ag Service — The exporter guide provides an economic and market overview, as well as demographic trends and practical tips for U.S. exporters on Algeria. The report provides an overview of the three market sectors – food retail, food service, and food processing in Algeria. Overall, of the total U.S. agricultural exports to Algeria, consumer-oriented products represent 15 percent of the total U.S. exports in 2023. Tree Nuts currently have the best prospects for U.S. consumer-oriented products exported to Algeria.

    Executive Summary: Algeria is a middle-income country and in 2022, its GDP reached almost $200 billion, positioning it as one of the largest economies on the African continent. Encompassing an area of 2,381,741 sq. km, Algeria is also the largest country in Africa by landmass. Algeria’s state-dominated economy is heavily dependent on oil and gas revenues, which historically have provided over 90 percent of export earnings and nearly 40 percent of state revenues. The agriculture sector is one of the priority sectors for the government in its efforts to diversify the economy and attract foreign and domestic investment outside the energy sector. The agriculture sector contributes on average 12percent of Algeria’s GDP and employs 20 percent of the population in rural areas. Algeria’s imports of agricultural commodities and food represented 25.29 percent ($9.9 billion) of total imports ($39.21 billion) in 2023.

    Food Retail Industry: Algeria’s food retail sector is estimated at $37.5 billion and is highly fragmented. Consumers shop for bulk, packaged and high value products, both local and imported, in small, privately owned supermarkets called “superettes”. Algeria’s largest private-sector conglomerate Cevital, operates 23 grocery stores under the brand name UNO. International retail chain Carrefour is also present.

    Food Processing Industry: The government divested itself from agricultural production and processing allowing the private sector to take the lead. The private sector is comprised of wheat and feed millers, dairy processors, vegetable oil refiners, sugar refiners, beverage producers as well as canners, and a pastry industry. The distribution and HRI sectors are growing however need further development.

    Food Service Industry: Revenue in the food market amounts to $17.4 bn in 2024. The market is expected to grow annually by almost 10 percent (CAGR 2024-2028). The largest segment is the Confectionery & Snacks with a market volume of US$2.8 bn in 2024. In the Food market, 0.9 percent of total revenue will be generated through online sales by 2024. In the food market, volume is expected to amount to 5.75 bn kg by 2028. The food market is expected to show a volume growth of two percent in 2025. The average volume per person in the food market is expected to amount to 115 kg in 2024.

    Section I: Market Overview

    Algeria is a middle-income country whose state-dominated economy is heavily dependent on oil and gas revenues, which historically have provided over 90 percent of export earnings and nearly 40 percent of state revenues. These revenues have funded a generous social safety net through food, fuel, housing, health, and education subsidies. The World Bank estimates that Algeria’s GDP grew 4.1 percent in 2023, though inflation reached over 9.3 percent. In 2024, the World Bank expects GDP growth to slow due to stagnant oil and agricultural output, before rebounding in 2025. The IMF estimates the national economy at around $200 billion.

    The government’s economic development plan centers on diversification away from the energy sector, with a particular focus on agriculture. Algeria leans on protectionist trade policies to encourage development of local industries and to control the current account deficit. The import substitution policies are often announced without warning, and tend to generate regulatory uncertainty, supply shortages, increased prices, and a limited selection for consumer goods. Nevertheless, food imports have been trending up sparked by growing consumer demand.

    Food accounts for just over 40 percent of Algerian household spending, and mainly concerns relatively unprocessed basic products. The government subsidies staples such as sugar, soybean oil, bread, semolina and pasteurized milk which encourages high consumption of these products. In Algeria, generally, the price determines the consumption. Purchases are often made from small retailers even though supermarkets and shopping centers are growing. Since the Covid-19 pandemic and the war in Ukraine, inflation and price increases have negatively impacted consumer confidence.

    Online commerce and restaurant take out is growing, especially since the Covid-19 pandemic, and consumers are increasingly attracted by easier and faster ways of buying. However, online payments are extremely limited; most consumers place the order online or via phone and pay in cash to the delivery driver. More than half of the population has internet and is active on social networks. However, purchasing decisions on networks are not as developed as in Europe or the United States. The Algerian diet is based on a Mediterranean model. Algerians are big consumers of cereals (durum wheat, semolina, bread, couscous, etc.), pulses (lentils, beans and chickpeas), fruit and vegetables, olive oil, with little meat, as well as products derived from milk, eggs, fish. Algerians have traditionally eaten lamb and poultry. In the south, camel meat is also consumed.

    While Algeria’s society remains dominated by traditional family institution, socioeconomic changes are driving noticeable shifts in consumers’ consumption preferences and the food retail landscape. The population has quadrupled in 60 years, reaching over 45 million inhabitants in 2023. As of 2022, Algeria’s urban population was estimated to be over 70 percent of the total population. Overall, the participation of Algerian women in the workforce is gradually increasing, driven by improvements in education, changes in societal attitudes, and supportive government policies. In the urban centers, the younger generation is increasingly following global trends seeking out fast food, chawarma, and snacks as well as sweetened drinks. In April 2024, a Lebanese group AZADEA opened the first KFC restaurant in the capital. Pizza Hut, Subway, Coca Cola, PepsiCo, Nestle, and Heineken are all present in Algeria.

    Advantages and Challenges

    Potential exists for U.S. exporters to obtain a share of the Algerian market and participate in its further development.

    Section II: Exporter Business Tips

    General Consumer Tastes and Trends: Algeria has one of North Africa’s highest per-capita expenditures on food thanks to relatively high disposable incomes and consumers’ strong preference for convenient, quality, and premium food and beverages. Algerian households devote more than 40 percent of their annual expenditure to food needs. Consumer tastes and preferences are changing, especially in the cities where young homemakers tend to be more active, and the number of working women has increased. As a result, consumers are turning to ready-to-eat or semi-processed products. Although some people are attracted by the organic and healthy diets, dietary habits are changing to a diet richer in animal fat and sugar.

    Market Research: For the most part U.S. exporters are not familiar with the Algerian market and its regulations, and the same is true for Algerian importers seeking U.S. products. U.S. exporters should inquire about all the regulations and the Algerian market structure before starting business or shipping goods. They can identify a potential importer, distributor or a consultant who is aware of the business culture and the market structure, who knows the food and retail sectors’ players and can execute all the necessary steps and resolve any issues on the ground on behalf of the U.S. company.

    Market Structure: The structure of the market is detailed in section IV below. Overall, the food retail and distribution sector are developing. Supermarket industry is growing, albeit slowly. Local food manufacturing industry is fundamentally dependent on imports of ingredients and raw materials. Most of these sectors are exclusively controlled by private businesses. Most of the supermarkets, hotels and food retail stores do not import directly, but purchase from local wholesalers and importers. Large food processors import their own ingredients. Most importers are in large cities and import through the ports of Algiers, Oran, Bejaia, Mostaganem and Jijel. They import both bulk and packaged products. The products are distributed to wholesalers and then sold in small stores, supermarkets, and wet markets. Algeria uses the metric system. French and Arabic are the predominant business language.

    Section III: Import Food Standards, Regulations and Procedures

    Import food standards and regulations as well as import procedures can be found in the FAS Food and Agricultural Import Regulation and Standards Reports.

    Fairs Annual Country Report

    Fairs Export Certificate Report

    Section IV: Market Sector Structure and Trends

    Food Retail and Distribution: Private businesses control retail trade almost exclusively. Since the economy was liberalized in the 90s, consumers became accustomed to seeing imported products and semi-processed products sold in grocery stores and small private supermarkets. Consumers shop for bulk, packaged and high value products, both local and imported, in small supermarkets called “superettes”. Private wholesalers are increasingly active in the food sector. The private sector is also trying to expand distribution channels, as well as the hotel restaurant institutional (HRI) sector.

    Overall, the supermarket industry is still in its infancy. The Ministry of Commerce has also invested in the construction of smaller, urban retail spaces that meet industry standards to strengthen the regulation of the retail network to ensure price stability, especially for food staples. According to the 2016 data available by the Algerian Register of Commerce, there were 1,415 retail markets in the country, 38 Hypermarkets, 1,919 superettes and 232 supermarkets. Only three large private supermarket chains (UNO, ARDIS, FAMILY SHOP) exist in the capital and four other main cities of the country. The French chain Carrefour is also present in Algeria.

    The Algerian food sector could also develop much more quickly if modern distribution was itself sufficiently developed. While large and medium-sized firms are modernizing, many small firms do not master processes, traceability, filling and packing, international standards or banking and tax procedures. Food industry firms must sometimes manage their own distribution networks themselves and provide assistance to their wholesalers to enable them to acquire their equipment.

    Food Processing: The government has committed to divesting itself from agricultural production and processing. Private processors continue to grow, and many are offering products at lower prices by importing raw materials and processing them locally. The private sector is active in wheat and feed milling, dairy processing, vegetable oil refining, sugar refining, beverage production, canning, and the biscuit industry as well as soybean crushing plants.

    The local food manufacturing industry is fundamentally dependent on imports of ingredients and raw materials. In addition, population increase, growing demand for convenient processed foods, as well as improved production capacities favor the expansion of the food processing industry. These conditions support demand for ingredients and create opportunities for increased U.S. exports into Algeria.

    Milling and Dairy industries: Wheat is the major staple food followed by dairy. Several mills and dairy plants are operating in different regions of the country with varying capacities. These enterprises are increasingly interested in U.S. products and expertise.

    HRI sector: This sector is growing however still needs further expansion. The opening of five-star international hotel chains as well as local four-star and three-star hotel chains increases demand for inputs and ingredients. Domestic fast food and new restaurants chains are growing as well.

    Beverage, Canning, Snack and Biscuit industries: The local food processing industry is improving and upgrading. They are aware of the need for consistent quality and regular supply of higher quality inputs. This sector represents a good prospect for U.S, suppliers of ingredients. This is an opportunity for U.S. expertise and food ingredients exports. The food industry and ingredient show “Djazagro ” newsletter indicated that the food market revenues in Algeria amounted EUR 10.8 billion in 2022. The largest market segment is confectionery and snacks, with a market volume of EUR 2.4 billion in 2022.

    In the food market, 1.8 percent of total revenue will be generated by online sales by 2022. In the Food market, 0.9 percent of total revenue will be generated through online sales by 2024.The Food market volume is expected to amount 5.75bn kg by 2028 and the volume growth is expected to reach 2.0 percent in 2025. The average volume per person in the food market is expected to amount to 114.70kg in 2024.

    The newsletter reported that the revenue of the soft drinks market amounted EUR 1.9 billion in 2022. The largest market segment is carbonated soft drinks with a market volume of EUR 1.4 billion in 2022. The revenue of the hot beverages market amounted EUR 2.6 billion in 2022. The market is expected to grow at a compound annual growth rate (CAGR) of 0.61% per annum (2022-2025). The largest market segment is coffee, with a market volume of EUR 2.2 billion.

    More information on the food, retail, distribution and beverage market trends can be found at this year’s edition of Djazagro Show newsletter.

    Section V: Agricultural and Food Imports

    Agricultural and Food Import Statistics

    Unfortunately, the Algerian Customs website has not published any trade figures since 2020. The sole import figures available are from 2020. Algerian imports of agricultural commodities and food represented about 23.52 percent ($8.09 billion) of total imports ($34.39 billion) in 2020. Wheat and dairy are the top food imports. Algeria is one of the world’s largest importers of wheat and dairy products. The other products were represented by (sugar and confectionary, coffee and spices, food preparations, food industry residues, edible fruits, legumes, roots and bulbs, live animals and tobacco and processed tobacco.

    Data from the Trade Data Monitor (TDM) shows that Algeria’s total imports of consumer-oriented the last five years has remained fairly stagnant. However, staple food (wheat and dairy products) remains dominant compared to consumer-oriented products.

    Trade Data Monitor (TDM) chart below shows the top exporting countries of consumer oriented agricultural products to Algeria. EU countries remain the main supplier of finished food products to Algeria. The U.S. is at a geographical disadvantage, due to Algeria’s proximity to Europe. Additionally, there are no direct shipping lines from the U.S., making transit through Europe necessary. Moreover, the EU-Algerian Association Agreement provides preferential access to some commodities making relatively high cost for U.S. food and agricultural products compared to imports from other countries.

    Best High-Value, Consumer-Oriented Product Prospects

    Most of the U.S. agricultural exports to Algeria are bulk and intermediate commodities. Consumer oriented products represent only 15 percent of the total U.S. exports to Algeria in 2023. In calendar year (CY) 2023, the main U.S. agricultural exports to Algeria were wheat, soybeans, tree nuts, soybean meal, planting seeds, feed & fodders, forest products, dairy products, pulses, as well as live animals (turkey day-old chicks and hatching eggs).

    As shown in the chart below, the best prospects for U.S. consumer-oriented products are tree nuts at the top of the list showing an upward trend.

    Tree nuts: Demand for tree nuts remains high, especially since additional import tariffs (DAPs) on tree nuts and dried fruits was removed since 2019. Imports are not hampered even by price increase as shown in the chart below. The figures below indicate that despite the increase of prices over the years, volumes increased.

    The United States remains the leading exporter of tree nuts to Algeria. (See U.S. Exports chart below). For more information, please review the FAS Tree Nuts Report.

  • Israel May Seek U.S. Pistachio & Vegetable Imports Due to Turkish Trade Ban

    USDA Foreign Ag Service — Turkey, Israel’s third largest foreign supplier of imported agricultural and related products, recently announced a ban on all trade with Israel due to the regional conflict. Accordingly, Israeli importers may look to source certain agricultural imports from elsewhere. Israel’s leading agricultural and related imports from Turkey include fresh and processed agricultural produce—specifically tomatoes, olive oil, cucumbers, onions, and eggplant. For the United States, pistachios may be in greater demand as Turkey is the only other foreign supplier to the Israeli market.

    Turkey Bans all Trade with Israel

    On May 2, 2024, Turkey announced a ban on all trade with Israel due to the “worsening humanitarian tragedy” in Gaza. According to the Turkish Minister of Trade, the ban will be lifted when a sufficient flow of humanitarian aid flows into Gaza. As a result of the ban, the Israeli government is looking to increase domestic production, Israeli importers are looking for new or expanded sourcing for certain agricultural imports, and regional media reports some Israeli importers are looking for alternative routes to circumvent the ban from Turkey.

    Depending on its length, the trade ban could significantly impact the Israeli market as Turkey is a strong trading partner due to its geographical proximity, a bilateral free trade agreement established in 1996, and competitive prices. Moreover, in the past six months, many Israeli importers looked to increase imports from Turkey as trade via the Red Sea has been disrupted by Houthi attacks on vessels passing through the Bab al-Mandab Strait.

    Turkish Exports to Israel

    In calendar year 2023, total Israeli imports from Turkey were valued at roughly $5.3 billion (5.7 percent of total Israeli imports). For agricultural and related products, Turkey was the third largest foreign supplier to Israel, after Russia and the United States. Israel imported $543 million in agricultural and related products from Turkey (5 percent of the total value of its agricultural and related imports) in 2023.

    As seen in the chart below, Turkish tomato exports represent the largest agricultural export to Israel. However, sourcing for other agricultural products, such as olive oil, sunflower seeds, and certain types of fish, may also be impacted. Furthermore, a quick increase in Israeli production for some agricultural products would be difficult to realize as it could take many months or years to sufficiently supply gaps.

    For the United States, pistachios may see increased opportunities as Israel only imports pistachios from Turkey and the United States (Note: Total value of Israeli imports of pistachios totaled $40.5 million in 2023).

  • New Farm Bill Priorities Supporting Specialty Crop Agriculture

    As legislature continues to work on completing a new Farm Bill, specialty crops may reap greater representation and benefits than in any previous Farm Bill.  Watch this brief video featuring Philip Karsting from Olsson Frank Weeda as he discusses their priorities for specialty crop ag at a recent conference held by American Pistachio Growers.

    Special thanks to American Pistachio Growers for sponsoring this video.

  • Opportunities to Grow Tree Nut & Wine Exports in Serbia

    Serbia offers good opportunities for the U.S. exporters of consumer-oriented agriculture products. From January-October 2023, total U.S. exports of agriculture products to Serbia reached $22.6 million, an increase of about 16 percent compared to the same period in 2022. The most significant commodities traded were almonds, whiskey, bourbon, tobacco, sweet potato, pistachios, peanuts, vegetable planting seeds, pet food, cranberries, juices and extracts from hops, wine, dietetic foods, concentrated proteins, snacks food, fish, and seafood products. This report provides U.S. food and agriculture exporters with background information and suggestions for entering the Serbian market. The statistical data are as of October 2023.

    The World Bank (WB) ranks Serbia as an upper middle-income economy based on the Gross National Income per capita of the previous year (2023). Serbia is ranked 35th among the 39 countries in Europe. Moreover, the International Monetary Fund projected real GDP change at 2 percent in 2023. The total GDP is projected at $75 billion. Serbia is a developing country with a vibrant agriculture and food industry which contribute to almost 10 percent of total GDP. In 2023, the average annual inflation rate is expected to be 8.5 percent. Serbia has Free Trade Agreements with the European Union (EU), Turkey, and the Eurasian Economic Union (Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan). It is also a signatory to the Central European Free Trade Agreement (CEFTA). January-October 2023 Serbia’s total agri-food exports reached a value of $4.1 billion, a decrease of 8 percent from the same period in 2022. The total agriculture imports in 2022 were valued at $2.9 billion, a decrease of 3 percent compared to the same period in 2022 with a registered $1.2 billion surplus.

    In the January-October 2023 period, agri-food imports were $2.9 billion, a 3 percent decrease compared to the same period in 2022. Over 60 percent of imports come from the EU member states, while 30 percent come from the CEFTA member countries. The total U.S. agri-food exports to Serbia for the January-October 2023 period were valued at $22.6 million, with an increase of about 16 percent compared to 2022. One major obstacle to increasing the U.S. market share in Serbia a is 30 percent customs import tax on most agri-food products, compared to zero import taxes for products from countries with whom Serbia has signed FTAs (about 90 percent of Serbian trade partners). Essential commodities imported from the U.S. include almonds ($4.9M), whiskey bourbon ($3.5), consumer products ($2.6M), pistachios ($2.5M), tobacco ($1.4M), peanuts ($860,000), baby food ($605,000), vegetable seed ($580,000) and hake ($520,000).

    Serbia is the largest agricultural market in the Western Balkans, with strong agricultural production and food processing tradition. Serbia is a global leader in the production of non-GMO corn and raspberries. The food processing industry accounts for approximately one-third of Serbia’s processingindustry. Over 20,000 food businesses are operational, and about 90 percent are micro, small, or medium-sized enterprises. This industry employs more than 120,000 people and is a rare example of a sector that has not been hit adversely by the economic crisis during COVID-19 pandemic. The largest subsectors in Serbia by value are dairy, meat, fruits, vegetables, wine, and confectionery industries.

    Food retail revenue in the Serbian market is approximately $9 billion a year, which represents a relatively small market. Foreign retail chains hold more than 80 percent of the total retail market, mainly divided between Dutch-owned Delhaize (owner of retail chains Maxi and Tempo) and the Croatian Fortenova Group (owner of retail chains Idea, Roda, and Mercator). Other international retail chains include Germany’s Metro, Lidl, and Greece’s Super Vero. Domestic retail chains represent only some 20 percent of the Serbian market: Dis, Univerexport, and Gomex. More than 50 percent of all food products are still sold through small grocery shops (estimated to number close to 30,000). Due to significant changes in consumer behavior during the COVID-19 pandemic, online retail increased by almost 600 percent since March 2020. Delivery services also expanded their business in Serbia by more than 400 percent over the past 3 years.

    Economic Situation

    The Serbian economy is rebounding from last year’s energy price shocks, despite continuing adverse economic conditions both regionally and globally. Economic growth is expected to reach 2 percent in 2023, increasing to 3 percent in 2024 as domestic demand recovers. Unemployment is at an all-time low. Inflation rose to 16 percent in February 2023, which was slightly higher than expected, led by higher food and energy prices. Average inflation in 2023 is expected to be 8.5 percent mostly driven by cost-push pressures. Additional challenges include the performance of the Serbian energy sector and the availability of electricity and gas in the winter of 2024, as well as the rising cost of financing the fiscal deficit and debt obligations considering higher interest rates. With limited space for future stimulus packages, structural reforms are needed to bring the economy back to sustained and growth, boost jobs and incomes. Currently, almost 60 percent of the population’s income is spent on food it is expected to be even more during 2024.

    Serbia needs to make further changes to its regulatory policy, mainly in accordance with the 2023 European Commission (E.C.) Annual Progress Report for Serbia published on November 8, 2023, https://neighbourhood-enlargement.ec.europa.eu/serbia-report-2023_en. According to the report Serbia made limited progress overall. The capacity to pursue key challenges in trade policy needs to be strengthened, to move forward with accession to the World Trade Organization (WTO), where again no progress was made. In October 2023, Serbia provided an updated list of actions to be taken in the context of the WTO accession process as part of the action plan on its remaining legislative alignment with the EU acquis. In the coming year, Serbia should adopt a WTO-compliant law on genetically modified organisms, to move forward with remaining bilateral market access negotiations and towards finalization of its accession to the WTO.

    Overall Business Climate

    Serbia is an open economy with a strategic geographic location that makes it an attractive destination for investment and exports. Serbia has easy access to both EU and non-EU markets, a highly skilled and educated force, and solid infrastructure that has led many global companies to establish manufacturing and service facilities (see Serbia’s Country Commercial Guide https://www.trade.gov/country- commercial-guides/serbia-market-overview?section-nav=5477 ).

    Recent Trends

    The local and regional media frequently publish articles detailing consumers perceived (and actual) discrepancies in the quality of identically branded food products sold in Western Europe and Serbia. Concerns about ingredients and lower quality also have a strong influence on buyers’ confidence in imported products. This “dual ingredient” issue is common in Central and Eastern European countries. Most consumers have adjusted their eating habits and diet for health reasons, increasing health consciousness. Price remains the most important factor affecting purchasing decisions.

    Serbian consumers are increasingly purchasing online especially cross-border retail for lower prices and this segment is expected to grow at an annual average rate of over 10 percent over the course of the next five years. Currently, e-commerce is 5 percent of total retail turnover at about $500 million a year with 2.9 million online shoppers. The number of shoppers is expected to increase to 3.9 million by the end of 2024. Read the full report from USDA Foreign Ag Service HERE.

  • Cracking Open New Markets for California Almonds

    USDA Foreign Ag Service — If you committed to eating healthier this new year, chances are you are not alone. New year resolutions focused on living a healthy lifestyle are some of the most common resolutions made throughout the world. Thankfully sticking to that new year resolution in 2024 just got easier for international consumers, thanks to increased exporting opportunities for U.S. almonds to Europe and Asia.

    U.S. almonds are a nutrient-rich food, packed with protein, fiber, vitamin E, calcium, copper, magnesium and riboflavin. All commercially produced almonds in the United States are grown in California, which is home to more than 7,000 almond growers and processors.

    The popular tree nut, considered a specialty crop in the agricultural industry, is the State’s leading agricultural export. In 2022, U.S. almond exports to the world totaled $4.5 billion. This tree nut is also heavily rooted in many family trees, as almond farming is a “family-driven” agricultural industry in California.

    “About 90 percent of almonds are grown by family operations, many of which are multigenerational,” explained Julie Adams, Vice President of Global Technical and Regulatory Affairs for the Almond Board of California, in a recent conversation. “Communities throughout the Central Valley depend on ag in general, and almonds in particular to contribute to their overall economic wellbeing.”

    For these family operations in California, overseas markets have become a critical component to their success and bottom line. An astounding two-thirds of California’s almonds are exported. So no matter how you crack it, almond exports are a crucial portion of revenue for California producers, “and keeping strong and diverse market opportunities is essential to long-term profitability,” said Adams. Especially, “in the Central Valley, where many communities have been suffering the economic effects of increasing crop input costs and lower returns.”

    This is where USDA’s Foreign Agricultural Service (FAS) comes into play for almond exporters and the Almond Board of California. FAS – with its network of offices and attachés around the world – helps open and expand markets for U.S. agricultural exports. For example, just recently FAS identified fresh market opportunities in Italy and Bulgaria. Through its close partnerships with U.S. cooperators, including the Almond Board of California, and foreign buyers, California almond exports to Italy and Bulgaria in 2024 are expected to grow by millions of dollars.

    India is another almond market with exciting growth opportunities. Last year, India removed retaliatory tariffs on U.S. almonds and other products. The impact of removing that trade barrier is already being seen in the export market, and the value of U.S. almond exports to India is expected to reach $1 billion in 2024.

    “India is our number one export market,” noted Adams. “It has grown significantly because of our long-term commitment, promotions, and ongoing relationships with customers and consumers. Almonds are unique, in that they are an integral part of India’s history and culture – we’ve leveraged that tradition in our marketing efforts and supported it through investing in nutrition research in India.”

    These opportunities for market growth are some of the bright spots that FAS has identified for 2024 as the agency works to advance USDA’s goals for diversifying and enhancing international markets for American farmers, ranchers, agribusinesses, and exporters.

    USDA also recognizes that for agribusinesses, especially small businesses, entering the export market can be a tough nut to crack. That is why FAS works closely with state and regional agricultural trade groups to help U.S. agribusiness owners grow their company’s revenue through exporting. One way of doing this is through USDA’s market development programs, like the Foreign Market Development (FMD) program and Market Access Program (MAP). FAS just announced MAP and FMD funding allocations for FY24, which will have an immediate impact on helping expand U.S. exports to markets across the globe.

  • Opportunities for U.S. Ag Products in India (Tree Nuts Included)

    USDA Foreign Ag Service — India is the world’s most populous country and boasts one of the fastest growing economies in the world. As Indian households continue to reach higher levels of consumer spending, imported agricultural products are becoming more accessible to a larger number of people. U.S. agricultural exporters wanting to enter India’s market will have numerous opportunities to help meet this growing demand for imported food and agricultural products.

    Top agricultural prospects for U.S. exporters include cotton, dairy products, ethanol, fresh fruit, forest products, processed food and beverages, pulses, and tree nuts. Recent policy changes will expand market opportunities for important U.S. products, including newly reduced tariff rates on pecans, and the removal of retaliatory tariffs on almonds, apples, chickpeas, lentils, and walnuts. Reductions to India’s most-favored-nation (MFN) rates for blueberries, cranberries, frozen turkey, and frozen duck are expected in 2024. Looking ahead, India has tremendous potential to be a large consumer of many of the high-quality and diverse agricultural products that the United States has to offer.

    Macroeconomic Perspective

    India is the most populous country in the world with an estimated population of 1.4 billion in 2023, according to the United Nations, and accounts for 18 percent of the total global population. Since the beginning of the 21st century, India’s population has grown substantially. While it is not the fastest growing country by percentage basis during this period, India has grown by the largest number of people with an increase of  400 million since 2000.

    Key to India’s prospects as a destination for U.S. food and agricultural exports are 1) its growing gross domestic product (GDP), 2) consumer spending, and 3) urbanization. Following a period of decline during the COVID-19 pandemic, India’s real GDP recovered in fiscal year (FY) 2021 (October-September), and in FY 2022 it grew at an estimated 6.9 percent – among the highest of any country. At the same time, Indian households have been increasing consumption spending – a trend that is expected to continue. S&P Global forecasts that during the next 5 years, Indian households will become the biggest spenders among the G20 economies, driven by compound annual spending growth averaging 6.6 percent per year (compared to the G20 average of 2.7 percent). Finally, despite slowing slightly in recent years, India’s urban population has continued to grow. In 2022, the World Bank estimated that 508 million Indians (around 36 percent) live in urban areas, up 2 percent from 2021.

    India’s population and these macroeconomic factors are important parts of what make India a strong future prospect for U.S. exports. In addition to population growth, a rapidly expanding distribution and retail network are making imported food and other agricultural products more accessible to a higher proportion of people. India has potential to be a large consumer of many of the high-quality and diverse agricultural products that the United States has to offer. This will become increasingly critical as India’s ability to feed its growing population on its own will be challenged by the impact of climate change on its production capabilities. India is already confronting production problems resulting from depleted water reserves, soil degradation, increasingly erratic weather, and labor migrating to urban areas.

    Agricultural Trade Overview

    Top India Agricultural and Related Product Imports from the World
    Million USD, Fiscal Year (Oct-Sep)

    Agricultural & related products includes all agricultural products plus forest products, seafood, and biodiesel.
    Source: Trade Data Monitor, LLC – BICO HS-6.

    In FY 2023, India imported $37 billion of agricultural and related products from the world. In the past 5 years, India’s imports have grown substantially, up by $12.5 billion (51 percent) from FY 2019. India is ranked as the eighth largest global importer of agricultural and related products. Proportional to its population, India imports a relatively small value of products. Comparatively, China, a country with a similar population size, imported $262.7 billion during the same period. Currently, India ranks behind much lower population countries like Canada and South Korea in total agricultural and related imports. This relatively low level of imports suggests good opportunities for future growth.

    Much of India’s import growth in recent years can be attributed to the growth of vegetable oils, by far India’s top imported agricultural product. Imports of vegetable oil increased by $9 billion, nearly doubling in 5 years, to a total of $18.4 billion in FY 2023. Palm oil, a product that the United States does not produce in substantial quantities, comprises more than half of India’s vegetable oil imports, totaling $9.9 billion in FY 2023. Soybean oil is India’s second most imported oil, totaling $4.8 billion and comprising more than a quarter of vegetable oil imports in FY 2023.The United States has occasionally been a supplier of soybean oil to India when market conditions are favorable, including in FY 2022, but imports face stiff competition from other substitutable oils like palm and sunflower, and from imports from India’s traditional soybean oil suppliers, Argentina and Brazil.

    Tree nuts were the second largest category of imported products in FY 2023, reaching $2.8 billion. India’s top imported type of tree nuts were cashews, valued at $1.4 billion, which are generally imported for processing from growing countries like Cote d’Ivoire and Ghana. India is a major producer and exporter of shelled cashews. India’s second most imported type of tree nuts were almonds, a vast majority of which were supplied by the United States, valued at $932 million. These were followed by pistachios, valued at $201 million, and areca nuts (also known as a betel nut, a chewed product consumed in many South and Southeast Asian countries), valued at $156 million.

    India is the world’s largest importer of pulses, a category which contains legumes, such as lentils and beans. Pulses are a major source of protein in India, particularly for the country’s large number of vegetarians. India imported $2.6 billion of pulses in FY 2023. Lentils were the top exported pulse, valued at $1.0 billion. Lentil imports increased significantly during the past 5 years, up by $748 million (286 percent) from $262 million in FY 2019. Other major pulse imports included pigeon peas, valued at $792 million, and mung and urad beans, valued at a combined $555 million. India is a large consumer of pulses, and supplements with imported product when domestic production is insufficient. Top suppliers include Burma, Canada, and Australia.

    Other major agricultural and related products imported in FY 2023 include forest products ($2.3 billion), industrial alcohols and fatty acids ($832 million), and sugar and sweeteners ($821 million). The European Union is India’s top supplier of forest products, providing mostly planks of pine, spruce, and fir. India also imported a large value of tropical woods and veneers from Malaysia and Indonesia. Industrial alcohols and fatty acids, ingredients used by both the food industry and in the production of cosmetics and detergents, were mostly imported from Indonesia and Malaysia. Nearly 95 percent of India’s imports of sugar and sweeteners were from Brazil in the form of raw cane sugar.

    Opportunities for U.S. Exports

    Top U.S. Agricultural and Related Product Exports to India; Million USD Fiscal Year (Oct-Sep)

    Source: U.S. Census Bureau Trade Data – BICO HS-10

    India, despite its rapidly growing economy and population growth, remains a price sensitive market. U.S. export growth, without the further removal of tariffs, will remain constrained. India is negotiating and agreeing to free trade agreements with several U.S. competitors, including Australia and the United Kingdom. Competitors, for example, were able to take advantage of the Section 232 retaliatory tariff restrictions to gain market share; despite many retaliatory tariffs being lifted in 2023, it will be challenging to regain market share for the impacted products.

    Opportunities for Bulk, Intermediate, and Agriculture Related Products

    In FY 2023, $267 million of bulk products comprised 14 percent, $340 million of intermediate products comprised 28 percent, and $110 million of related products (including forest products, seafood, and biodiesel) comprised 6 percent of total U.S. agricultural and related exports to India. Major exported bulk products, consisting of commodities which have received little or no processing, included cotton ($237 million) and soybeans ($26 million). Major exported intermediate products, consisting of commodities which have received some processing but are generally not ready for final consumption, included ethanol ($148 million), essential oils ($56 million), miscellaneous feeds, meals, and fodders ($29 million), and dextrins, peptones and proteins ($27 million). Major exported agriculture related products included forest products ($81 million), and seafood ($29 million).

    Bulk, intermediate, and agriculture related products with high potential for U.S. exporters include pulses, cotton, ethanol, forest products, and seafood.

    Pulses, as outlined in the previous section, are one of India’s top imported product groups. The United States is not a top supplier to India, despite being the world’s fourth largest exporter of pulses in FY 2023. Less than $1 million of the United States’ $880 million total pulse exports went to India. This is down significantly from the record year, FY 2014, when the United States exported $174 million of pulses to India. A major constraint in recent years was the imposition of Indian retaliatory tariffs affecting major U.S. pulse products in 2018. Retaliatory tariffs on U.S.-origin chickpeas and lentils were removed in 2023, allowing U.S. pulses to resume competitiveness and paving the way for increased exports to India. Restrictions facing imported yellow peas and lentils have also been eased, exempted from duties through March 2025.

    Cotton is another high-potential product for U.S. exporters. India is a major producer, consumer, exporter, and importer of cotton. The United States is India’s top supplier of cotton. India’s large domestic textiles sector relies on imported cotton to meet demand, as domestic supply is not consistently sufficient for all types of cotton. In particular, India is a major consumer and importer of long and extra-long staple cotton. While India was only the seventh largest destination for U.S. cotton in FY 2023, it was the largest destination for U.S. extra-long staple Pima cotton, accounting for $122 million of the total $283 million exported to the world. As India’s textile sector continues to grow, U.S. exports will fill an important role supplying cotton, especially high-quality long and extra-long staple products. However, it is important to note that cotton imports overall face tariffs that significantly limit market access.

    Ethanol is imported by India for medical and industrial uses, and the United States has long been the top supplier, most recently capturing 84 percent of the import market in FY 2023. Importing ethanol for fuel blending is prohibited. India is a major producer of ethanol, with a large potable market as well as many industrial uses. In recent years, domestic production supports its ambitious fuel blending mandate. Ethanol is used in manufacturing to produce disinfectants and hand sanitizers (which recently saw a spike in world production and use due to the COVID-19 pandemic), as well as solvents, carriers in foods and cosmetics, commercial deicers, pharmaceuticals, and organic chemicals. Growth in India’s manufacturing of these products will boost import demand, providing growth opportunities for U.S. exporters.

    Forest Products and Seafood, which are not included in USDA’s definition of agriculture but are considered related products, are among the top products exported from the United States to India. Nearly half of all U.S. forest product exports in FY 2023 were pine logs, while much of the remainder was pine products such as planks. Demand for forest products is driven by a few large furniture manufacturers and many small-scale handicraft producers. Generally, consumers are very price conscious. India is a growing market for U.S. forest products, reflecting growing demand for building materials, which will likely continue in the coming years. U.S. seafood exports in FY 2023 were led by shrimp, with $17 million exported to India. India is one of the world’s largest exporters of seafood, but also imports a variety of seafood products from many suppliers. Demand for further variety may provide opportunities for U.S. exporters to supply products not produced domestically in India.

    Opportunities for Consumer-Oriented Products

    In FY 2023, consumer-oriented products comprised around 61 percent of total U.S. agricultural and related product exports to India. Major consumer-oriented products, consisting of products that are generally ready for final consumption, included tree nuts ($1 billion), and dairy products ($39 million).

    Consumer-oriented products with high potential for U.S. exporters include tree nuts, fresh fruit, dairy products, and processed food and beverages.

    Tree Nuts were the top U.S. product exported to India in FY 2023, accounting for more than half of all agricultural and related product exports. India is a major market for the United States’ top three exported tree nuts: almonds, pistachios, and walnuts. In FY 2023, almond exports reached $834 million, while exports of pistachios reached $145 million, and exports of walnuts reached $24 million. Like pulses, tree nuts were also impacted by retaliatory tariffs imposed by India in 2018. The retaliatory tariffs were removed for almonds and walnuts in fall 2023, allowing for market access and continued growth for the top U.S. products exported to India. Future prospects are also strong for U.S. pecans, which were reclassified and assigned a new reduced tariff in summer 2023.

    Fresh Fruit was previously a top U.S. product group exported to India, reaching a record $176 million in FY 2018, but declined in recent years following retaliatory tariffs imposed on U.S. apples in 2018. Apples make up the majority of U.S. fresh fruit exports, comprising 95 percent in FY 2018. Fresh fruit exports in FY 2023 totaled only $3 million. With the removal of retaliatory tariffs in 2023, U.S. apple exports can reestablish their market opportunities, and work toward setting new records in the future. India also recently agreed to reduce MFN tariffs on several products including cranberries and blueberries which should benefit U.S. fresh fruit exporters when implemented in 2024.

    Dairy Products are widely consumed in India, and most are supplied by domestic production. Policy restrictions limit the amount and type of dairy products eligible for import. Despite this, India imported a substantial amount from the world in FY 2023, valued at $363 million. Dairy products are also among the top U.S. products exported to India, with exports consisting mostly of milk albumin (such as concentrates of two or more whey proteins) and lactose. These products, used in manufacturing, are often destined for non-food uses such as pharmaceuticals and in the production of dietary supplements. Milk albumin and lactose are India’s top imported dairy products from the world, and imports have grown substantially in recent years. The United States has a relatively small market share in this segment of India’s dairy imports, behind the European Union and New Zealand.

    Processed Food and Beverages, including products such as snack foods, sauces and condiments, prepared foods and ingredients, and alcoholic beverages have strong prospects in India. Increased demand for imported processed products often accompanies rising household income levels and urbanization, enabling consumers to shop more frequently at larger grocery stores that are likely to stock imported retail items. Imported retail products may be more expensive than domestically-produced products, but middle- and high-income consumers are likely to pay a premium to experience a greater variety or find specific imported products. In FY 2023, the United States exported $160 million dollars of processed food and beverages to India. Top categories included prepared foods and ingredients ($68 million), alcoholic beverages ($21 million), canned fruit ($9 million), and condiments and sauces ($6 million). U.S. alcoholic beverage exports have grown particularly fast in recent years, more than doubling in the past five years, driven by increased whiskey exports.

    Trade Policy

    Consistent with Prime Minister Modi’s “Make in India” and “Self-Reliant India” policies, India impedes agricultural trade with high tariffs and non-tariff barriers. India’s applied tariffs on most agricultural and consumer-ready food products range between 30-40 percent, with bound tariffs as high as 150 percent. The Indian Government routinely enacts sanitary and phytosanitary measures and other non-tariff barriers, particularly in the biotechnology space, that are not based on science- or risk-based approaches. Moreover, India intervenes in the market with price-distortive measures that negatively impact farmers and consumers on a global scale. It applies export bans and restrictions on critical food staples, such as wheat and rice, and maintains minimum-support price schemes for those and other crops where subsidized production also significantly contributes to greenhouse gas emissions, poor air quality, and the depletion of natural resources.

     

    The U.S.-India Trade Policy Forum (TPF) is the principal mechanism to advance bilateral trade between the two countries. Through the TPF, India agreed to improved market access for U.S. pork, cherries, and alfalfa hay in 2021 and 2022. However, pork shipments have not taken off, and India has not fulfilled its obligation to import alfalfa hay due to biotech concerns. In 2023, India agreed to reduce its MFN tariff on 10 agricultural products. Following the 2023 TPF ministerial, India reduced its tariffs on pecans from 100 percent to 30 percent. During Prime Minister Modi’s State Visit, the United States and India announced the resolution to six non-agricultural World Trade Organization (WTO) disputes. Part of the resolution included India agreeing to lift its 2019 retaliatory tariffs of 10 to 20 percent on U.S. almonds, apples, chickpeas, lentils, and walnuts, which went into effect in September 2023. On the margins of the 2023 G-20 Leaders’s Summit, the Office of the U.S. Trade Representative announced a resolution to the final outstanding WTO dispute against India’s ban on U.S. poultry and egg imports due to unsubstantiated avian influenza claims. During the Summit, India also agreed to reduce its MFN tariffs on blueberries, cranberries, frozen turkey, and frozen duck destined only for high-end hotels and restaurants. Tariffs are expected to be reduced by March 2024 from 30 percent to a range within 5 to 10 percent, depending on the Harmonized System code.

  • Growing Chinese Market Demand for Nuts and Dried Fruit

    USDA Foreign Ag Service — Thanks to consumers’ growing preference for healthy food and earlier successful marketing of nuts and dried fruit products across the country, China’s consumption and demand for nuts and dried fruit has exploded over the past few years. To continue this growth, new product innovations, packaging, and flavor concepts for nuts and dried fruit are needed.

    In China, popular nuts and dried fruit include, but are not limited to, almonds, pistachios, pecans, walnuts, macadamia nuts, hazelnuts, dried cranberries, raisins, and dried blueberries. Recently, consumers have sought dried fruit and nuts because of their perceived health benefits, their versatile applications in food manufacturing, and their rich texture and appearance. In China, the “nuts market” segment includes tree nuts and dried fruit.

    Statistics from different sources indicate that the nuts industry has grown robustly over the past decade. Along with strong consumption and sales between 2012 and 2022, imports of nuts expanded substantially from $0.5 billion in 2012 to $3.3 billion in 2022, with record imports in 2021 of $3.5 billion.

    TREE NUTS & DRIED FRUITS MARKET SNAPSHOT

    •   The nuts market reached $40 billion in 2022, accounting for about 20 percent of the total snack food market, competing with candy/chocolate and biscuits/pastry for the number one sector.
    •   The compound annual growth rate for the nuts market was above 10 percent between 2011- 2022, making it a leading manufacturing industry in China.
    •   The tree nut market size reached $8 billion in 2022, remaining far behind seed nuts at $32 billion.
    •   Imports of tree nuts reached $3.28 billion in 2022.

    Imports of dried fruit also increased substantially over the past ten years, increasing from an initial $215 million in 2012 to $946 million in 2022, a 340 percent increase.

    The Popularization of Daily Nuts

    The concept of Daily Nuts originated from a product that was initially launched in 2016 by Wolong, a snack food manufacturer based in Qingdao. Although it is called Daily Nuts, it is a mixture of nuts and dried fruit, such as almonds, pistachios, dried blueberries, and dried cranberries. It is usually in small packs of 15-20 grams, perfect for nutrition supplements and at-work snacks.

    Unlike traditional roasted nuts, Daily Nuts target younger and higher-end consumers. Almost all the nuts and dried fruit used in daily nuts are imported to meet consumers’ high-quality expectations. While the raw ingredients are imported, the roasting, processing, and packaging occur domestically.

    Due to the strong marketing behind Daily Nuts, focusing on the nutritional benefits and portability of the product, the market exploded. Due to the quick expansion of Daily Nuts across China, Alibaba’s Tmall Research Institute created a new sub-sector called mixed nuts (which includes nuts and dried fruit) in 2017, and daily nuts were regarded as a representative of the sub-sector.

    Following the launch of Daily Nuts in 2016, the market size of mixed nuts and dried fruit grew from $1.4 billion in 2016 to $15.8 billion in 2021, a 1,029 percent growth.

    Consolidation of the Mixed Nuts Sub-Sector

    The booming sub-sector has led to market consolidation. Initially, more than 300 brands began selling daily nuts products in China. Big retailers such as Fresh Hippo, an affiliate of Alibaba, and Bian Li Feng, a nationwide franchised convenience store, even created their own daily nuts style private label products. However, recently smaller processors have begun manufacturing for bigger ones. In 2022, the combined market share of the top five brands, Three Squirrels, Haomusi, Wolong, Chacha, and Bestore, amounted to 38 percent; it is estimated that by 2028, the top five brands will expand their combined market share to 54 percent.

    Growing Online Sales

    The main category of consumers of mixed nuts and dried fruit are those aged 20 to 45, which directly corresponds to those consumers who most often utilize e-commerce channels. As a result, most of the sales for mixed nuts occur online. In 2022, 47 percent of all snack food sales occurred online. According to CFNA, in the first half of 2023, online sales of food products increased by 8.9 percent year-on-year. Additionally, new online livestreaming retailers, such as Douyin (Tiktok) and Kuaishou, are taking increasing market share from traditional offline retailers.

    Applications of Mixed Nuts in Food Manufacturing

    Tree nuts and dried fruits are typically used for three purposes: snack food, baking ingredients, and food/beverage ingredients. Although the applications of baking ingredients and food/beverage ingredients have been developing in recent years, the snack food sector has achieved impressive growth.

    The snack food sector includes three sub-sectors, namely single nuts, mixed nuts, and flavored nuts. The single nut sub-sector hosts traditional sunflower seeds, peanuts, hazelnuts, and imported tree nuts, which have become increasingly popular over the last two decades. Mixed nuts, as described in the daily nuts section above, are comprised of products with both nuts and dried fruit. Flavored nuts refer to nut products that are typically roasted, shelled, and then flavored to meet consumers’ personal flavor preferences. Typical flavors include but are not limited to salty, spicy, coconut, mustard and others.

    Sluggish Economic Recovery

    In 2022, strict COVID-19 zero-tolerance regulations impacted China’s economy. According to Tmall statistics, online sales of mixed nuts and dried fruit were nearly zero due to reduced logistics capacity. Offline, traditional sales fared even worse due to the same reduction in logistics capacity and frequent store closures. The economy was expected to rebound after lifting all COVID restrictions, but growth has remained sluggish.

    The overall reduction in spending means consumers are reducing purchases of non-essentials such as snack foods. In recent conversations with retail contacts, we learned that local consumers spending on snack food is only around 60 percent of pre-COVID levels. Although online food purchases increased by 8.9 percent in the first half of 2023, this is thought to be due to the increased sales of lower-cost products. The purchases of nuts and dried fruits, which consist of primarily imported raw ingredients and are more expensive, will continue to be impacted by China’s sluggish economic recovery.

    Declining Growth of Daily Nuts

    In the past few years, tree nuts and dried fruit sales were largely equal to sales of daily nuts products. While Daily Nuts initially led to an explosion in the market, the market is largely saturated. Thus, the market is calling for innovations in the nuts and dried fruit sector to spur growth.

    Booming international and domestic supplies

    China relies on imports of a range of nuts to meet its strong domestic demand. International supplies impact import volumes considerably. For example, with the production of U.S. almonds reaching a historic high in 2020/2021, the price fell substantially, which in turn led to increased exports to China. Increased international production may continue to lower global tree nut prices, making exports competitive.

    However, due to growing domestic supplies, imports of certain nuts and dried fruit are expected to decline. China is the largest producer of walnuts and peanuts globally and has a growing production of macadamia nuts, raisins, and blueberries.

    Over the past ten years, growing demand for nuts and dried fruit has pushed domestic production to record highs. According to CFNA, China’s total nut production in 2023 is 44 percent higher than five years ago.

    Growing domestic production has also decreased prices for dried fruit. For example, in August 2023, the domestic price for raisins was roughly half that of Chile and a quarter of that of the United States.

    Other Promising Products

    Aside from products used for mixed or daily nuts, other dried fruit products are seeing market growth. For instance, local consumers perceive dried prunes as a good source of dietary fiber, translating into increased sales.

    Additionally, growing consumer health consciousness and the still-to-be-explored versatility of nuts and dried fruit in the food manufacturing sector will likely spur market growth. While the previous high growth rates were not sustainable, mild but steady growth is expected.

    New Product Development

    With the saturation of the market for daily nuts, food researchers and developers are making every effort to develop a product with the market power of daily nuts. Potential new uses of nuts and dried fruit could include:

    •   In a beverage
      o Example: Six Walnuts bottled drink, a walnut milk beverage, saw high sales upon its launch due to improved taste and brand image.
    •   In the food manufacturing sector

    o New processed and value-added products such as sliced, diced, minced nuts, or sugared, pureed, marinated fruit, could be used to meet different food manufacturing requirements or demands.

    o China’s expanding food manufacturing industry is calling for more varieties of processed ingredients, offering new market opportunities.

    Identifying and capitalizing on these market opportunities will require more collaboration between suppliers and R&D departments of Chinese food manufacturers in testing and educating the market.

     In chain coffee and milk tea shops
    o Recently, nuts, and dried fruit consumption have increasingly been used for beverages at chain coffee and milk tea shops across China.

    o This demand comes from two usages: one is a small pack of nuts and dried fruit consumed alongside coffee or milk tea, and the other is used as ingredients for baking and pastries in coffee or milk tea shops.

    o Neither of these uses is new, but the demand and consumption have grown substantially in line with the rapid expansion of coffee and milk tea shops.

    For more information, please contact ATO Beijing:

    USDA Agricultural Trade Office in Beijing U.S. Embassy, Beijing, No. 55 An Jia Lou Road Chaoyang District, Beijing
    China, 100600
    Tel.: 86-10-8531-3950
    Fax: 86-10-8531-3974
    Email: atobeijing@usda.gov