Southern San Joaquin Valley Almond Symposium

Almond Board Update Bob Curtis, Associate Director, Agricultural Affairs

Jenny Konschak, Industry Relations Specialist June 12, 2013

A Crop of Choice + The Nut of Choice

A Crop of Choice

Almond farming in California is considered by all to be a crop

that is good for the state and the country, and has a long term

comparative, competitive advantage versus other

countries of origin.

The Nut of Choice

The use and consumption of almonds is considered essential

to global importers, manufacturers, product

developers, marketers, retailers and consumers.

Crop of Choice + Nut of Choice Continuum

FY2013/2014 Program Budget Allocation Chart

Administration 14%

Production Research 2.7%

Environmental Research

1.8%

Scientific Affairs / Nutrition Research

3%

GMDC 73%

TRAC 2%

Industry Services 2% AQFS

1% Corporate Technology 0.5%

The Almond Board of California – Serving growers since 1950

•

210 211 239 292 312 332 304 368 395 411 450 490 547

503 529 582 691 712 653 610

698 866

978 1,022 1,178

1,352

0

500

1,000

1,500

2,000

2,500

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

Export Shipments Domestic Shipments Total California Supply Lbs

Steady Growth, Record Shipments Worldwide

Source: Almond Board of California

Mill

ion

Poun

ds

How do we keep ROI attractive for

everyone?

Asia-Pacific, 38%

Western Europe, 35%

Middle East/Africa,

17%

Canada/ Mexico, 5%

Central/ Eastern

Europe, 4%

547

236

157 119 117 94

62 59 48 45 45

Current markets still showing room for tremendous growth…..

FY 2011-2012 Shipments

Top Ten Export Markets

Million Pounds

Source: Almond Board of California

Global Market Development

Global Market Development Strategy

• Market Access Focus

Understand general market dynamics and assess growth opportunity Minimize technical and regulatory hurdles that potentially block or slow almond

importation and distribution

• Trade Development and Marketing Focus Provide education and training for importers, retailers, food service, and food

manufacturers optimizing supply side conditions for the sale of snack and ingredient almonds

• Consumer Marketing Focus and Trade Management

Clearly articulate the profile of consumer target(s) Create compelling positioning that uniquely differentiates almonds in the market Execute effective communication plans to reach and influence target consumers Measure results and optimize plans

Global Market Development Approach

Almond Growth Opportunity Fueled by Global Trends

Key Trends: • 1 in every 4 people will die of heart disease, and this continues to rise • Nutrition research driving shift in perceptions around healthy diet options • Snacking occasions on the rise as traditional meals are downsized and

more is eaten in between meals • The versatility, portability, convenience, and nutritious good taste of

almonds are a perfect fit with healthy lifestyles

Current Volume* 955 M lbs 2016 Growth Potential 261 M lbs

2016 CAGR 6.2%

Established Markets

* GMDA refresh estimate 2013

Almond Growth Opportunity Fueled by Global Trends

Key Trends: • Urbanization helping to define areas of opportunity • Rising middle class with greater disposable income • Shift to more Western lifestyles with increased consumerism • Higher incidence of diet related chronic disease – heart disease,

diabetes, cancer, obesity • Greater health consciousness and focus on healthy eating

Current Volume* 472 M lbs 2016 Growth Potential 404 M lbs

2016 CAGR 16.7%

Emerging Markets

* GMDA refresh estimate 2013

ABC Research Overview

Almond Industry On-Going Commitment, Research Investment

Nutrition Research

Heart health Type two diabetes Weight management

Industry Research

Environmental Production Almond Quality & Food

Safety

Consumer Research

Market Research

ABC Scientific Research Investment – over $42 million

$21.1

$3.0 $3.3

$14.6

Production Research (1973- 2013)

Environmental Research ( 2003 - 2013)

Almond Quality & Food SafetyResearch (2000 - 2013)

Nutrition Research (1995 - 2013)

Production Research 1973-2013

Production Research – 1973 to Present

Optimizing agricultural inputs and orchard management

Risk mitigation, integrated approach to pest management, nutrient inputs, horticulture and pollination = Environmental Stewardship

• $21.1 M research investment over 39 years

• FY 2012-13 Budget - $1.14M 36 projects, primarily with

University of California (UC) and US Department of Agriculture (USDA) researchers

Includes 5 areas – Horticulture – Entomology – Aflatoxin & Quality Field

Research – Plant Pathology – Pollination

Many co-funded with Environmental and AQ&FS committees

39 Years Funding Production Research

Entomology 20%

Horticulture 51%

Pathology/ Nematology

15%

Pollination 10%

Aflatoxin 4%

FY 12/13

Production Research – Milestones

• 2012 Conference – 40 years of success & contributions

• Substantial decrease in rejects (and aflatoxin risk) to ~> 1%, while also being recognized for environmental stewardship

• Average yield doubled over last 20 years • Advances in water efficiency – Micro

irrigation, multi-faceted irrigation scheduling, regulated deficit irrigation

• Advances in nitrogen use – Increased production efficiency with environmental excellence: Addresses nitrogen / nitrate regulations coming online

• Charted a course for meeting the research and extension needs of our crop

• Partnership with Beekeepers • 2005 Bee Task Force formed • Honey bee health research largest, most

sustained of any commodity organization - $1.4M since 1995

Production Strategic Research Plans and Current Priorities

Sustainable Pest Management Programs: Balancing Production Efficiency, Quality & Environmental Stewardship • Navel orangeworm – pheromone for monitoring and improved mating disruption • Mites • Diseases – late spring and summer diseases • Weeds • Pesticide resistance management • Optimal spray efficiency • Anticipate invasive pests Variety Development and Evaluation • Self compatible • Markers & managing bud failure • 3rd generation Almond Regional Variety Trials Reducing Reliance on Preplant Fumigation • Rootstock evaluation and development • Non-fumigant controls • Diagnostics to determine need to fumigate

Production Strategic Research Plans and Current Priorities

Sustainable Irrigation and Fertility: Balancing Production Efficiency, High Costs / Short Supply & Environmental Stewardship • Water production function • Nutrient budgets Sustainable Orchard Management: Impact of Practices on Orchard Lifecycle and ROI • Irrigation • Fertility • Orchard systems / planting options • Pest management Managing Quality in the Field • Aflatoxin • Concealed Damage

Production Strategic Research Plans and Current Priorities

Pollination Security Addressing Tight Honey Bee Supplies • Honey bee health – Nutrition, germplasm, pests/Varroa mite, pesticide impacts • Blue Orchard Bee – Alternate pollinator • Optimizing pollination / Integrated pollination management, including bee

forage • Self compatible varieties Assure Research and Extension Capacity to Serve Almonds • Start-up funding for UC Cooperative Extension Positions • Almond-pomology farm advisor internships

Environment Research 2003-2013

Environmental Research and Milestones 2003 - 2013

1) Research to develop data for regulatory process - PM10 harvest dust emission factors determined

- Completed Life Cycle Analysis for Energy and Green House Gases in 2012

2) Research to reduce the impact of almond growing on the environment - Harvest dust reduction measured - Fertilizer and spray efficacy increased - Surface water protection measures in place - Fumigant emissions reductions ongoing

Outreach Efforts: - Annual Environmental Stewardship tours for regulators and agr media, recognized by US and state government - Sustainability Program 5 modules launched, based on ABC and UC funded research

Environmental Issues Affecting Almond Production Water Availability

CA water management and conveyance system is unsustainable

Water Quality

Run-off/spray drift impacts Ground Water (nitrate/salts)

Endangered Species Act Reducing Water Distribution Major role in pesticide registration actions Habitat protection, enhancements

Air Quality Dust Ozone (ground level and stratospheric) Diesel emissions Greenhouse gases

Self-Assessment Modules – now online

Existing • Irrigation Management • Nutrient Management • Air Quality • Energy Efficiency • Pest Management

In Development • Water Quality • Ecosystem Services

~ 10% of acreage

assessed

Almond Quality and Food Safety Programs 2000-2013

Almond Quality and Food Safety Program

Almond Quality Studies • Shelf Life /Sensory • Storage Condition Studies • Grower influences on Quality

Contaminant Surveys • Pesticide Residue • Heavy Metals • Pathogens • Aflatoxin

Industry Adopted Programs • GAP’s • SSOP’s/ GMP’s • HACCP • Allergen Control in Facilities • Pathogen Environmental Monitoring

13%

44%

8%

13%

15%

7%

2012/2013 Quality/Safety Focus

Analytical Testing/SurveysFood Quality/Functionality ResearchFood Safety Symposium/OutreachComplianceGeneral Food SafetyPasteurization Program Research

Good Agricultural Practices (GAP’s)

GAP’s-Food safety starts in the orchard • 8 “On-The-Farm” practices to minimize

contamination • Documentation / Traceability • H2O Quality • Orchard Floor Management • Soil Amendments • Pest Control • Field Sanitation & Worker Hygiene • Employee Training • Harvest Delivery & Sanitation

Focus on elimination of potential sources of contamination or conditions which could allow bacteria (Salmonella) or mold (Aspergillus = aflatoxin) to grow

ABC Hurdle Approach to Food Safety (Pathogen Control)

GAP’s

• Eight practices implemented at the farm level to minimize the potential for contamination with pathogens or other contaminants

Facility GMP’s

• Form the basis of the ABC Food Safety program at the processing level • Recommended practices to minimize and control sources of

contamination

Pasteurization

• Definitive controls to eliminate pathogens that may be present • Validated processes to ensure a minimum 4-log destruction of

Salmonella bacteria on almonds

Contamination Control

• Programs such as Pathogen Environmental Monitoring (PEM) designed to identify and eliminate sources of re-contamination

Definitive Controls– ABC Mandatory Pasteurization Program

Company or Vendor Consultation with ABC and PA on equipment

PA validation studies

ABC staff (and TERP) support & review

TERP review & determination

Goal is to demonstrate ability to achieve a minimum 4-log

reduction of Salmonella bacteria on almonds

Requires all Handlers to utilize technologies that have been determined to achieve a minimum 4-log reduction of Salmonella bacteria in almonds

• Equipment must be validated by a Board approved Process Authority

Voluntary Aflatoxin Sampling Program (VASP)

VASP – Requires all EU exports meet EU aflatoxin standards prior to shipment (10ppb total / 8ppb B1)

Representative sampling from throughout lots USDA approved labs – Analyze samples and document results ABC – Facilitates process and conducts Handler VASP audits to verify sampling procedures Product with a VASP certificate is only subject to random controls in EU vs. rejection for those without

Nutrition Research 1995 - 2013

ABC tins evolved from 2003 Wien weight loss project

ABC funded research a key part

of the 2003 FDA qualified heart health

claim for nuts

Week

Wei

ght,

kg

9010

011

012

0

0 8 16 24

CHO-LCD (n=33)Almond-LCD (n=32)

Almond PistachioEn

ergy

(kca

l/ser

ving

)0

80

100

120

140

160

180Current Label Value

ABC is very proud of our robust science & consistent results:

• Since 1995 ABC has invested $15 million in sound science to better understand the human health effects of almonds, in particular on heart health, diabetes and weight management

• Scientific research, supported by ABC is often cited by leading authoritative health and nutrition groups as what should be done for other whole foods.

• 92 published papers to date, with 17 more in progress: Nutrition related journals 50 Food science/chemistry 32 Microbiology/immunity/allergy 6 Medical journals 4

30 papers have impact factor > 3.0

Industry Relations Jenny Konschak, Industry Relations Specialist

ABC Industry Communications & Events - Key to Success

December 3 - 5, 2013 Sacramento Convention Center

Almond Board of California Website

www.almondboard.com

The Almond Conference

CASP: California Almond Sustainability Program

• Self-assessment Modules Irrigation Management

Nutrient Management

Energy Management

Pest Management

Air Quality

• Initial emphasis on establishing baselines for current practices

• Goal is to identify areas for improvement and implement change

~ 10% of acreage assessed

Thank you!

Almond Board of California 1150 Ninth Street, Suite 1500

Modesto, CA 95354 209.549.8262

www.almondboard.com