Pecan Industry Federal Marketing Order Targets Strategic Plan Goals

Exports in 2020-21 are up from 2019-20, including in China. (all photos courtesy APC.)

The American Pecan Council (APC) is the Federal Marketing Order (FMO) for the U.S. pecan industry representing all pecan stakeholders across 15 growing states from North Carolina to California with the oversight of USDA. Industry came together to create the FMO to address the want and need to engage in widespread marketing activities to grow consumer demand for American Pecans.

The five critical areas an FMO focuses on are domestic and international promotion and marketing, research, grades and standards, compliance and data and statistics. APC cannot lobby, buy or sell product, set price or set tariffs.

During the 2018-19 fiscal year, the Council voted unanimously to move forward with developing a strategic plan. The concept of the plan was to have a non-biased, outside consulting firm analyze the industry and look at the areas that the Council should focus on with its limited resources. The result was a finalized plan that focuses on five areas. These include: Winning its fair share of tree nuts; Leading among global suppliers; Strengthening our infrastructure; Modernizing the industry; and Uniting the pecan stakeholders. The results of these activities have been exceptional.

APC implemented a very robust campaign on refocusing, repurposing dollars and utilizing metrics to make sure everything is working effectively and efficiently.


Winning a Fair Share

Data showed that prior to the FMO, the U.S. Pecan industry remained stagnant regarding overall growth, domestic and international demand, and consumption. Regarding top-of-mind awareness, pistachios, walnuts, cashews and peanuts all rose high above pecans prior to the industry’s consumer brand launch. What these programs have under their belt is time and resources, with the youngest organization out of those listed, pistachios, being established in 2004. Walnuts have been established for over 50 years. Luckily, pecans are a part of a multi-billion dollar nut industry. Nut consumption in the U.S. has been steadily increasing.

Health research findings for nuts and the increased interest in a healthy diet have contributed to this increase. There was untapped potential for major growth in pecans. The FMO was created for this very reason: to pull industry resources together that spread across three regions and many states to create a single, unified national voice for American Pecans. Under the FMO, pecans can finally shine a light on our industry that has come together to share the story of the American Pecan.

Prior to the FMO, pecans had not experienced the same growth in consumption compared to other nuts who all benefited from Federal Marketing Orders for decades. The creation of the FMO was the first step in enabling pecans to win their fair share in the multi-billion-dollar nut industry. Although the pecan FMO is still a young organization (a little more than four years old), it has proven the strength of a unified and strategized marketing voice.


National Voice for American Pecans

The consumer research that was conducted prior to the official brand launch of American Pecans showed a very low top of mind recall for pecans when compared to other nuts such as peanuts, almonds, cashews and walnuts.

With a little over four years into the establishment of the Federal Marketing Order, Pecan’s share of voice came in at 29% during the 2020 holiday season, trailing the leading nut by 1%.
APC implemented a very robust campaign on refocusing, repurposing dollars and utilizing metrics to make sure everything is working effectively and efficiently. The diversified marketing efforts reach the target audience across key touch points including initiatives with social media influencers and health and wellness professionals. Marketing is a huge focus for APC as over 75 cents of each industry dollar is invested into consumer marketing.

Shipments of pecans were up significantly in 2020-21 compared to 2019-20.


Influx in Supply

Nuts have experienced a strong demand growth worldwide over the last couple of decades. The research conducted by the strategic plan showed that pecans severely lagged other tree nuts in many key dimensions for growth. Domestically, consumer demand was stagnant, with consumer awareness behind other similar nuts as mentioned above. The same trend was seen in the global market, and global supply is forecasted to grow over the next ten years. The current projections show that supply is growing much faster than demand at 33%. If there were to be no unified marketing push, the pecan market would hit a surplus and face potential price depression.

A very important reason the FMO was created was because we knew an influx of pecans were coming and going to flood the market if nothing was done. Industry’s studies reiterated this fact. Global supply was shown to be at 680 million pounds in 2017. With the projected supply growth from China and South Africa, pecans are looking at a global supply of 1.2 billion pounds by 2027. The supply excelling in growth compared to demand could lead to the gradual oversupply. Based on the research and data presented, we need to make sure that we continue to expand markets, expand consumption and stimulate demand to capture new supply and diversify global demand to grow a sustainable market for pecans.

How do we prepare for the influx of pecans? How do we make sure American pecans and local markets are protected? For every pecan displaced or moved, the industry wins. We want to make sure we educate and keep consumers aware and buying pecans so we do not impact the already established markets. Thus, the FMO was created to combat all those pecans projected to pile up in our neck of the woods, which will eventually lead to less demand and lower prices.

Less pecans were purchased outside of the U.S. by U.S. handlers in 2020-21 than 2019-20, signaling a shift to more local purchasing.


Industry Data

What we have seen since the FMO’s formation are great results for it being such a young organization. Let us look at the movement of pecans since the FMO. Pecan shipments, when compared to this time last year, pre-COVID-19 and even during the COVID-19 crisis, are still higher than they were last year.

Our share of voice, amount of people listening and consumer recognition is substantially up. When we started, pecans were at 12%; now, we are at 32% to 33%. Our consumption is going up. Pecans purchased outside the U.S. is a lot lower, which means people are buying more locally.

It is vital to continue that. Internationally, our exports compared to a year ago are up, including those of China.

We need to keep those markets going because we do not want those pecans to stay here and start leaking into established markets.

Just like with a pecan tree, it’s important to remember the fruit of all labor is not instantaneous. The pecan industry is still laying the groundwork and building a strong foundation that will set the future of pecans up for success in the years and decades to come. FMOs are one critical tool in the toolbox. Without the FMO, standards, marketing and promotion, research and data would go away. These activities that are now being conducted and are establishing for the first time an opportunity for the industry to have transparency and, ultimately, have data to analyze and make critical marketing decisions.

The FMO provides an opportunity for everyone to play by one fair set of rules for standards. Furthermore, the FMO provides an opportunity to unite the industry under one organization and one message, paving the way for everyone to work together toward a common goal: Increasing awareness and demand for pecans. We are doing everything we can to help promote American Pecans and protect as many markets as possible while also expanding markets and being prepared for the gigantic load of pecans on its way. The goal of the Federal Marketing Order for pecans has and always will remain the same, to increase demand for American Pecans and provide industry with a path to sustainably grow profitability across the value chain.

Top of mind recall for pecans is low compared to other nuts.