Wonderful Pistachios demonstrates healthy appetite for success

Mark Masten: “We don’t see our product as competing for spend, rather it offers an attractive alternative within the [wider] confectionery and fine foods categories.”

Since joining Paramount Farms in 2012, Sales Director Australia/SE Asia and Global Travel Retail James Kfouri has lost no time in establishing Wonderful Pistachios as a serious contender within the industry’s snack segment. The brand, which constitutes an appealing alternative to chocolate and sugar offerings, is becoming a familiar sight in travel retail doors all over the world, generating incremental revenue for retailers – while offering travellers a convenient, healthy option within the confectionery/fine foods arena, both in terms of gifting and self-consumption.

But who exactly is Paramount Farms? What prompted the company to set its sights on travel retail in the first place? And how does it plan to further develop its presence in the future?

Put simply, Paramount Farms is big. Part of the Roll Global family, it is one of a group of privately-owned, affiliated companies that comprise the largest farming operation of tree crops in the world. Paramount is the biggest vertically integrated pistachio and almond grower and processor in the USA.

Located in California’s San Joaquin Valley, Paramount delivers more than 450 million pounds of nuts globally each year, supplying both industrial and retail customers. Its Wonderful Pistachios, Wonderful Almonds and Wonderful Almond Accents are already a familiar sight in US grocery stores nationwide.

But there is more – much more – to come. “The primary challenge for the California pistachio industry is to build a global market to sustain the anticipated 1 billion pound crop by Crop Year 2020,” Vice President of Global Sales & Marketing Mark Masten told The Moodie Report, following a private tour of Paramount’s Lost Hills plantation and processing facility earlier this year.

“For this reason, Paramount continues to invest in markets around the world, helping to grow demand and get California pistachios to consumers everywhere. To that end, our global marketing effort continues to concentrate on the core markets of the USA, China and Europe, as well as emerging markets around the world, such as South Korea and Brazil.”

The company’s home US market continues to thrive, with pistachio consumption on the rise. “We’ve invested more than US$200 million in US marketing, which is driving growth for the entire category,” Masten notes. “Our award-winning Get Crackin’ advertising campaign [of which, more later] has driven remarkable sales growth across the USA, increasing both demand and price.”

The vast Lost Hills facility in California: Paramount is the biggest vertically integrated pistachio and almond grower and processor in the USA

Elsewhere, in Europe and in Asia, the group continues to build its domestic market presence. “In China, we have worked hard on a government ban on bleaching pistachios, and have educated the trade about the benefits of California pistachios,” Masten explained. “These efforts helped increase demand for pistachios in the fast-growing Chinese market. Indeed, we are finding that Chinese consumers are very eager for California pistachios for Chinese New Year, and are willing to pay a premium price.”

He continued: “In Europe, we are cautiously optimistic that our efforts with the retail trade are paying off. We worked relentlessly with one of Germany’s biggest retailers to feature pistachios in its produce section – the type of European breakthrough we’ve long sought. With similar perseverance in other key foreign markets, we’ll continue to build the Wonderful brand around the world as we maintain our remarkable growth at home.”

Taking the next step in travel retail
Masten described travel retail as the next logical step for the Wonderful brand, as it looks to build on its position as the number one snack nut brand in the USA, and further develop its global distribution. But who exactly is the target traveller within the channel?

Travel retail exclusive packs have been a strong sales driver

“Our key consumers are the ones looking for a healthier alternative to the traditional confectionery snacking-on-the-go option,” he explained. “Our consumer is also looking to our product as an “affordable luxury” gift, one that is a premium alternative to sweets or liquor.”

Indeed, Masten insists that Wonderful Pistachios’ positioning fits perfectly within the trend for premiumisation that has emerged in recent years. “Wonderful Pistachios have been typically viewed as a “luxury nut” within the snack nut category,” he underlined. “Our upscale packaging and quality product help ensure we offer our customers affordable luxury that delivers on the brand promise”¦We are bringing innovation to a category previously looked at as a commodity.”

That innovation has big benefits for retailers, too, Masten believes, as it is fuelling incremental growth. “We don’t see our product as competing for spend, rather it offers an attractive alternative within the [wider] confectionery and fine foods categories,” he explained. “We offer travellers a fresh new convenient choice.”

And even in territories where nuts are already more established, Masten believes there is still scope for growth.

Left: Wonderful Pistachios’ new display in Iguaçu Falls with London Supply; right: James Kfouri, the face of the brand in travel retail, at the Lost Hills plantation

“In regions such as the Middle East, where pistachios have traditionally been available from local sources and packers, we are stimulating the category, and hopefully driving overall sales of the total pistachio market,” he observed. “[Looking ahead] our priorities are to increase the global travel retail distribution footprint and further build on our sales and branding successes.”

Masten acknowledged the role played by Kfouri in terms of progress to date within the travel retail channel. “James’s appointment has been a critical element,” he noted. “He has excellent knowledge and contacts – and travel retail is a relationship business, where trust is important.”

Masten continued: “Before we started in travel retail, we didn’t really know if we could make it work – but we wanted to try. We went to Cannes three years ago with some ideas and a vision of how the channel [could complement] our global growth. And it seems to be working. We are still building, still making progress.”

Before we started in travel retail, we didn’t really know if we could make it work – but we wanted to try. We went to Cannes three years ago with some ideas and a vision of how the channel [could complement] our global growth. And it seems to be working. We are still building, still making progress.
Mark Masten
Vice President Global Sales & Marketing
Wonderful Pistachios

One of the Wonderful brand’s latest breakthroughs is a listing with London Supply in Argentina. Division Manager Spirits, Tobacco & Confectionery Lara Plaza commented: “As part of the expansion plan of our Duty Free in Iguaçu Falls, the introduction of Wonderful Pistachios has a relevant role, as we have focused on expanding the snacking category. Working with Wonderful Pistachios is a great experience as our companies share [certain] core values, such as a great work ethic and pursuit of excellence.”

Kfouri added: “London Supply was one of our earlier listings in South America and has been a strong performer from the start. The addition of its new store will only strengthen both brands in the region.”

A Crackin’ campaign
Wonderful Pistachios’ edgy, innovative 360-degree Get Crackin’ campaign has been a game-changer for the brand in terms of global exposure – and subsequently, sales.

This year’s high-profile Superbowl ad featured Stephan Colbert, the quirky, Emmy-award winning host and executive producer of Comedy Central (who will replace David Letterman on The Late Show next year), turning his head into a pistachio. Last year’s Superbowl campaign showcased South Korean star Psy exhorting consumers to “Crack Their Nuts Gangnam Style”, in a glorious self-parody of his global hit.

“Paramount Farms is proud to be seen as an innovator,” noted Masten, revealing that Wonderful Pistachios’ awareness jumped +24% last year. In the USA, the brand has added more than 15 million households to the pistachio category since 2009. “Much of Wonderful’s success has been attributed to our award-winning Get Crackin’ campaign, now in its fifth year.”

Funny and occasionally controversial, the campaign has engaged new and current consumers worldwide with its clever and often irreverent depictions of celebrities and pop culture icons opening pistachios.

//www.youtube.com/embed/7MErkYH-FNo

Colbert’s two 2014 Super Bowl spots (which included a Bald Eagle) were complemented by a massive social media promotion, outdoor advertising in New York City, and eye-catching in-store displays across the USA and Canada.

“As with all our campaigns, our aim is to achieve millions of media impressions and YouTube views of our commercials, and to add to our already extensive fan-base on social media platforms with sweepstakes, online advertising and peer-to-peer engagement,” Masten remarked.

“Introducing Colbert as the new face of Wonderful Pistachios brings a fresh wave of publicity to our product and delivers a whole new segment of snack-loving consumers. We estimate we reached 115 million viewers through this year’s Super Bowl, and another four million online – plus another 2.16 billion impressions created through our PR.”

He added: “With our continued investment in high-visibility advertising and promotional activity, we are confident that by the end of this crop year we will be approaching our 70% awareness goal, putting pistachios in the same realm as such salty snacks as chips and pretzels.”

Laying foundations for the future
The sheer scale of Paramount’s Lost Hills operation is difficult to convey in words. The nut plantations – both almond and pistachio – are vast, stretching as far as the eye can see in all directions. So sophisticated and complex is the enormous on-site processing plant that it’s been featured on the Discovery Channel’s Modern Marvels series.

“The best way to connect with the product is to stand in the orchards in the Californian sunshine,” Masten agreed. “That’s what brings home how natural our product truly is.

“The investment we have made, between the orchards and the farms, runs into billions of dollars. The numbers are hard to process, but we’ve got 40,000 plus acres of almonds, and 30,000 acres of pistachios.”

It’s not just the nut numbers that are staggering. Almond trees, for example, are pollinated by bees (unlike pistachio trees, which are pollinated by the wind). The company needs 90,000 hives (at a cost of US$170 each) to do this. With 30,000 bees per hive, and 1.95 hives per acre, that adds up to a requirement of 2.7 trillion bees each year. Regarding irrigation, one and a quarter gallons of water are required per almond nut per year.

Sustainability, therefore, is crucial, and Paramount is committed to combining its role as an industry leader with laying foundations for the future.

“Our environmental stewardship and socially responsible approaches mean sustainable growth for years to come – not only in our land, but in our communities and among our employees, vendors and customers,” Masten underlined.

Paramount Farms cultivates, propagates and harvests its crops using the industry’s most environmentally innovative methods

“We cultivate, propagate and harvest our crops using the industry’s most environmentally innovative methods. We also invest millions of dollars in research, technology and talent to increase yields and improve quality while minimising our impact on the earth.”

Understandably for an area that is suffering from a severe and prolonged drought, irrigation is a key issue. “We believe water usage is the most important issue facing California farming today, and have invested almost US$25 million in learning how to do it better,” Masten explained. “We use modern methods [such as fan jet and drip emitter irrigation] in our orchards to ensure our trees are getting the right hydration, without wasting a single drop.”

Power is another important element. In 2007, Paramount opened a 1.1 megawatt, US$7.5 million solar plant – the largest single-site, privately owned operating solar plant in the USA at the time. “Today the [solar] plant supplies about 15% of the total power in the processing plant, easing the burden on the power grid while reducing fuel consumption and greenhouse gas emissions,” Masten noted.

The Moodie Blog
A cracking time in California with Wonderful Pistachios
My sanity has been questioned many times over the years – not least, on occasion, by myself – so the nut job jokes came thick and fast when I accepted an invitation from Wonderful Pistachios to visit (via private jet!) parent company Paramount Farms’ plantation and processing facility in Lost Hills, California, prior to this year’s IAADFS show in Orlando.

Paramount has also explored fuel cell power, which uses natural gas and air to produce electricity, while producing no combustion or pollutants. Operational since 2013, fuel cells supply 20% of the main plant and 40% of the secondary plant’s power.

Supporting the local community
Importantly, for Paramount, sustainability has to have a people component too. Roll Global Founders Stewart and Lynda Resnick have always balanced achievement in business with the pursuit of philanthropy, and through Paramount Farms have supported a raft of Corporate Social Responsibility initiatives that have specifically benefited the surrounding Central Valley communities.

These initiatives include college-bound incentive and scholarship programmes, school grants and early childhood education programmes which offer learning opportunities for the children of employees and members of the community.

Paramount has also helped underwrite the Central Valley’s first charter school, the Paramount Bard Academy, targeting historically underserved students and preparing middle school and high school students for college and beyond. The company has also spearheaded the Central Valley’s first LEED-certified pre-school, created to introduce the youngest members of the community to a lifetime of learning.

Other investments in community health include a US$4 million donation to Children’s Hospital Central California, providing seed money to fund a new 60,000sq ft expansion of the Children’s Emergency Department and Trauma Program.

Again, more locally, Paramount has donated solar lights to illuminate the Lost Hills Park basketball court, and underwritten a Grower’s Market, which brings fresh fruit and vegetables right into the community, every month.

Paramount Farms has supported a raft of Corporate Social Responsibility initiatives that have specifically benefited the surrounding Central Valley communities

Two years ago, Paramount even helped a local youth, Jose Ramirez, pursue his Olympic dream. “There was a very talented boxer from the area, who couldn’t really keep working and do the necessary training,” Masten explained. “So Paramount supported him, within the Olympic guidelines, which allowed him to train full-time.” Ramirez subsequently competed at the London 2012 Olympics, as part of the USA team.

“The Resnicks have always been big at giving back,” concluded Masten. “But they are very quiet about it too. We’re a private company, and there’s not that much PR [about such activities]. We just support these things because it’s the right thing to do.”

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