Nut Industry Potentialities & Challenges El Sector de los Frutos Secos Potencialidades y Retos

ExpoNut Santiago Chile 28 April 2015 International Nut & Dried Fruit Council Consejo Internacional de los Frutos Secos y la Fruta Deshidratada Nut Industry Potentialities & Challenges El Sector de los Frutos Secos Potencialidades y Retos Giuseppe Calcagni INC Vice Chairman Chair of the Scientific and Government Affairs Committee Vice Presidente del INC Presidente del Comité Científico y de Asuntos Gubernamentales

Contents 1. Introduction to the INC - Presentación del INC 2. Industry Overview - Panorama del Sector 2

INC Mission - Misión Membership - Membresía Services - Servicios Activities - Actividades World Nut & Dried Fruit Congress DB, The Cracker, Newsletter, Website Global Statistical Review Scientific and Government Affairs Health and Nutrition Industry s Umbrella Congreso Mundial de los Frutos Secos y la Fruta Deshidratada Base de datos, revista The Cracker, boletín y página web Revisión Estadística Global Asuntos Gubernamentales y Científicos Salud y Nutrición Paraguas del sector 3

Mission To be the International source for information on nuts and dried fruits for: Health and Nutrition Statistics Food Safety Government Standards Regulations Regarding Trade Barriers and Trade Quality Standards Ser la fuente Internacional de información sobre frutos secos y fruta deshidrata en: Salud y Nutrición Estadísticas Seguridad Alimentaria Normas Gubernamentales Regulaciones sobre Barreras al Comercio y Estándares de Calidad en el Comercio 4

Membership 670 Companies 76 Countries 17 products: Almonds Apricot Kernels Brazil Nuts Cashews Hazelnuts Macadamias Pecans Pine Nuts Pistachios Walnuts Peanuts Dates Dried Apricots Dried Cranberries Dried Figs Dried Grapes Prunes A Board of Directors of 13 countries. Ambassadors in 34 countries. An international team: 5 sub-committees, 9 staff, 37 nationalities. 5

Services Services to the Member Services to the Industry Services to the Community Representing members interest Providing a single source of information Access to gorvernment and industry leaders Industry watchdog Promoting goodwill and mutual understanding Reinforcing the sector s collective voice Assuring global quality standards Promoting research and education 6 At INC, we help connect, inspire, empower and inform our members. INC supports the whole nut and dried fruit sector in reaching its ambitious international growth objectives. INC provides networking opportunities to ensure our sector remains united and focused. En el INC ayudamos a conectar, inspirar, fortalecer e informar a nuestros miembros. El INC ayuda al sector a alcanzar sus ambiciosos objectivos de crecimiento a nivel internacional. INC proporciona oportunidades para establecer enlaces y asegurar que el sector se mantiene unido y centrado.

World Nut & Dried Fruit Congress 100 s of companies Since 1980 900 participants 50 countries 20 round tables, seminars and meetings 60 speakers The world s greatest Nut and Dried Fruit event. El mayor evento mundial del sector de los Frutos Secos. The place where the nut & dried fruit industry comes to do business. El lugar donde el sector de los frutos secos viene a hacer negocios. Industry's best opportunity to network and get the latest news. La mejor oportunidad del sector para establecer contactos y conocer las últimas novedades. Meet with business leaders. Conozca a los líderes de la industria. 7

The meeting point for the nut and dried fruit industry to seek business opportunities, learn and network. El punto de encuentro del sector para buscar oportunidades de negocio, aprender y establecer contactos. The place to conduct your nut business. www.nutfruitcongress.org

Industry s Umbrella Food safety, agricultural quality standards, trade barriers, border rejections, etc. Seguridad alimentaria, estándares de calidad agrícola, barreras al comercio, rechazos en frontera, etc. Codex Alimentarius, FAO, WHO, WTO, UNECE, EU, USDA, FDA, CCCFNA, etc. Aflatoxins, Salmonella, Pesticides, etc. Ethics and Social Responsability Trade Agreements Health & Nutrition N. America: Salmonella South America: Microbiological Contamination, Salmonella Europe: Aflatoxins, Microbiological Contamination, Salmonella China: Contaminants, Aflatoxins, Microbiological Contamination, Salmonella India and Vietnam: Fumigation, Microbiological Contamination, Salmonella Japan: Pesticides Food Availability Food Safety Regulations Agricultural Quality Standards

Industry Overview World Tree Nut Production and Supply Value Producción Mundial de Frutos Secos y Valor del Suministro Production (Metric Tons) Producción (Toneladas métricas) Supply Value (Million $) Valor del Suministro (millones de dólares) Metric Tons +66% Mio USD +277% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: INC. Kernel basis, except pistachios inshell. Frutos secos sin cáscara, excepto pistachios con cáscara. 10

Industry Overview World Tree Nut Production (MT). 5-year Avg Producción Mundial de Frutos Secos (Toneladas). Promedio de 5 años Source: INC. 11

Industry Overview Trade Flows Pistachios Almonds Pine Nuts Walnuts Walnuts Pecans Hazelnuts Pistachios Almonds c Cashews IS Cashews K Brazil Nuts Cashews IS Brazil Nuts Cashews K Hazelnuts Macadamias Macadamias Pecans Pine Nuts Pistachios Walnuts 12 Source: INC and and DESA/UNSD, United Nations Comtrade Database.

Industry Overview World Tree Nut Supply Value (Million $) 2006 2007 2008 2009 2010 2011 2012 2013 2014 TOTAL 13.679 16.936 18.347 18.810 19.450 21.568 25.657 27.022 33.706 Volumes produced per year in Northern and Southern hemisphere multiplied by approximate yearly average prices. 13 Source: INC.

Industry Overview 2014 Tree Nuts Supply Value/Volume 14 Source: INC.

Industry Overview World Tree Nut Production (MT) Kernel basis, except pistachios inshell Others Côte d Ivoire Vietnam Iran India China Turkey USA *Forecast 15 Source: INC.

Industry Overview World Tree Nut Consumption (MT) Kernel basis, except pistachios inshell 16 Source: INC.

Almonds World Almond Production (MT) Kernel basis Others Tunisia Turkey Australia Spain USA *Forecast 17 Source: INC.

Almonds Countries MT % Total USA 482.106 75% Spain 57.885 9% China 16.769 3% Australia 17.924 3% Netherlands* 10.610 2% Others 55.782 9% *Transit country Countries MT % Total Germany* 80.886 14% Spain** 72.225 12% China 49.601 8% UAE 36.638 6% Italy 32.385 5% France 33.463 6% Japan 23.378 4% Netherlands*** 25.482 4% Others 267.058 45% *Processing for marzipan **Processing for turron (Spanish nougat) ***Transit country 18 Source: DESA/UNSD, United Nations Comtrade Database.

Almonds Estimated Almond Consumption COUNTRY Consumption MT 2010 2011 2012 2013 Consumption Consumption Consumption Consumption Consumption /cap/kg/year Consumption /cap/kg/year /cap/kg/year Consumption /cap/kg/year /cap/kg/year Consumption (2) MT (1) (2) MT (1) (2) MT Consumption /cap/kg/year (1) Consumption /cap/kg/year (1) Consumption /cap/kg/year (2) USA 234.781 0,760 1,521 253.294 0,820 1,641 424.168 0,871 1,743 410.718 0,840 1,688 Germany 70.282 0,860 1,720 71.729 0,877 1,754 71.516 0,875 1,749 78.436 0,959 1,919 Spain* 43.305 0,940 1,880 61.649 1,338 2,676 57.664 1,252 2,504 48.108 1,044 2,088 Australia 25.307 1,135 2,064 34.369 1,541 2,802 30.606 1,372 2,495 46.512 2,086 3,792 France 29.712 0,472 0,944 28.956 0,460 0,920 30.309 0,481 0,962 38.342 0,609 1,218 Italy 29.333 0,485 0,970 39.915 0,660 1,320 37.130 0,614 1,228 35.332 0,584 1,168 Japan 21.023 0,164 0,219 21.777 0,170 0,227 25.932 0,203 0,271 28.550 0,223 0,297 Canada 20.734 0,608 1,216 24.817 0,727 1,454 23.800 0,697 1,394 24.937 0,731 1,461 Russian Fed. 13.274 0,093 0,372 17.398 0,122 0,488 20.248 0,142 0,568 21.700 0,152 0,610 Korea Rep 10.785 0,216 0,864 14.142 0,284 1,136 22.004 0,441 1,764 21.520 0,436 1,742 Others 302.426 - - 339.980 - - 351.921 - - 348.337 - - WORLD TOTAL 800.962 0,116-908.026 0,132-1.095.298 0,135-1.102.492 0,160 - (1) Total consumption expressed in Kg per person. Based on UN Statistics Division population census. (2) Based on the estimated percentage of population consuming the specific product. 19 Source: INC.

Almonds 2004 World Production in Spain, Australia, Iran, Tunisia, Morocco and Chile KERNEL BASIS 20 GNI ppp (Purchasing Power Parity). Source: INC and The World Bank.

Almonds 2014 World Production in Spain, Australia, Iran, Tunisia, Morocco and Chile KERNEL BASIS 21 GNI ppp (Purchasing Power Parity). Source: INC and The World Bank.

Almonds 22 Source: INC.

Almonds World Almond Consumption by Income Group Metric Tons. Kernel Equivalent High-Income Economies: >12,746$ GNI per capita Middle-Income Economies: 1,046-12,745$ Low-Income Economies: <1,046$ 23 *Forecast Source: INC and The World Bank.

Almonds World Almond Consumption by Zone Metric Tons. Kernel Equivalent 24 *Forecast Source: INC.

Walnuts World Walnut Production (MT) Kernel basis Others India Chile Ukraine Turkey Iran USA China 25 * Forecast. Source: INC.

Walnuts Countries MT % Total USA 74.537 40% Mexico* 19.305 10% Chile 14.028 8% Ukraine 13.729 7% Moldova* 12.186 7% China 7.222 4% Romania 7.110 4% India 6.809 4% Turkey 4.027 2% Others 27.602 15% *Transit country Countries MT % Total USA 19.026 11% Germany 16.022 9% Japan 11.870 7% Korea Rep. 10.577 6% Spain 9.376 5% Canada 7.508 4% Others 105.876 59% 26 Source: DESA/UNSD, United Nations Comtrade Database.

Walnuts Estimated Walnut Consumption COUNTRY Consumption MT 2010 2011 2012 2013 Consumption Consumption Consumption Consumption Consumption /cap/kg/year Consumption /cap/kg/year /cap/kg/year Consumption /cap/kg/year /cap/kg/year Consumption (2) MT (1) (2) MT (1) (2) MT Consumption /cap/kg/year (1) Consumption /cap/kg/year (1) Consumption /cap/kg/year (2) China 160.885 0,120 0,240 172.823 0,129 0,258 181.625 0,136 0,272 185.725 0,139 0,278 USA 161.703 0,523 1,308 128.363 0,415 1,038 144.493 0,468 1,170 144.124 0,466 1,166 Iran 48.576 0,653 0,989 45.848 0,617 0,935 47.398 0,638 0,967 48.395 0,651 0,986 Turkey 29.157 0,399 0,798 29.029 0,397 0,794 29.857 0,408 0,816 27.744 0,379 0,759 France 18.824 0,299 0,906 17.086 0,271 0,821 16.271 0,258 0,782 21.907 0,348 1,054 Chile 5.395 0,316 0,958 6.313 0,369 1,118 4.780 0,280 0,848 12.489 0,731 2,214 Germany 13.826 0,169 0,512 14.264 0,174 0,527 12.085 0,148 0,448 12.154 0,149 0,450 Japan 13.224 0,103 0,158 13.006 0,102 0,157 12.409 0,097 0,149 11.870 0,093 0,143 Korea Rep 9.262 0,187 0,567 9.749 0,197 0,597 12.416 0,251 0,761 10.995 0,223 0,674 Spain 8.972 0,195 0,591 8.952 0,194 0,588 7.951 0,173 0,524 8.955 0,194 0,589 Others 57.410 - - 52.930 - - 60.640 - - 55.742 - - WORLD TOTAL 436.510 0,063-509.208 0,074-506.013 0,073-584.836 0,085 - (1) Total consumption expressed in Kg per person. Based on UN Statistics Division population census. (2) Based on the estimated percentage of population consuming the specific product. 27 Source: INC.

Walnuts 28 Source: INC.

Walnuts World Walnut Consumption by Income Group Metric Tons. Kernel Equivalent High-Income Economies: >12,746$ GNI per capita Middle-Income Economies: 1,046-12,745$ Low-Income Economies: <1,046$ 29 *Forecast Source: INC and The World Bank.

Walnuts World Walnut Consumption by Zone Metric Tons. Kernel Equivalent 30 *Forecast Source: INC.

Potentialities & Challenges Growing world population. Expected to reach 9 billion by 2050 (from 7 billion today). Over a BILLION new middle class consumers in emerging markets. 500 MILLION in E.U. meaning 125 MILLION regular consumers (25%) Seldom consumers 40%. For an industry like nuts it represents an enormous potential, as consumers are becoming more health conscious. In terms of sustainability, switching to nuts helps the environment. Inshell Consumption (consumo con cáscara) Traditional Products: Christmas, Ramadan and Chinese New Year. In favor of Kernels (en favor del consumo sin cáscara) Crecimiento de la población mundial. Se estima que alcanzará los 9 mil millones en 2050 (de los 7 mil millones actuales). Más de MIL MILLONES de nuevos consumidores de classe media en mercados emergentes. 500 MILLONES en la Unión Europea, lo que implica 125 MILLONES de consumidores habituales (25%) consumidores esporádicos 40%. Para una industria como la de los frutos secos ésto representa un potencial enorme, dado que los consumidores se preocupan cada vez más de su salud. En términos de sostenibilidad, cambiar a frutos secos ayuda al medioambiente. 31

Potentialities Nuts reduce the risk of chronic illnesses such as heart disease, diabetes and some forms of cancer. PREDIMED Clinical Trial (ensayo clínico): 7,000 participants; 5 years People who ate tree nuts regularly were 28% less likely to experience cardiovascular diseases. HARVARD Epidemiological Study (estudio observacional): 118,000 participants; 30 years People who eat nuts cut death rates by 20%. 1,400+ new scientific studies in 2013. Los frutos secos reducen el reisgo de padecer enfermedades crónicas como las enfermedades del corazón, la diabetis y algunas formas de cáncer. PREDIMED: Los participantes que consumían frutos secos de forma habitual tenían un 28% menos de probabilidades de sufrir un evento cardiovascular. Harvard: Los participantes que consumían frutos secos de forma habitual reducían los ratios de mortalidad en un 20%. 1.400+ nuevos estudios científicos publicados en 2013. 32

Challenges Key challenges: Climate Change - Cambio Climático Sustainability - Sostenibilidad Food Safety - Seguridad Alimentaria Food Fraud - Fraude Trade Barriers - Barreras al Comercio Health: salt, fats and sugar content. Salud: contenido en sal, grasas y azúcares. More attention to ethically-endorsed production systems. Industry collaboration needed: suppliers, retailers, industry, authorities and researchers. New varieties. Más atención a la ética en los sistemas de producción. Es necesaria la colaboración del sector: proveedores, minoristas, industria, autoridades e investigadores. Nuevas variedades. 33

Climate Change Agriculture is directly dependent on climate. Heat, sunlight and water are main drivers of crop growth. In a global context, while some regions will be benefited of the effects of climate change due to longer growing seasons and warmer temperatures, adverse impacts will affect many regions with the reduction of winter chill, water flooding and drought. Shocking events: Extremely cold winters - Inviernos extremadamente fríos Post-blossom frost times - Heladas trás la floración Extraordinary rainfalls - Lluvias extraordinarias Extreme draught - Sequía extrema La agricultura depende directamente del clima. Calor, luz solar y agua son los ejes principales del crecimineto de las cosechas. En un contexto global, mientras algunas regiones se beneficiarán de los efectos del cambio climático gracias a temporadas de cultivo más largas y temperaturas más cálidas, otras muchas regiones se verán afectadas por la reducción del frío en invierno, inundaciones y sequía. 34

Climate Change World Nuts and Dried Fruits Growing Areas 35

Food Safety Microbiological risks, pathogenic bacteria, toxins, pesticides, heavy metals, viruses, allergens In the nut industry: salmonella, aflatoxins and pesticides. Industry: Testing Traceability HACCP Monitoring Legislation: Food law Directives and regulations Harmonization and standardization Quality assurance E.U. 36

Food Safety TOTAL EU RASFF NOTIFICATIONS FOR EDIBLE NUTS 2009-2014 TOTAL EU RASFF NOTIFICATIONS FOR DRIED FRUITS 2009-2014 555 179 453 383 241 251 256 103 110 121 92 115 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 37

Food Safety EU RASFF Notifications for Nuts and Dried Fruits from Chile 38

Food Fraud Food control & management in today s global complex supply chain. The horse meat scandal showed us how complex distribution channels for some products are. Local authority? Control y gestión de los alimentos en la compleja cadena de suministro actual. El escándalo de la carne de caballo nos mostró la complejidad de los canales de distribución para algunos productos. Autoridad local? 39

Thank you. International Nut and Dried Fruit Council Carrer de la Fruita Seca, 4 Polígon Tecnoparc 43204 Reus, Spain T +34 977 331 416 inc@nutfruit.org www.nutfruit.org