Pistachio growers face vote to expand industry oversight

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    JD Franklin shows off a nearly perfect pistachio at the Horizon Nut Company processing plant in California's Central Valley. Franklin is the senior vice president of operations at the company.

    - Jennifer Collins / Marketplace

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    Bins of pistachios that have been dried and hulled waiting for further processing at Horizon Nut Company.

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    Pistachios roll out of the roaster, ready for packing. While the salted, in-shell pistachios are still the most popular in the U.S., there's growing demand for the green "meat" on its own.

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    Workers sort pistachios at Horizon Nut Company, which processes about 35 million pounds of pistachios a year and growing. The U.S. produces about 500 million pounds a year.

    - Jennifer Collins / Marketplace

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    Pistachios on their way to be hand sorted at Horizon Nut Company.

    - Jennifer Collins / Marketplace

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    American Pistachio Growers spends about $5 million on advertising a year. This is its mascot -- a super pistachio -- yet to be named.

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    Pistachios grow with a hull, which is removed soon after it is picked.

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    Clumps of pistachios growing on trees in California's Central Valley.

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    Pistachio trees in California's Central Valley.

    - Jennifer Collins / Marketplace

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    One pistachio before it's been hulled.

    - Jennifer Collins / Marketplace

Adriene Hill: Today growers of pistachios are voting on whether to increase industry oversight. The thinking is it could make these little green nuts more attractive to overseas importers, and expand the market for pistachios abroad.

Jennifer Collins reports on the little nut that cracked its way into a billion dollar industry.

Jennifer Collins: Horizon Nut Company in California's Central Valley hulls, cleans and sorts almost 10 percent of the U.S. pistachio crop every year.

J.D. Franklin: What we're looking for is an unstained as bright as white or cream colored shell as possible.

J.D. Franklin is the head of operations. And every so often he does his own quality control checks.

Franklin: Heavenly.

That "heavenly" taste can take at least six years. But when the trees mature, they produce for decades. Jim Zion, of a grower cooperative, says that's attracted unlikely financial backers.

Jim Zion: The stock market obviously is not a place to go. And so you have seen some retirement funds coming in.

And partly that's because --

Bob Klein: The return on pistachios has been quite good.

Bob Klein oversees pistachio production in the U.S. By some accounts, investors can triple their money in 20 years. Klein says those returns have created a nutty situation with the largest processor in the industry, Paramount Farms. Maybe you've heard its tag line?

Ad: Get Crackin'.

Klein says Paramount split from a trade group a few years ago -- over marketing disagreements.

Klein: The large processor said, 'Well, we pay the bulk of the assessments so we should have more "say" than we currently have.'

Now, Paramount pays the bulk of the advertising -- reportedly $30 million a year. This fall, the smaller producers ramp up their own campaign. They spend about $5 million on promotions here and overseas.

Klein: Each side would say the other was irrational and illogical.

But Klein says the rivalry may be a good thing in the long run.

Klein: Anything that puts pistachios in people's minds will make them more likely to buy.

And with the crop potentially doubling in a few years, he says there's about to be a lot more pistachios for people to buy.

I'm Jennifer Collins for Marketplace.

About the author

Jennifer Collins is a reporter for the Marketplace portfolio of programs. She is based in Los Angeles, where she covers media, retail, the entertainment industry and the West Coast.


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