Growers

 

Dear Growers,

Wholesome Nut Company is honored and grateful to work with some of the best growers from the best growing region in California. We were walnut growers ourselves long before we started processing, so we understand the desires and needs of growers. Trust is foremost, and we do not take this responsibility lightly. Wholesome Nut Company promises to work tirelessly on our growers’ behalf. We treat our growers as we would like to be treated, and we are 100% fully transparent with our growers from beginning to final pay-out.

We work diligently as a company to receive, sell, process, and ship high quality walnuts as fast as we can each season. We offer both bulk and retail packaging, and we ship nationwide and to over 50 countries in all major international markets, including but not limited to Europe, Asia, the Americas, the Mediterranean, the Middle East, and Australia/New Zealand.

We continuously analyze the industry and markets, and we are not afraid to take aggressive pre-season and early-season sales postures if we feel they are warranted. Because of this, and due to our growing brand and quality recognition in the marketplace, Wholesome Nut Company has been successful in attaining one of the highest “sold” percentages in the industry early in the season.

The California walnut market faced significant pressure in the 2015/2016 season due to several factors: (i) high carry-in of last year’s walnut crop; (ii) overhang of downward walnut price trends that began early-season last year and carried through into this crop year; (iii) a reported strong walnut crop in China/significant decrease in demand from that region of the world; (iv) an expected record California walnut crop/supply situation (which is expected to last several years); (v) a strong U.S. dollar; (vi) supply vs. demand dynamics for several U.S. nut commodities; and (vii) the relatively poor, overall quality of California’s new walnut crop. In the last several weeks, however, we have seen California walnut market prices rebound “off the bottom” with fairly strong demand coming from the Middle East/Turkey. Despite this demand, prices are well below last year, but at least they have stopped going down for most Walnut product types.

Because of our aggressive pre-season and early-season sales strategy—and our strong brand/quality grower base—we did not have pressure this season to sell “at the bottom” and we have been able to be more selective in terms of who we sell to, what prices we were willing to sell at, and how much product we needed to sell at lower market levels.

Despite the difficult market, we believe Wholesome Nut Company will be able to consistently achieve superior grower returns vs. industry averages for several reasons:

  1. We carefully watch the market daily and sell accordingly;
  2. Our walnuts come from the best growing region yielding the best quality/lighter colored product;
  3. Our superior in-line shelling and cracking process—which delivers shell-free kernel product with a greater-than-industry-average halves crack-out rate;
  4. We will get to a 100% sold position much faster than most handlers;
  5. We are cost conscious, and have lower costs and overhead vs. our competitors;
  6. Our greater pay-out percentage formulation vs. the industry’s (see chart below); and,
  7. We do not have an indebted, huge, brand new large shiny facility and related overhead/debt service to support.
 
Wholesome Nut Company also has a fully transparent grower pay-out & processing model that is vastly different than all others in the walnut processing industry. We offer both short and long-term agreements with our growers. Here is a snapshot of our grower pay-out and processing model vs. most walnut handlers:

 

Category:

Current Walnut Industry Processors:

Wholesome Nut Company Processing Model:

Grower pay-out model

Grower pool

Individual grower lots, set processing fees, and grower shares in % of profits after set grower % pay-out

Average pay-out as a % of sales price

75% – 87%  (depending on variety)

88% – 92% of sales price + 30% – 50% of profits

 

Typical payment schedule/pay-out timing

 

50% early to mid-season; 25% December; 15% spring; balance summer

Typically within 45-70 days of product shipment from port

 

How pay-out is determined

Industry decides based on sales prices, competition, plant debt service, profits, special deals with growers, etc.

Set formula with highest pay-out % in industry.  Also, only profit-sharing model in industry.

How tonnage is sold

Bulk-pooled processing & sales

By individual grower lots

Producer’s lien rights?

Waived as part of handler’s contract

Yes a grower retains such rights

Marketing & brand who owns brand?

Processor’s brand

Wholesome Nut Company or grower’s own brand (if desired); bulk & retail packaging available

Share in profits from grower’s quality?

No

Yes

Regional quality bonus?

No

Yes

Grower control & input on when crop sold?

No

Yes

Grower ability to sell pre-season to get $$ faster?

No

Yes

Does each grower know what their product was sold for/transparency?

No

Yes

Is the grower paying for new buildings/plant, equipment, & overhead?

Yes–likely

No

 

Because of the above Wholesome Nut Company’s historical grower payout averages have been well-above most processors.

We also keep our growers informed, giving them up-to-date information on pricing and industry market trends. Additionally, at the end of the pack-season, each and every one of our growers receives a full accounting and spreadsheet which details the following:

  • Amount of kernel or in-shell lbs. produced from delivered walnut tonnage;
  • Quality determination of grower lbs., by product type, size, color, and pack-style;
  • Pack-out details from such product;
  • Contract sales prices for such product;
  • Processing costs for such contracts;
  • Fixed grower pay-out—by variety/quality/recovered kernel pound or in-shell pound—as a percentage of each contract sales price;
  • Resultant profit per pound; and
  • Grower’s profit sharing portion of said calculated profits, by lot number and product type (in addition to each grower’s fixed grower pay-out %).

 Wholesome Nut Company has the highest grower pay-out formulation and the most transparent grower payment calculation in the industry that we are aware of. We aim to make our growers some of the most successful and happiest growers in California. We feel that our unique model benefits our growers by increasing their profit, providing crucial data and information about their product and the market, and cultivating an open, honest, transparent relationship.

–your friends at Wholesome Nut Company