Pistachio growers are going nuts


February 24, 2020

It’s almost Fat Tuesday, y’all. Here’s a bit of Crescent City trivia for you: A single brand of red beans accounts for 90% of the dry beans sold in New Orleans, and around $61m in annual revenue. Can you name it? Find the answer at the bottom of this email. Today:

  • Pistachio problems hit a high note
  • Grocery delivery is truly cutthroat
  • The biggest party is getting on the boat
Green Gold

A pistachio power struggle cracked wide open… and the Middle East is going nuts

Long before the world’s best-branded nuts danced to “Gangnam Style” in a Super Bowl ad, pistachios were a Persian delicacy popular among history’s most famous food snobs, from the Queen of Sheba to Roman emperors.

But while Persia — or modern day Iran — was the undisputed global capital of pistachio production for more than 1k years, the balance of pistachio power has finally shifted toward the US.

Now Middle Eastern pistachio growers are going nuts to compete. 

Iran was once the undisputed Prince of Pistachios

The nuts, which are native to the Middle East, started making their way to the wider world during the conquests of Alexander the Great in the 4th century BCE. 

Production slowly took root in Greece and Italy in the centuries thereafter, but Iran remained the globe’s green-nut giant. 

Then, America cracked the market

Although nutty American botanists had been dabbling in pistachio cultivations since the 1920s, widespread pistachio plantings — mostly in California and the American southwest — didn’t start until the 1960s. 

The first commercial crop of US pistachios hit markets in 1976. Since then, the pistachio harvest has increased 599%.

But America didn’t outshell Iranian nut growers right away

Between 2004 and 2009, Iran produced 40% of the world’s pistachios, while America produced just 33%.

But from 2014 to 2019, Iran’s share fell to 27%… while the US’s grew to 47%.

Iranian pistachio producers are also struggling to combat warming weather and dwindling water supplies, which have caused widespread pistachio shortages.

The shortages have inspired… new competition

Massive multinational nut distributors are considering cultivating “green gold” in countries like Georgia, Uzbekistan, Azerbaijan, Romania, and even China and Australia.

If they take root, these nut operations could blossom into big businesses: In America, nut businesses have become multibillion-dollar empires

In Georgia, which has a population of just 3.7m, growers estimate the country’s nut exports could become a $4.5B business.

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Delivery Wars

Why the last mile is the biggest puzzle in the produce aisle

The delivery company Skipcart is skipping out on its partnership with Walmart, in another supply-chain breakup for the grocery giant.

The move highlights a dilemma in the war to bring brown paper bags right to your doorstep: Grocery shopping is a drag. Online delivery is booming. Why is it so hard to make money doing it?

It’s stickier than a cleanup on Aisle 7

The competition to deliver your groceries is tight. The task can be a logistics nightmare.

  • FreshDirect, which is staging a comeback after years of struggles, angered customers by delivering broken eggs and rotten fruit.
  • Before Walmart ended a delivery partnership with Deliv, Reuters said drivers sometimes had to wait 40 minutes to collect orders.
  • Delays have consequences: One survey found 80% of customers would switch brands if they didn’t get their stuff on time — or if they couldn’t track the goods all the way home.
  • In another survey, 97% of executives said grocery delivery is unsustainable unless it can be done cheaper.

Ben Jones, Skipcart’s CEO, told Bloomberg that the grocery-delivery model has a hole in the bag.

“It doesn’t work today,” he said, “and it’s not going to work six months from now. We’re all losing money.”

One possible solution: our robot overlords

In December, Walmart announced a pilot program to test autonomous grocery delivery.

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Small Business of the Week

This founder optimized in-store music to maximize sales

Have you ever stood in a store and thought, “I wonder if this music is making me buy more stuff?” Neither have we. But last week, Marketing Melodies dropped into our small business database.

Dean Cherny started the company in 1989 (it’s not affiliated with TSwift), combining his fledgling DJ career with a strategic marketing assignment. Back then, stores focused heavily on visual displays. He wondered, “What about music?”

His project supplied bespoke music to retailers. He managed to complete the assignment and nab his first client (which still pays him 3 decades later). 

In the early days, Cherny mixed music onto cassettes. With the advent of the mobile phone, the business evolved into an app and has expanded into 5k retail stores worldwide.

The brand has grown from a background music supplier to a fully fledged retail technology company, supporting live events and augmented-reality experiences.

This year, Marketing Melodies is looking to integrate machine learning into its app storePlay. Cherny wants to create dynamic playlists that optimize sales by adjusting tempo or style.

  • Founders: Dean Cherny
  • Employees: 4
  • Years in business: 30
  • Cost to launch: $5k
  • Funding methods: Personal savings
  • 1st-year revenue: $10k
  • Current annual revenue: $2.5m

Want your story featured? Fill out our Small Business survey. See financials of 700+ companies by subscribing to Trends.

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Snippets

🤖 Meet your new favorite Twitter bot: @real_human_vc. Sample tweet: “In an age of infinite innovation, why create what you think people will use?”

🏨 Smartphone apps threatened to make the concierge irrelevant. So hotels are going offbeat — there’s a concierge for teddy bears, crawfish, and weed recommendations.

💼 The jobs of marketing specialists, financial advisers, and computer programmers are some of the most likely to be disrupted by artificial intelligence.

🚚 For the lil’ Elon Musk in your life: Mattel created remote-controlled Cybertrucks (complete with broken-window stickers).

⚜️ Your trivia answer, courtesy of Bloomberg: Camellia. Nielsen says its red beans are the No. 1 seller in America.

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