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ISTANBUL — Excavations in the antique Hittite City of Nerik have unearthed 3,000-year-old hazelnut shells, shedding light on the long history of the nut’s existence on these lands. If Turkish hazelnuts are such an ingrained part of the country’s history, with such a unique taste and aroma, how come Turkey cannot produce a global brand for hazelnuts?
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Hazelnut is a strategic product that represents the main livelihood for over 400,000 families in Turkey. Even if it is a product that could give Turkey an advantageous position in the global market, the discussions regarding hazelnut in Turkey mainly revolve around the harvest and the price. When it comes to added value and branding, there is a lot to be desired, as it is often the case with Turkish agriculture, because quality is sacrificed for the good of quantity.
Therefore, we should be insistent about a holistic approach — from production to marketing — because there is not much room for research and development or innovation in a sector which lacks vision and strategy. That’s the issue with Turkish hazelnuts: we do the hard work and others enjoy the riches.
Threats to production
While Turkey has its firm place among the international hazelnut growers, as the world’s largest producer, the quality of the production is poor. Data by the Food and Agriculture Organization of the United Nations says the world average for hazelnut production in 2022 was 113 kilograms per 1,000 square meters. Greece was the most productive with 257 kg per 1,000 square meters, followed by the U.S., Georgia, Chile and Azerbaijan.
Meanwhile Turkey, the biggest player in the cultivation and foreign trade of the hazelnuts, produced only 103 kg per 1,000 square meters — below the world average. Even this number drops to 93 kg when we look at the average of Turkey’s harvest in the past five years.
The brown marmorated stink bug is a pest which threatens the sustainability of hazelnuts by lowering productivity, spoiling some of the harvest or even increasing the free fatty acidity in the product. Research carried out by the Giresun University, in northeastern Turkey, found the acidity (that should be below 0.4%) to be up to to 0.7% due to the bug. All of these factors signal danger for the future of the brand value of Turkish hazelnuts.
Turkey produced 650,000 tons of hazelnuts in 2023, which is about 65% of the over a million tons of annual worldwide production, giving Turkey 50% of the international export market. Data from the Turkey Exporters Assembly (TIM) shows that hazelnuts were the 21st out of the 30 most exported products from Turkey, bringing in .9 billion in 2023 — a 6.7% increase compared to .7 billion in 2022.
It doesn’t look so bad, right? But the missed opportunities become clear when you look at the full picture.
Declining market share
Italy and Germany buy the most of Turkey’s hazelnut exports — 28.5% and 22.9%, respectively. They are followed by France (7.9%), Poland (5.7%) and Switzerland (4.5%). But Turkey is losing market share in 11 of the top 25 countries that buy hazelnuts and these losses are 10% and above in Italy, the U.S., Canada and Croatia.
Moreover, a foreign company which used to import hazelnuts from Turkey bought its Turkish supplier, and the Turkish competition authority approving that sale — diminishing the domestic income coming from hazelnut sales. As of now, there are 400,000 disorganized cultivators and 15-20 exporters of different sizes in the market; the biggest is the foreign one. Although the state tries to act as a regulator for the price of the hazelnuts, growers end up losing out, when you look at yearly data.
But the biggest loss happens after the product is exported. Most hazelnuts are used for chocolate (70%), while 20% is destined to pastries and biscuits. The remaining 10% is for the industries of dried nuts and oil. That’s where Italy strikes the eye. The Italian company Ferrero, which owns the famous brand Nutella and presumably buys 70-80% of its hazelnuts from Turkey, is a textbook case to answer the questions of “how to create added value” and “how to be a successful brand.”
Unfair global trade
Ferrero gets its hazelnuts from Turkey and cacao from countries such as Ghana and the Ivory Coast. Some of the palm oil is imported from Malaysia and Indonesia while sugar is bought from Brazil alongside various European countries.
The innovative company creates successful brands with these raw materials — Nutella first and foremost — and increases its gains each year. Ferrero’s turnover increased 21% in the 2022/2023 fiscal year and reached 17 billion euros. This is not a hard goal if you have vision and strategy alongside a holistic longterm policy for agriculture.
On the one hand there are .9 billion worth of Turkish annual exports. On the other hand, there’s a single foreign company which sells products mainly made with Turkish raw material, which makes a turnover of 17 billion euros.
You tell me, who’s doing the hard work and who’s enjoying the riches?
