American Hazelnut Company Logo, American Hazelnut Company

A Profile Of The American Hazelnut Company

Matthew Baron New Products

American Hazelnut Company Logo, American Hazelnut Company

The American Hazelnut Company started in 2014. Located at the Kickapoo Culinary Center in Gays Mills, WI. They are a grower-owned processor and marketer of hazelnut products. The company is a consortium of 16 grower-owners. Each farmer, working together, to get customers a quality hazelnut with a superb flavor. They are growing hazelnuts from farms in the Upper Midwest. These farms traditionally grew nothing but corn and soybeans.

Returning to the tradition of growing hazelnuts means diversity and change back to a crop that once thrived in the Upper Midwest. They currently buy in-shell hazelnuts from grower-members and process them into a range of products including the raw whole kernels, cold-pressed unfiltered oil, and hazelnut meal.

Customers are getting more focused on purchasing quality oils. These oils are now being made from a variety of nuts, including hazelnuts. Doctors and nutritionists consider this oil much healthier when cold pressed. The process of making oil using heat can reduce the flavor, aroma, and nutritional content of the oil. Hazelnuts are one of the nuts that are gaining popularity as healthier when cold-pressed.

Hazelnut Products

Consumer Awareness

Consumer awareness is the main challenge with hazelnut products in America. Customers are drawn to these Wisconsin nuts and oils for two main reasons. First, Wisconsin is local. Today, customers spend additional time to hunt for local foods that are grown close to their home. Wisconsin right in the middle of the country. Second, hazelnuts are an alternative to other nuts that have been causing health issues. There has been a well known increase in Americans that are allergic to peanuts. Overall, worldwide consumers have found allergies to specific nuts that are more common in everyday dishes. Some customers for hazelnut products are allergic to the more commonplace nuts including almonds, walnuts, pine nuts, and more.

To put hazelnuts in a broader context, Turkey is the number one grower of Hazelnuts. They grow 95% of the world’s hazelnuts. Turkey is to hazelnuts as what America is to almonds. Currently Americans do not have a great demand for hazelnuts and hazelnut spread products, the hazelnut oils also have a very limited following. Surveys in America have shown that customers are becoming more interested in the hazelnut flavor and health benefits. A reason for this growth in sales is the reality that hazelnuts run lower in price than spreads made from more expensive nuts. Consequently, this contributes to the boost in popularity of Hazelnut based milk alternatives.

The hazelnut oil that The American Hazelnut Company manufactures and sells has the steepest hill to climb. Gaining consumer awareness is a very specific challenge. Certainly, there are well known oils that will continue to be top of mind for supermarket consumers. Olive and vegetable oil are at the top of a customers’ mind. Then you have other nut oils like peanut and almond oil that have big brands and budgets behind them.

Nutella: The King Of Hazelnut Branding

We wrote a blog post about the history of Nutella. No conversation about the hazelnut would be complete without referencing the grip that Nutella, and their parent company Ferraro, has on the hazelnut spread market. Since the late 1940’s, Nutella has outgrown Italian hazelnut production. Growing to the point now where Nutella is the number one use of the hazelnuts being grown in Turkey!

So, how do you get Americans to love the hazelnut as much as they do worldwide? There is a lot of headwinds with establishing a new product. It takes investment and time and the marketplace needs to like the product. Hazelnut oil is a natural fit for The American Hazelnut Company. Nut oil sales are one of the fastest growing segments of supermarket sales. Customers moving away from traditional oils, into nut oils need to be educated about hazelnuts. That education can be a long and difficult course that could take years.

China…Again

The number one customer of the American Hazelnut Company outside of America is China. The NY Times reports that China is the number one importer for all nuts grown in America. More than just nuts they are the number one customer for all food growers across America.

Wikipedia List Of Top Hazelnut Producing Countries:

Wikipedia Hazelnut Production In Tons

With Turkey being the number one producer by far, a unique set of circumstances has formed. Most of the hazelnuts that Americans consume come from Turkey. Most of the hazelnuts that America grows gets exported go to China. The reasoning for Michael Lijia is simple; Americans are more focused on saving money than getting a better quality product. “How can I get something cheaper as opposed to something better?”

The reason that the Chinese import the hazelnuts from Oregon is because they’re of much higher quality than what they can get out of Turkey. Most of what they import is for Chinese New Year. It is part of their celebration, part of their traditions, and for that holiday they want that higher quality nut. The hazelnuts that China imports from Oregon are large and have a better quality than what we import from Turkey.

Michael Lijia hypothesizes that Nutella uses a higher quality hazelnut for their famous spread. Ferraro uses only a very small amount of Italian hazelnuts today. Even though the headquarters of Ferraro is located in Italy. They source from a lot of places, but most of it is coming out of Turkey. Michael believes that they probably get the cream of the crop. What we get in America is stuff that’s been the leftover from the Turkey farming and is of a lower-cost production. Other lower-cost production countries also surround Turkey. Azerbaijan creates a lot of hazelnuts and then you have Syria as well another large exporter of hazelnuts.

What will The American Hazelnut Company do next?

What’s a better seller? The oil or the flour? The American Hazelnut Company is going to develop a product that the marketplace desires. Products that can take the resources you have and create products without having to go spend a lot of money. It should be noted that there have been discussions of producing a Nutella-like product. On the other hand, there are big issues in developing, designing, and marketing when launching a similar hazelnut spread product to Nutella. The company is holding off developing the spread market while focusing on the oil and flour markets because of start up costs.

The Creation Of An American Hazelnut Milk Brand

Top of the new product wish list is hazelnut milk. 2019 saw the increasing market share of alternative milks. Almond milk has been seeing double-digit growth for years. Based on trip to the supermarket, we are living during the rise of cashew milk, coconut milk, and oat milk. Similarly, walnut and hazelnut milks are certainly looking to grow over 2020.

Jason Fischbach, a Process Developer from the University of Wisconsin Extension, has been using the community kitchen in their college for the primary processing of hazelnut milk. Taking the kernel out of the shell is the primary processing. They had a contest for product development at the University and they came up with hazelnut milk. They took some hazelnuts. I assume they were whole kernel. We don’t know if they roasted them. Jason Fischbach didn’t tell us the exact recipe. They used a little bit of honey because people tend to like sweet. He said that it was pretty good. We have not got to taste it at The American Hazelnut Company.

U.S. Retail Sales Of Milk Substitutes

Leading Alternative Milk Products w/Compound Annual Growth Rates)

Almond Coconut Soy Milk Sales

The American Hazelnut Company wants to find enough high quality hazelnut supply to do something like milk. Here’s the other problem with hazelnut milk, when you make nut milk, you grind it into a little powder. Alternatively, for the process of making hazelnut milk, you end up with large hazelnut chunks. They sit in the water and the flavors infuse into the fluid. There is an issue of finding a use with the rest of it. We want to use this industrial byproduct to sell to others. We would need to first find a marketplace that has a use for it. Including the most common uses of  animal feed like cattle feed and hog feed.

Michael Lijia has been surprised that the oil does not sell as well as it should in the marketplace. If using a similar oil, in all respects, the flavor is different and you may not want to use hazelnuts in the same place you use olive oil. That flavor doesn’t work very well together. He talked to a customer who made hummus out of hazelnut oil. She was curious and I said, “I will give you a bottle. Take it and use it. All I want is for you to come back to me or write back to me. Tell me what your experience is.” She responded, “With hummus, it’s just not going to work. There’s a certain flavor expectation that you want from your chickpeas and olive oil gives it to you.”

The Cold Pressed Machining Process For Hazelnuts

The process is called ‘cold-pressed’. What it really means is that you’re not adding any more additional heat than necessary to get the process going. Due to the process, the friction from force in the machine creates enough heat that it breaks down the cell walls. Consequently, releasing the oil. In addition, they will add just a little bit of heat to help the oil flow and that’s just a natural formation of the friction and the pressure it’s caused. The oil drips out the bottom of the press and with it comes these little finds. The oil settles without filtering the oil. We decant it off the top for the premium hazelnut oil. So, the excess material settles to the bottom. We decant the oil off. The industrial product that is left over is large hazelnut grinds that are mixed in with some oil.

One woman has created a cookie recipe, she says, works great for that. Now, can we develop a cookie recipe using this? There are other products that we have our eye on with our raw hazelnut material recycling.

A Message For Those With A Nut Allergy

The majority of “nut allergies” are peanut allergies. In addition there are still many people that are allergic to tree nuts. There’s often confusion between peanuts and tree nuts. Peanuts are legumes, not nuts; still, between 25% and 40% of individuals who are allergic to peanuts also react to at least one tree nut, according to studies conducted by the National Center for Biotechnology.

Taken From An Interview With Michael Lijia, The American Hazelnut Company. Written By Matthew Baron, CEO Of Gourmet Nuts And Dried Fruit.