Growing production in Australia’s ‘tree nut’ industry – as significant almond and macadamia orchards reach maturity over the next few years – will provide opportunities to meet growing international demand according to new industry research.

In its just-released report, Australian Tree Nut Outlook – opportunities and risks in almonds and macadamias, agribusiness banking specialist Rabobank says Australia’s tree nut industry is currently in a “period of growth”. And, with this, comes the opportunity to meet the growing appetite for tree nuts in export markets – particularly China – as well as develop innovative product offerings to increase local demand.

Report author, RaboResearch analyst Pia Piggott said, “Positive consumption trends in tree nuts and more broadly in snacking will drive Chinese consumption growth over the next decade”. She said China remains the most favourable market for Australian macadamias, with over half (54 per cent) of Australia’s total exports shipped to China in 2023.

The Rabobank report says Australian almond exports have grown faster than the global average, at a nine per cent compound annual growth rate (CAGR) over the past decade compared with global exports at five per cent. Still, Australia currently accounts for only 9.5 per cent of global almond exports, with 110,000 metric tons of kernel weight (KWE) exported in 2023.

For macadamias, Australia represents 25 per cent of global trade, reaching 17,2000 metric tons KWE in 2023. When it comes to the local Australian market, Ms Piggott said that health and convenience trends haven’t been enough to grow domestic tree nut sales. And as innovative offerings of tree nut products are presently limited in the domestic market, she said, “we see this as an opportunity to grow local demand”.

“Exports are the primary market for Australian tree nuts, however, the domestic market consumes 19 per cent of almond supply and 22 per cent of macadamia supply,” she said. For Australian consumers, Ms Piggott said tree nuts are most often consumed as a snack.

“With the qualities of being tasty, quick and easy to consume, and energising, the healthy nutritional profile makes tree nuts a go-to product, aligned with broader convenience and health trends. However, cost and more exciting alternatives such as cereal, chips and yoghurt remain barriers to consumption. Despite significant shifts in wholesale prices, asymmetric price transmission has limited consumers’ response in demand and as such supply to the domestic market has remained stable,” she said. ?

Compared to global retail environments, Ms Piggott said innovation in tree nut products in Australia remains limited, particularly regarding flavour profile.

“In the US, the range of flavoured tree nuts rivals potato chips. Viral trends have caused Australian internet searches for pistachio nuts to rise, but innovative offerings are missing at a local retail level. For tree nuts to compete against substitutes and grow demand, investment in product innovation is required. With many health claims, tree nuts are a go-to ingredient to appeal to consumers in the snacking category,” she said.

As current almond and macadamia orchards in Australia mature over the next few years, Ms Piggott said, “further orchard development opportunities exist, but production growth will be restricted by resource availability and rising global competition”. ?

Permanent plantings in the Murray Darling Basin – a key almond-producing region – are at risk of water shortfalls in periods of drought, although almonds are likely to remain the highest-value “use case” for water.?

“Record farmgate returns in 2020 led a period of growth in investment in new macadamia plantings, with the total orchard area reaching 41,704 hectares in 2024. Subsequently, the last two seasons have been difficult for producers with increased margin pressure from higher costs due to inflation and global increases in production bringing prices down,” Ms Piggott said.

Readers also enjoyed our story about Success in the Gig Economy: 5 Strategies for Thriving as a Freelancer or Consultant