September 12, 2018 - Author: Trey Malone
When I moved to Michigan, I knew the agriculture would be different… and Michigan has delivered. The climate, the soils and the people have all proved to be a different breed when compared to my home state of Kansas. In the past year, I’ve had discussions with growers involved in tart cherries, cider apples, hops, soybeans, and more. So many different crops, in fact, that it’s becoming difficult to keep everything I’ve learned straight! In an effort to help myself out, I’ve decided to keep track of the things I learn in the field via this blog.
For the first crop, I’d like to talk about chestnuts. This is the crop that is probably the furthest outside of my knowledge base – prior to this year, I’d never even eaten a chestnut! The learning curve has been extremely drastic, but here are four things I’ve learned about this crop.
1. Chestnut trees can be extremely difficult to grow.
Last week, I had the opportunity to attend the Midwest Chestnut Producers Council (MCPC) annual farm tour. They hosted the event at a new orchard outside Ravenna, MI, where the grower talked about the difficulties he had over the past couple years. While I’m no agronomist (I’m hardly a gardener), his discussion of the trials and tribulations associated with establishing his 10 acre orchard was eye-opening. Although an established orchard can thrive for decades (if not centuries), planting the trees requires many considerations as the gap between planting and nut production is generally five to ten years!
In the orchard we toured last week, the grower had dug his holes slightly too deep, which prevented adequate oxygen from reaching the roots, killing more than half of his saplings. Annual weather patterns also influence the livelihood of chestnut saplings and mature trees. Last year was particularly challenging for Michigan growers because the fall season was wetter and milder than usual. This caused the trees to ramp down production more slowly and enter dormancy late, leaving the trees vulnerable to freezing winter temperatures. Despite the warmer fall temperatures, the winter temperatures plummeted near the danger zone for the chestnut trees’ hardiness (approx. -20 degrees Fahrenheit) a few times. To make matters worse, the orchard was surrounded by large trees on all sides, which trapped cold air in the winter and contributed to the demise of his saplings.
2. The average American consumer knows shockingly little about chestnuts.
When I was asked to present something to the MCPC back in Spring 2018, the first thing I did was to go to the Food Demand Survey to see if any consumer data had been collected in the recent past. To my delight, Bailey Norwood had recently sent a survey out to 1,022 U.S. consumers. More than 60% of U.S. consumers could not recall ever trying a chestnut! Almost half (14.5%) of those Americans who had tried a chestnut had only consumed one in the last year.
3. Growth in U.S. consumer demand for chestnuts is likely to track immigration patterns.
Bailey surprised me again, as he had just recently surveyed 1,000 Chinese consumers to compare nut preferences across the United States and China. The results shocked me. Where more than half of Americans hadn’t tried a chestnut, almost every single Chinese consumer (97%) was extremely familiar with the product.
4. Michigan chestnut growers are incredibly proactive, resilient, and entrepreneurial.
Probably my biggest takeaway from the Michigan chestnut growers so far is their dedication to promoting the industry. I’ve attended two meetings thus far, and was very impressed by the passion of the group’s leadership. These people are willing to do whatever it takes to grow the chestnut industry! As is often the case in agriculture, they’ve had “up” years and “down” years, and while that variability might push other growers apart, it seems clear to me that it actually brought the leadership of the chestnut industry together.
Though currently understudied, the effects of this innovative marketing strategy can still be observed in a few random places across the state. For example, while having dinner at Hermann’s European Café in Cadillac, Michigan, a month back, hanging above the entrance was an article from the Chicago Tribune titled, “GOOD EATING: Return of the chestnut.”
One worthwhile project I’d love to see conducted is an “event study” on the effect of this marketing strategy on chestnut prices. This would be methodologically similar to McKenzie and Thomsen’s 2001 Journal of Agricultural and Resource Economics paper on the effect of E. Coli 0157:H7 on beef prices, but of course the evaluation would be focused on the success (or failure) of a marketing strategy.
Thus far, I see nothing but room for optimism regarding Michigan chestnut demand – especially when I look at the competition. Out of curiosity, I got on Amazon and ordered a package of organic chestnuts from Spain. If I were to describe the packaging, “unappetizing” would be putting it lightly. The vacuum-sealed chestnuts were exceedingly squishy, the smell seemed off, and the shiny plastic covering the chestnuts did not appear too alluring. Michigan chestnut growers have a clear comparative advantage over these competitors, as they can sell fresh chestnuts – which are far more appetizing than this hyper-processed alternative. Prior research suggests fresh chestnuts are likely best marketed via institutional buyers such as restaurants “in order to create a positive experience for consumers that should lead to an increased interest in consuming chestnuts.” (Gold, Cernusca, and Godsey, 2004; pp. 588).
In terms of future marketing research related to chestnuts, the published papers I’ve been able to find are somewhat dated. For example, Gold, Cernusca, and Godsey collected survey data from 232 participants at the 2003 Missouri Chestnut Roast. Their work, published in HortTechnology in 2004, suggested that consumers at this roast considered the locally grown nature of chestnuts to be the most important attribute. Even at the Missouri Chestnut Roast, more than 60% of attendees had never tried a chestnut before that day.
That study was followed up via the use of conjoint analysis (read: discrete choice experiment) in 2007 at the same festival. The surveyed sample was significantly more likely to have tried a chestnut, as only 34% had never tried a chestnut this time. Their findings, published in HortTechnology in 2009 (n=104), suggest that the festival participants again valued the “localness” of the product they were consuming and that price was the least important attribute. I would like to revisit this study for a number of reasons. First, the study is over a decade old, and consumer preferences are likely to have even changed. Second, it is unlikely that the festival participants are representative of the chestnut consumers more generally. Third, I am skeptical of the (relatively) small price coefficient and believe that consumers at a local foods festival are likely to overstate their willingness to pay for local foods. I’d like to re-run this hypothetical experiment with different attributes and focus on a representative sample of U.S. consumers. Then I’d like to conduct non-hypothetical choice experiments on a stratified sample of urban consumers – perhaps at farmers markets or at a sensory lab.
To reiterate, I am NOT an expert on chestnuts by a country mile. That being said, Michigan State University has a strong handful of dedicated folks who have probably forgotten more about chestnuts than I’ll ever know. Here are links to contact pages for a few of them
- Dan Guyer, Department of Biosystems & Agricultural Engineering
- Dennis Fulbright, Professor Emeritus, Department of Plant, Soil, and Microbial Sciences
- Erin Lizotte, MSU Extension, Agriculture and Agribusiness Educator