Ferrero’s nutty idea a sweet one for Aussie agriculture

After his success planting almonds 10 years ago, NSW farmer Denis Dinicola is closely watching the hazelnut saplings at Italian confectionary giant Ferrero’s new farm.
Through its subsidiary Agri Australis, the Italian chocolatier is building Australia’s hazelnut industry from the ground up, and is investing $70 million in a hazelnut production facility in the NSW Riverina.

“A lot of people are looking at it [hazelnuts] but we just don’t know enough about it. Everyone is waiting to see someone else do it first," says Dinicola, a second-generation farmer growing rice and almonds in Griffith, a stone’s throw from Ferrero’s farm.

With all the hype around the global food boom and the Abbott government’s pledge to make agriculture one of five key pillars in the national economy, Ferrero’s bold plan to turn Australia – currently a hazelnut importer – into a regional supply hub will test the nation’s ability to capitalise on its opportunities in agriculture.

Founded in 1946 by Pietro Ferrero in Italy’s Piedmont region, the home of car maker Fiat and world famous football club Juventus, Ferrero has grown to become a global heavyweight. The maker of Ferrero Rocher, Nutella and Kinder Surprise pulled in €8.1 billion ($11.7 billion) of revenue in 2012-13 and commands 11 per cent market share (by value) of the global chocolate market.

In May, the company began planting one million trees across 2000 hectares near Narrandera in south-west NSW.

Agri Australis general manager Alessandro Boccardo started importing trees into Australia from Ferrero’s nurseries in Chile in 2011, at the tail-end of Australia’s decade-long drought.

“Why Australia? [The country has] A very professional set of skills and agricultural know-how, and for our risk diversification strategy," Boccardo says. “We are setting up hazelnuts in ­different parts of the world and focu­sing on the southern hemisphere for diversification in terms of climatic ­conditions and counter-seasonality."

Australia could become a regional hub
Australia currently imports around 2000 tonnes of hazelnuts a year. The NSW Department of Industries anticipates hazelnuts could become a $200 million export industry for ­Australia.

“Our global aim is for Australia to become a hub for Asia Pacific in producing and exporting hazelnuts," ­Boccardo says. “There is already a trend of increasing consumption of nuts and hazelnuts in particular in Asia. It is growing at a very good pace and could drive the future for Australian farmers for the next 10 to 20 years."

Ferrero is the biggest user of hazelnuts in the world, consuming around 25 per cent of global supply. But it doesn’t want to be a big landowner in Australia or to run its own farms.
The business plan is to set up a number of model farms and then supply local farmers with knowledge and cheap trees from Ferrero’s nurseries.
Dinicola started growing almonds 10 years ago when his son wanted to come onto the farm and he was ­worried about getting water allocations for his rice.

“I was the first in the Griffith area to plant, I was the guinea pig. I’ve had two mates plant a couple of years after me and they are as happy as anything, it’s the best thing they have done," he says.

“The Riverina is going to be the future nut growing area. Ten years ago, nuts were only just being talked about. There’s a lot of water and I think a lot of growers will start looking at nut crops."

Growing global demand for almonds
Paul Thompson , the managing director of ASX-listed almond group Select Harvests , says investor interest in the sector is growing rapidly.
Two facts underscore the point. This year, 380 people came to Australia’s annual almond conference, up from around 120 two years ago. Two years ago, a bidder could have acquired Select Harvests for $60 million.
The group’s market value is now $450 million. In recent years, global demand for almonds has been growing at around 8 per cent and supply has been growing at closer to 4 per cent.

An intensifying drought in California, which produces 80 per cent of the world’s almonds, has bolstered prices.

Thompson says nuts are a real opportunity but there are challenges. “The short-term barrier is getting enough trees. Whatever nut it is, we need the nurseries to provide us with the trees. The second barrier is access to the right sort of capital. Then there’s people. You need the right people in rural areas. We need to invest in people to make a career of it.".
Sourcing long-term equity has been a perennial problem for agriculture. Thompson says the industry needs patient capital like that provided by infrastructure investors.

We have fantastic yield
“Sometimes you aren’t cash positive for five years and that’s not attractive for an equity market and the short-term nature of reporting in Australian funds management," he says.

Investment banker David Williams says there is an opportunity to consolidate orchards to gain scale benefits. “If you look at most food industries, dairy and grain, they’ve been aggregated, the one area that hasn’t been aggregated is horticulture and I put into that nuts and fruit and vegetables," he says,

“For me, that is where the money is going to be made in the next 12 months."

Williams says that Australia’s ­success in almonds proves the country can succeed in horticulture.

“We are counter-cyclical with the US, the growing here is more efficient, we have damn good product and ­fantastic yield." .

According to the Almond Board of Australia, almonds are Australia’s most valuable horticultural industry. In the past decade, annual almond export sales have soared from $82 million to $309 million.

“Demand is outstripping supply and it looks like that’s going to hold. All the doctors are recommending them as a great health push," Dinicola says.

Ferrero’s farm is expected to produce 5000 tonnes of hazelnuts a year once its fully established. Narrandera local David Farley, a former chief ­executive of listed beef producer ­Australian Agricultural Company, says the whole Riverina is going through massive change for the better.

“It was established to irrigate broad acre crops particularly rice and now we are seeing a big swing to higher value crops like almonds and walnuts and lots of hazelnuts going in with Ferrero."




Ferrero Australia has been recognised for its sustainability practices at Sustainability Advantage NSW’s recognition

read more


Ferrero’s sixth palm oil progress report

Ferrero’s sixth palm oil progress report

In 2016 Ferrero chose to modify its palm oil supply base

read more


Ferrero’s palm oil: health and safety is the first priority

Ferrero’s palm oil: health and safety is the first priority

The health and safety of consumers is an absolute priority for Ferrero and we confirm that Ferrero products are safe.

read more


Ferrero leads the 2016 WWF Palm Oil Scorecard

Ferrero leads the 2016 WWF Palm Oil Scorecard

The WWF International Palm Oil Scorecard 2016 has placed the Ferrero Group as a top scorer among 137 global companies

read more




Ferrero has always given the utmost importance to offering consumers products of the highest quality and food safety.

read more

news archive