Maine Biz: Flavored Nut Sellers Crack Maine’s Gourmet Food Market

by Lori Valigra, Maine Biz

 

Pity the lowly Beer Nuts, once the darlings of Super Bowl parties. Pistachios boldly shelled the football classic this year in an ad featuring South Korean rapper PSY singing “Crackin’ Gangnam Style” and stomping amid a group of dancing green nuts.

With Maine’s penchant for originality, several local nut companies have sprouted up, concocting unique toppings like Habanero Heat pistachios, Bodacious Banana Bread walnuts and Chambord n Cocoa macadamias. That emerging boutique nut market isn’t just for gourmands chasing new tastes; the nut sellers tout their snacks’ health benefits, such as being a source of protein and antioxidants.

“People are looking for a healthy snack without sacrificing flavor,” says John Powers, founder of The Gilded Nut Snack Co., who uses the title “head nut.” He says nuts contain fiber, protein, potassium and antioxidants. The new Portland-based company, incorporated in Maine in 2013 but started in California in 2012, distributes pistachios it buys and flavor-coats in California.

Davy Pruzansky, owner of Living Nutz in Bowdoinham, takes it a level further by offering raw coated nuts certified as organic by the Maine Organic Farmers and Gardeners Association and the U.S. Department of Agriculture.

“People are gravitating toward organic in general,” he says. That means there are no pesticides, herbicides, fungicides, artificial chemicals or sprays used on the nuts. Living Nutz’ flavors include I Love Vegan Cheezy almonds, made using pumpkin seeds, and Passionate Pesto Walnutz. The nuts are sprouted using water and dehydrated rather than roasted, which he says saves the taste and makes them easier to digest.

Still in its infancy, Maine’s nut business nonetheless holds promise for strong growth based on those trends for healthy, unique snacks. A 2010 Maine International Trade Center study looking at export opportunities noted that French consumers are increasingly interested in healthy and natural foods like nuts, with exotic flavors in high demand. The United States as a whole accounted for about one-third of France’s tree nut market of $428 million in 2007, according to U.S. Department of Agriculture figures quoted in the study. MITC President Janine Bisaillon-Cary says Maine currently isn’t tracking the volume of nuts being exported, as Maine isn’t a huge nut-producing state.

Other Maine companies are players as well. Jim Morande, owner of Maine Buck Nuts, makes frosted gourmet nuts that he sells to wholesalers on the Web and through his shop, The Olde Towne & Country Store, in Old Orchard Beach.

And even DennyMike’s, the Westbrook sauce maker that recently set up a nut-free processing line, is experimenting with a line of seasoned whole nuts that it plans to make out of state, according to owner Dennis Michael Sherman.

Local resellers have latched onto the trend, too. The Gilded Nut has about 80 accounts now, Powers says, primarily in the San Francisco area and the Northeast. Local accounts include LeRoux Kitchen and the Black Tie Market & Bistro in Portland and The Cheese Iron and Lois’ Natural Marketplace in Scarborough.

“We sell a lot more of the flavored nuts during football season,” says Vince Maniaci, co-owner of The Cheese Iron, a cheese, wine and specialty food shop. Maniaci sells The Gilded Nut’s coated pistachios.

“More people are snacking on nuts for both flavor and health,” he says, adding that he chose pistachios because there are a lot of almonds and walnuts already on the market. Some 3% to 5% of The Cheese Iron’s sales now are from fruits and nuts, and he expects that to rise to 5% to 7% next year as demand for the nuts grows. He also sells the nuts, which come in 2.25-ounce packages, as part of his meat and cheese party platters. Each package separately sells for $3.49.

Luxury hotels and resorts also jumped into the mix using nuts to complement cheese boards, wine and olive trays, Powers says. Each pistachio box contains suggested wine pairings.

“We give the nuts out as a gift, an amenity upon departure,” says Holly Paradis, general manager of The Boathouse Waterfront Hotel in Kennebunkport. “It’s a Maine company and we wanted Maine-made. It’s a healthful snack and our guests are health conscious.”

Powers says he’s appealing to the 25- to 55-year-old crowd of health conscious, gourmet-seeking consumers who are more concerned about quality than quantity.

“Price isn’t as much of an issue. They’re looking at ingredients and uniqueness of product,” he says. The nuts also fit in as a companion to wine, whose consumption is on the rise, especially red wine for its reported health benefits.

And while some health-conscious Americans have shied away from fat-laden nuts, several medical studies support their benefits. An April 2013 article in The American Journal of Clinical Nutrition that examined the results from 33 clinical studies found diets enriched with nuts did not increase body weight, body mass index or waist circumference. And a November 2002 study in the Journal of the American Medical Association concluded that higher consumption of nuts and peanut butter translated into a lower risk of type 2 diabetes in women. Both findings appear to support some of the health claims of the nut sellers.

Powers, working with his life partner, Catherine York, and a network of distributors and brokers, hopes to grow current revenue of $100,000 to between $850,000 and $1 million by the end of 2014. He also expects to turn a profit by the first quarter of next year, and to hire one or two people around that time.

He says pistachios’ popularity is growing, with about $1 billion in annual retail sales in the United States alone, with a kick from this year’s Super Bowl as well. The United States last year surpassed Iran as the world’s biggest pistachio producer, and most of those nuts come from California.

Powers and York, along with a recent unnamed equity investor from the Virgin Islands, have put more than $100,000 into the company, most of which is being used for production. Pistachios are expensive, as are the natural ingredients such as the herbs and spices and extra virgin olive oil, Powers explains.

One of the company’s biggest expenses is mailing out samples. Each sample contains a 2.25-ounce box of each of the four flavors and is sent to specialty food shops, luxury hotels and resorts.

“It’s a big cost to ship,” Powers says. A 2.25-ounce box of flavored pistachios retails for $3.99-$4.99, which he says makes it a luxury product. He hopes to make it a national brand.

While Powers would like to ship the California-sourced pistachios to Maine and coat them here, currently his volumes are too low to make that financially feasible. The company buys roasted pistachios in California and has them tumble-coated in a plant nearby.

“We plan to bring production to Maine, but we need to grow and get bigger and order enough quantity so shipping isn’t a hindrance,” he says. “We could save several dollars per pound.”

Powers says his product distinguishes itself because it uses natural ingredients, and a lot of the seasoned nuts now on the market have a sugar base. He recommends eating The Gilded Nuts pistachios by first sucking the flavor out of the shell, and then eating the kernel. That also benefits hotels and others buying nuts as premium snacks for patrons, as it slows down the eating compared to shelled nuts, which cuts down on consumption and thus costs, he says.

There are some competitors, such as Paramount Farms, which sells flavored nuts through larger stores such as Costco and Safeway. Powers is talking with Whole Foods and has completed its audit process. He’s now waiting for that health-foods chain to place an order.

Another competitor is Living Nutz, which sells organic, flavor-coated almonds, pistachios, walnuts, pecans and Brazil nuts. The company currently works out of a 2,000-square-foot house in Bowdoinham, but is talking to the Midcoast Regional Redevelopment Authority to lease 4,200 square feet in Building 51 at Brunswick Landing.

Living Nutz takes a different approach than The Gilded Nut. Instead of roasting the nuts, it soaks them for up to 12 hours, then dries them briefly before adding the toppings and dehydrating them. Owner Pruzansky says nuts and seeds contain enzyme inhibitors that protect them as they grow. But he says releasing the enzyme inhibitors through soaking increases the nuts’ flavor and vitality and makes them easier to digest.

Living Nutz aims to keep its products raw, and thus eschews California almonds, which are plentiful but which must be pasteurized under state law, and instead buys raw almonds from Spain and Italy.

The company sells to Royal River Natural Foods in Freeport, about 30 Whole Foods stores throughout the country, Mister Bagel in Brunswick and elsewhere. Each 3-ounce bag of nuts sells for $7.49 at Whole Foods, but for $5.99-$6.49 on the company’s website. The company also has a growing nut distribution business to restaurants, which currently contributes half of its revenue.

“We want to increase production,” says Pruzansky, who adds that he’s “waiting for issues to line up to make it [the move to Brunswick] happen.”