To source hazelnut — a key ingredient in its chocolates and Nutella spread — domestically, world’s third largest chocolate-maker Ferrero plans to soon launch a demo plantation drive in Himachal Pradesh.
As of now, hazelnut is not produced in India and the company is dependent on imports to meet its demand.
Domestically sourced hazelnuts will not only cut down on its import cost but also give farmers an exposure to a new commercially viable product.
Laying down the details, Ferrero India Private Limited secretary general Inder Chopra said the company will provide saplings, know-how, technical support and offer a buyback programme, so that the whole package is be available to the farmers.
Even though hazelnut is not produced in India, a wild variant is found in Jammu and Kashmir, primarily used as cattlefeed on account of its poor quality.
The company plans to graft J&K variant with its plants, and develop a robust variety of hazelnuts. “We have urged the Himachal government to set up a demo plantation and let farmers see it for themselves,” said Chopra.
Initially, the company would provide 500 saplings for its first commercial cultivation demonstration.
It is the second most expensive nut and needs cold and hilly terrain with a few days of sub-zero temperature. Therefore, Himachal Pradesh and Jammu and Kashmir make the best choice in India. It takes three to five years for hazelnut plants to grow and yield fruit.
The company will also participate in a national consultative meeting on hazelnuts to be held at the Horticulture University in Solan, Himachal Pradesh, on December 9.
On other hand, even the state government is keen on diversifying its portfolio from being solely dependent on apple production. Last year, Ferrero had purchased 85,000 metric tonne of hazelnuts for use in Ferrero Rocher chocolates and Nutella spread.
Once the company starts Nutella production in India, it will have to import more hazelnuts, said Chopra. Import is, however, not a cheaper option as duty on hazelnut is 30%. Chopra says, the import duty needs to be lowered to 10% as the volume of hazelnut imports is insignificant.
Ferrero sources hazelnut from Turkey, world’s largest producer of hazelnut with a 70% market share. Italy has a 12% share while 6% share is with the US. Azerbaijan, China, Iran and Spain also grow hazelnuts. Ferrero bought a procuring and processing unit in Turkey eight months ago. It also has its own plantations in Chile across 3,000 hectares. There has been a hazelnut crop failure in Turkey which has taken the global hazelnut prices to around US $ 8 from around US $ 5.
