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Looking to crack a big new market

September 22, 2008

With the trend toward "buying local" growing fast, there is a group of farmers hoping consumers go nuts — Ontario nuts, that is.

Hazelnuts, chestnuts and walnuts aren't normally associated with Ontario's food basket, but as least 300 farmers across the province, mostly scattered along the north shore of Lake Erie, have nut tree orchards.

They are people like David and Linda Powell from the Kerwood area in Middlesex County.

Starting around Thanksgiving, they will be selling chestnuts, English walnuts and hazelnuts at Covent Garden outdoor farmers market.

"We do very well. We usually sell out," said Linda Powell.

The Powells produce corn, wheat and soybeans on their farm, but in 1992 they decided to plant a 5.7-hectare nut orchard with about 900 trees to give them a retirement hobby.

Nut orchards tend to be a sideline for most farmers, but for some growers it can be a significant part of their income

Linda Powell said Southern Ontario's Carolinian climate is suitable for a number of nut varieties. Even pecans and almonds, nuts associated with much warmer climates, can be grown in Ontario.

But Powell said the climate can be tricky. This year, blooms on their walnut and heartnut trees were hit with a frost in May.

"On Mother's Day weekend, there were three nights of heavy frost. But this is the first year since 1992 that we have had this problem."

Heartnuts are a form of Japanese walnut, with a characteristic heart shape and delicious flavour. The Powells sell some of their heartnuts to Soma Chocolate in Toronto's distillery district.

But Ontario producers are eyeing a much bigger market for hazelnuts that could put the industry on a whole new footing.

Officials from the big Ferrero Canada plant near Brantford have indicated interest in buying Ontario hazelnuts for their popular Rocher chocolates.

The Italian-based confectioner now imports about 6000 tonnes of hazelnuts a year, mainly from Turkey, the world's leading producer.

The Society of Ontario Nut Growers (SONG) has been meeting with Ferrero officials for more than a year.

"There is interest there. If we can come up with the right product for them, they would be happy to take them,' said SONG president Bruce Thurston.

But Ontario growers will have to meet Ferrero's standards for hazelnut flavour, shape and volume.

Thurston said Ferrero seemed pleased with the taste of Ontario hazelnuts, but their shape and size was not ideal.

Ferrero uses a small, round hazelnut in the centre of their Rocher chocolates. Ontario hazelnuts tend to be larger and oval in shape and less suitable.

But Thurston said most hazelnuts used in the plant are crushed to mix in the chocolate shell, so shape isn't crucial.

Getting enough volume for Ferrero will be the biggest challenge. Hazelnut trees in Ontario have been almost wiped out by a disease called Eastern Filbert Blight.

Martin Hodgson, a grower from the Courtland area, is in the forefront of developing a hazelnut variety immune to the blight.

In 1994, Hodgson planted 5,000 hazelnut trees on his 40-hectare former tobacco farm. Then in 2001, blight wiped out all but about 200 trees.

Hodgson is confident those survivors are immune to the blight. This spring, he transplanted some of the best surviving trees into one area so they would be easier to harvest and manage.

Hodgson said the surviving trees have proved their hardiness on his farm.

"These are some of the toughest growing conditions in the region — colder winters, earlier frosts, dry sandy soils with minimal organic matter and no irrigation," he said.

Hodgson sees the potential for a $30-million hazelnut industry in Ontario, with more than 6000 hectares planted across the province just to supply the Ferrero plant.

He said hazelnuts could fill the void left by the decline of the tobacco industry, since the trees grow well in the Norfolk Sand Plain, the traditional heart of tobacco country.

Hodgson said hazelnuts have other advantages. Since they fall off the trees and can swept up at harvest time, they require little on-farm labour. The trees also tend to stabilize the sandy soil and prevent erosion.

Another possible byproduct from the hazelnut trees is taxol, used by pharmaceutical companies in breast-cancer drugs.

Adam Dale of the University of Guelph's Simcoe Research Centre has been experimenting with a number of hazelnut trees suited to Ontario growing conditions.

He said it would take more than 4850 hectares of hazelnut orchards just to supply the Ferrero Canada plant.

"Here's a great big buyer with no growers," said Dale. "If it works, it could be a huge boost to agriculture."

Ferrero has a number of confectionery plants worldwide and buys more than half of the world's hazelnut production, he said.

But he cautioned that finding the right varieties and distributing them across the province will be a long-term project. "It will take at least 10 years before we have any reasonable acreage. It's cert-ainly not an instant fix," he said.

Dale said climate is a major challenge for hazelnut orchards in Ontario, which are vulnerable to early frost or harsh winters. But he said traditional apple-growing areas could also support hazelnuts.

Hodgson said hazelnuts could reach their potential with some government assistance. He says it takes about $7500 a hectare to plant hazelnuts and many growers can't afford to wait 10 years to reach full production.

Hodgson said the province could provide loans to growers until their orchards reach full production.

A delegation of agriculture officials, local politicians and researchers toured Hodgson's farm this month.

"They had an interesting tour and they see the potential," said Hodgson.

But he said it could take several years of research just to develop new varieties that can be distributed across the province

Hodgson said while growers gear up to meet the demand of the Ferrero Canada plant, they have opportunities to expand their share of the retail market, displacing foreign imports.

Ontario imports more than $5 million worth of hazelnuts each year, including 454 tonnes of unshelled and 901 tonnes of shelled nuts.