California Walnut News - Special Newsletter April 2020

SPECIAL NEWSLETTER MESSAGE FROM THE EXECUTIVE DIRECTOR & CEO Dear Industry Members,

These are unprecedented times - the recent evolution of the Coronavirus (COVID-19) has brought rapid change to our worlds. We hope that you and yours are healthy and stay well.

Given that the agricultural sector is essential, the work of the CWB/CWC continues, albeit with some modification.

For the health and well-being of our staff, most are working remotely, with limited staff in the office ensuring that critical operational functions are maintained.

We continue to monitor Federal, State, County and Local guidance regarding the multitude of various recommendations, mandates and rapidly evolving legislation that impacts us all, while providing routine updates to Board Members & Alternates, Growers and Handlers. Given the swift pace of these changes we have established a webpage for easy reference https://walnuts.org/walnut-industry/covid19-resources/

New Legislation – What it means for Industry:

Congress has passed a series of bills to combat the business and personal impacts of COVID-19. The most recent is the CARES ACT. The $2T in funding provides for a multitude of programs but there are a few to make you aware of:

Small Business Assistance

• Paycheck Protection Program (PPP) - The PPP is a brandnew program that can provide a loan equal to 8 weeks of prior average payroll plus an additional 25%, of up to a maximum of $10 million, for payroll and other business operating expenses. It includes a provision for debt forgiveness if the loan is used for payroll to maintain your workforce. Complete details are provided on the Small Business Administration website.

• Economic Injury Disaster Loan (EIDL) Program - This is the SBA’s existing disaster loan program, and it continues to be

APRIL 2020

IN THIS ISSUE Research Projects

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Export Marketing

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available to provide a Domestic Marketing 4 low-interest, long-term Helpful Resources 5 working capital loan Upcoming Events 6 to businesses and nonprofits whose cash flow has been disrupted by the coronavirus pandemic.

USDA Assistance:

Under the CARES Act, funding has been provided to USDA for a series of programs, the details of which are forthcoming. USDA has received $9.5BN in funding for relief to America’s growers and $850MM in increased funds for feeding programs, as well as WIC, SNAP and other programs that provide food benefits. The CWC has been in constant contact with USDA as the program’s details are being developed, and have joined forces with fellow California producers/Associations (i.e.

CA Farm Bureau) to advocate for specialty crops with Congressional Leadership.

Industry Impacts

The pandemic has impacted our business globally, as retailers move to quickly adapt to changing retail environments, manufacturers scale-up to produce more and food service operators lean heavily into drivethru and take-out models. In response to this changing environment, our marketing programs have also adapted.

While we are marketing at a time of uncertainty, food remains the cornerstone of the “new normal”. Home baking is seeing a resurgence and home-made meals/ snacks are essential to our new lifestyles. More details on how our activities are reaching our consumers and customers in this challenging time are enclosed.

We will continue to communicate with you as details of the aforementioned programs become available. Thank you for the sacrifices you are making as essential operations, we are all in this together. Wishing you good health.

Sincerely, Michelle Connelly

CWC Supported Health Research Projects and Scientific/Professional Events

University sites around the world have been shut down due to the pandemic. CWC is currently supporting 11 human clinical trials. Of these 11 trials, two have not yet started, so these timelines will be pushed out to later this year. The other studies are in holding patterns and we are in constant contact with all primary investigators and their clinical coordinators to monitor next steps. Also, many scientific and professional meetings where CWC would have had a presence have been cancelled or postponed including Experimental Biology, American Society of Nutrition, 38th International Symposium on Diabetes and Nutrition and Nuts2020. We are in contact with these organizations as they prepare either virtual meetings or are working to set up new dates later this year or in 2021.

CWB Production Research Projects

Under the current mitigation measures, most of the research work being conducted by our partnering institutions (UC, USDA-ARS, CSU system) is moving forward, though at a slower than normal pace. Work being done in laboratory and greenhouse settings has been more impacted than field work because social distancing is harder to achieve in indoor settings. Contracting and other project administrative functions at these research institutions have transitioned on-line with staff working from home.

This takes longer but is working well. We anticipate that newly funded projects will likely take longer to ramp up and that some season-sensitive tasks may need to be postponed to next year, but these cases are the exception rather than the rule.

CWB Grades & Standards/Post-Harvest Research Projects

Some of the research projects at university level (UC Davis/Oregon State) have been impacted with the current stay at home mandates and social distancing norms. Ongoing work on edible coating for walnuts and early rancidity detection have been impacted.

Some of the conferences scheduled in April and May have been postponed (Safe Food Alliance Annual Conference, MRL Conference). Despite this, we expect most of projects will be completed with minimal delay.

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During this unprecedented time, the coronavirus crisis has led to changes in consumer habits and behaviors crossing all generations and continents.

Most notably is the rapid change as to how they are consuming information and communicating with friends, family and co-workers. With the coronavirus, consumers are concerned for their own health as well as that of their families and friends. Now, more than ever, we have focused our messaging on the health benefits of walnuts and the impact they can have to overall health and wellness when added to the daily diet. To communicate these messages, and keep California walnuts top of mind as a healthy snacking and ingredient option, our marketing activities have shifted to better reach consumers and trade where they are spending most of their time. These shifts vary by country as stay-at-home restrictions differ and the CWC continues to monitor changes daily in order to adapt messaging as well as communications channels to a rapidly changing environment.

EXPORT MARKETING

RESEARCH PROJECTS: COVID-19 UPDATE

During the past few weeks, media is quickly shifting globally offering more content online and through broadcast sources. In the US, many of our media partners for our national advertising campaign, are experiencing an increase in audience viewing and engagement. Additionally, lifestyle programming is on the rise as well as people seek to escape from the current situation while they are at home.

This is a positive for California walnuts as more people will see our ads more times. In our overseas markets, this also holds true and our advertising has shifted with more being done online – where consumers currently are looking.

Retail promotions are a critical component of our program in many markets and while we have found it necessary to postpone some until the new crop season, others are being able to be shifted to just before summer. In Korea, where California walnuts holds a 90+% market share of all walnuts being sold in the country, we are moving forward with our “Sales King� activity in May (originally scheduled to begin in March) as retail partners felt confident this would be appropriate given the state of their nation. Our annual spring advertising program in Spain, one of the hardest hit countries in Europe, has been pushed back to May with a mixture of in-store and online ads reminding consumers to eat a handful of walnuts daily for overall health and wellness.

As Ramadan quickly approaches, the prime buying season for walnuts in countries such as Turkey, we have moved our in-store activities to online ads with the major online grocery sellers so that California walnuts can remain top of mind and continue to garner sales during this critical holiday selling season. We have also shifted some of our activities to online in the UK and Germany as consumers have shifted their buying habits rapidly to these platforms in order to shelter-

health benefits of walnuts including their antioxidant qualities. This has been very well received and, in many markets, editors have asked us to continue providing additional information for their long-lead publications.

in-place. We are monitoring other countries to evaluate if this is possible.

Internet usage is up 50% in some parts of the world as more aspects of our daily lives have moved online. This includes time spent online looking for recipes, ideas and entertainment along with the use of social media and other digital communications platforms as home confinement has led to an increase in free time and the need to stay connected with family and friends, as well as the world beyond their homes. Online searches are up on computers and tablets as well as smart phones across all of our international markets looking for healthy, comfort food, and quick to fix recipe ideas. Our website content has been packaged to deliver recipes and tips that meet these needs. The CWC's postings on Facebook, Instagram, Twitter, and all other country-specific platforms is continuing. Current messaging emphasizes stay at home recipes, online cooking classes, how to make the most of what’s in your pantry/fridge with California walnuts, as well as health information about walnuts unique amount of Omega-3 among tree nuts. We have created quick followalong videos, utilized influencers and leading chefs to demonstrate how they use walnuts to enhance their meals, as well as hosting “what did you make with walnuts� video chat get-togethers.

We also have a robust public relations program working with editors of various consumer and trade publications and online channels. Our ongoing public relations efforts have also shifted to meet the current needs of each market by providing quick and easy recipes, cooking tips and projects with children at home, as well as information on the

Another critical focus is our outreach to various levels of the trade including importers, retailers, food and beverage manufacturers and foodservice professionals. We have continued sending our e-newsletters and one-to-one phone/video meetings keeping them apprised on how our industry is still providing nutritious, delicious California walnuts to the global market and filling orders.

Our outreach to healthcare professionals has been modified to be relevant to the current environment and sensitive to their needs. This way we can continue to keep California walnuts top of mind in the absence of tradeshows and events that have either been moved to later this year or cancelled for 2020.

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DOMESTIC MARKETING

As you are all aware, consumer habits have shifted tremendously in light of COVID-19. Staying at home has led consumers to lean into foods that are traditional and comforting, an opportune time for California walnuts. For example, Google searches for banana bread hit an all-time high.

Not only are walnuts a wonderful kitchen staple for consumers to have on hand, but they supply a wealth of nutritional benefits that help consumers maintain overall wellness. California walnuts have recently been featured in video segments with Registered Dietitian Wendy Bazilian on Live with Kelly & Ryan as well as with Iron Chef Cat Cora on People.com showing audiences simple ways to use and store them.

Retail sales saw a strong bump in March with volume sales at grocery rising more than 28% year-over-year (for the four weeks ending March 22). In light of the current environment, we are adjusting many of our activities to make sure California walnuts continue to be top of mind with consumers and will continue to adapt as needed.

The foodservice industry is one of the hardest hit industries by this pandemic. Knowing that many operators are struggling, some even wondering if they will be able to keep the doors open, we have halted communication with this group. Additionally, developing new products is not one of the highest priorities for many Consumer Packaged Goods (CPG) companies right now as some struggle to keep up with demand. We continue reaching out to some of our close contacts to express our concern for their wellbeing, as well as media partners to plan for fall and winter. We are using this time to create valuable content for this audience to engage with online.

With retailers simply focused on keeping shelves stocked, our instore retail promotions originally scheduled for May

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have been postponed until summer. While we hope those will ultimately come to fruition, we are also exploring ecommerce partnerships as we know that segment of grocery retail has grown tremendously during this time.

Public relations efforts are being adjusted in light of media sensitivity to brand promotions. We are shifting resources to more paid integrations in order to ensure our message continues to get heard. As consumers spend even more time on social media, we are increasing influencer partnerships to give consumers simple ideas on how to use walnuts with ingredients they have at home. We are increasing our efforts with health professional influencers who are still being called on for interviews with the media and serving as resources on eating for maximum wellness.

Many of our media partners are experiencing an increase in audience viewing and engagement. Additionally, lifestyle programming is on the rise as well as people seek to escape from the current situation while they are at home. With this in mind, we are keeping the course with our media buy.

As consumers are staying home and sheltering in place, many have turned to social media to connect with friends and family or to just pass the time. We will continue posting on Facebook, Instagram, Twitter, and LinkedIn, maintaining sensitivity to our audience’s situation. With more people online now, we have seen an uptick in website traffic and will continue our presence through all our digital media, both paid and owned, offering content that is appropriate for our audience.

While a few of our programs have been cut back or reimagined, all of our awareness building and engagement driving programs, such as social media and advertising are out performing previous levels. Research has shown that brands who continue strong marketing efforts during a crisis or economic downturn come out stronger on the other side.

We look forward to seeing you when we get through this.

HELPFUL RESOURCES FOR THE WALNUT INDUSTRY DURING THE CORONA VIRUS CRISIS In the rapidly-changing Coronavirus (COVID-19) landscape, the California Walnut Board and Commission is supporting growers and other industry members by sharing the latest news and resources specific to the walnut industry.

The following links are some of the many we have compiled for industry reference and are available at: https://walnuts.org/walnut-industry/covid-19

CDC

For a general overview and precautions during this situation, the Center for Disease Control (CDC) is the best resource. https://www.cdc.gov/coronavirus/2019-ncov/index.html

DHS

The Department of Homeland security (DHS) has identified 16 critical industries that are exempt from the current shelter in place mandates. Food and Agriculture is one of them. https://covid19.ca.gov/img/EssentialCriticalInfrastructureWorkers.pdf

FDA

Food & Drug Administration’s Comprehensive Corona Virus Information Page. https://www.fda.gov/food/food-safety-during-emergencies/food-safety-and-coronavirus-disease-2019-covid-19 It is worth emphasizing that this virus does not spread through foodborne transmission.

USDA

USDA’s Farm Service Agency (FSA) will continue offering and processing farm loans during this period.

Details can be found here: https://www.farmers.gov/coronavirus The Small Business Administration (SBA) will be doing the same for small to midsize businesses. https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources We will be updating this information frequently as more information becomes available to keep the industry abreast of the latest developments.

WIN A GIFT CARD!

GIFT CARD

TAKE THE GROWER SUSTAINABILITY SURVEY

GIFT CARD

Sustainability is increasingly becoming important to retailers and consumers alike. We believe California Walnuts have a great sustainability story to tell. But some information gaps still remain. We would greatly appreciate if growers could take this 10-15 min online survey, which would help us fill some of these information gaps as we tell the sustainability story of California Walnuts.

10 randomly selected participants will receive Visa gift cards, ranging from $50 to $500!

https://walnuts.org/sust-survey

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CALIFORNIA WALNUT COMMISSION 101 Parkshore Drive, Suite 250 Folsom, CA 95630 Phone 916.932.7070 Email info@walnuts.org Fax 916.932.7071 walnuts.org

UPCOMING EVENTS MEETINGS

CALIFORNIA WALNUT BOARD & CALIFORNIA WALNUT COMMISSION

⊲ California Walnut Board & Commission Annual Spring Meeting Date: May 7th at 9:00am

NOTE: This will be a limited agenda teleconference meeting.

Please visit our website at www.walnuts.org/events for a detailed agenda.

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