Transcript: Chia Seeds & Plant-Based Protein Powders Trends with Tom Merrow from Onset Worldwide

Nick Erker: Hey, there. Welcome to Get the Scoop with Smirks Podcast, where bulk ingredient conversation happens. We’re sharing our knowledge and expertise as bulk ingredient importers, tapping into the latest trends we are seeing and commenting on what that means for natural food businesses as they approach ingredient purchasing, product development, and marketing. You’ll hear the latest market reports, ingredient specifications, and product applications from Smirk’s in-house experts, as well as origin stories from our growers and processors around the world. Listen in for the scoop on what’s happening with bulk ingredients.

Elisa Louis: Hello and welcome back to another exciting episode of Get the Scoop with Smirks. I’m Elisa Louis, and my co-host is Donny Edson. Today we’re thrilled to be joined by a special guest, Tom Merrow from Onset Worldwide, an importer and processor of a range of seeds and ingredients located in New Jersey. In this episode, we’re diving into our incredible journey from a chance meeting to a strong collaboration with Tom and his team. We’re eager to highlight Onset Worldwide’s business and capabilities, as well as our relationship with Onset and the value-added products Onset has provided to Smirk’s over the years.

Donny Edson: As the new chia crop is beginning to arrive, we thought it would be timely to discuss our experiences with chia and the trends we are seeing. So, let’s kick things off. Tom, how’s it going?

Tom Merrow: It’s going amazing, guys. Grateful to be here and grateful to be in a growing industry with a lot of friends we get to see on a daily basis.

Elisa Louis: Very awesome. Well, why don’t we just start off with hearing your story? I mean, Tom, could you tell us a little bit about Onset Worldwide and how you got started in the business?

Tom Merrow: Yeah, absolutely. Well, prior to starting Onset Worldwide, I was working as a freight forwarder in Boston. I was helping importers and exporters secure containers, clear customs, deliver their products. I was really fascinated by the entire import export industry. While I was doing that, I saw the opportunity to help companies source product in other countries and then also domestic manufacturers to help them export outside the US. So I started Onset Worldwide as a global sourcing company in 2010. Onset means a new beginning, which was pretty fitting for the new venture. We weren’t exactly sure what products we were going to sell. We just knew we were going to help people find products or export products from the US. We worked from everything from fabrics to food ingredients. A year into the business, I met my future wife, Sarah. She was working in New Jersey at the time, and I offered her to come join Onset. In exchange for a salary, she could own a percentage of the company, and in that time, the company wasn’t worth anything. So I guess she did like me and she saw the potential kind of take the risk. She moved up to Boston and off we went. There’s pretty much, we were two kids in an apartment shipping product around the world. Yes, Sarah is amazing. She’s organized, she’s helped develop our entire back end of our business, from finances to quality control, which she still heads up now, 13 years later.

The two of us ran the business for about six years. While living off of pasta and water, we dabbled in retail. We had a shoe concept that we developed in Asia and brought over. Til one day, one of our suppliers, one of my friends said, hey, I got six pallets of chia seeds in my warehouse. Can you help me sell it? So, I quickly Googled what a chia seed was. I learned the market, and we kind of never looked back from there. In 2016, we moved from Boston down to Frenchtown, New Jersey. That’s about as close as we could get to the Port of New York because the pricing of real estate was so high. Shortly after moving from Boston to New Jersey, we found out Sarah was pregnant with our first daughter, Molly, and soon to be our second daughter, Lila, shortly after. That kind of put the pressure on, really kicked us into high gear. We started buying machinery, adding values to the seeds that we would import, and develop some technology to cold mill oil seeds. We kind of never looked back from there. And now we have four production lines, and we’re working on building a new facility here in New Jersey to increase capacity and service this growing market.

Donny Edson: Tom, I think some of the things I’ve enjoyed over the years and working with you is, as you kind of mentioned, the innovation, doing more value-added products and services to kind of stay ahead of trends or help even develop trends. I really think you’re always a year or two ahead of where things are, and you’re always planned for when something happens. So, can you tell us a little bit some of these that you do inside the factory now?

Tom Merrow: Yeah, definitely. It does seem like that’s a good point, Donny, where you kind of got to be ahead of the curve. Seems like chia seeds, they were hot for, and they still are hot, but they were a trend for a few years, and you got to be ready to find that next ingredient that you’re going to import or you’re going to manufacture. So, I would say what makes Onset unique is we really narrowed our focus. So we used to have over 100 different SKUs. We’ve narrowed a lot of that down to focus on products that fall in our categories as allergen free seeds, grains, and flowers. So, we have four production lines. We have a production line to cold mill, oil seeds, so we use our nitro mill technology to mill sunflower, pumpkin, watermelon, and chia seeds. So, we’ll make a nice full fat flower, a bit coarse, but has all those omega values inside. Or we have a cold press line where we’ll make plant-based proteins out of those same seeds. Sunflower protein, watermelon protein, pumpkin protein. Or we just increase the purity of our seeds. So, we have a cleaning line where we’ll take chia seeds that are maybe 99.9% purity, increase that to 99.99% purity. We do that not only for our own products, but for our fellow importers that may not have a facility on the east coast. So, say they import some chia seeds and there’s maybe some stick stems or unwanted foreign material in there. They’ll send it to us, and we’ll process that, clean that, pack it into brand new totes or bags, private label and off it goes. We also have a repack line so we can change bag sizes from super sacks to 50 pound bags, which Donny and I have done a lot of projects on. Always want to give the customer what they want, so we’re here whenever he needs us.

Donny Edson: Yeah, it’s awesome, Tom, our relationship has really been going on for about ten years now. Back in the day, I think we were introduced by a mutual acquaintance, and we started to do some bulk ingredient trading. We were both very young new people in the industry at that time too, ten years ago. But I think some of the fun for me has been a playing golf at different trade shows which we still try to do, the Smirk’s golf tournament which we don’t get to do anymore because we’re not welcome back at the course. And of course, I think to watching each other become dads and start families while still working on our business together. So truly we do value the relationship between our companies, but also the friendship and memories you’ve had along the way. So, Tom, do you remember what it was like in the early days when we first met?

Tom Merrow: Oh, absolutely. I remember I was walking down a trade show, I saw your booth and I saw your smiling face. I was like, so this is Donny Edson. So, I remember I walked up and not only did we instantly connect business wise, but our personalities really matched up and it’s been really nice. It’s kind of like just talking to a friend and hey Donny, what do you see with the chia market these days? Or hey, we’re short on this product, we’re long on this, think we can move something together. So, I remember just meeting at that trade show and all the golf tournaments we’ve played in. Yeah, it’s been amazing.

Donny Edson: Yeah, and it’s grown a lot, as you mentioned, since our first trade show. They’re doing a lot of mutual business together. But from Smirk’s standpoint is being a customer for Onset. I think some of the things that have been invaluable for us is helping us to overcome challenges. Obviously when you import something, you don’t ever want there to be a problem. The processor doesn’t want there to be a problem. But when you’re handling food ingredients and especially organic food ingredients inevitable that there might be a problem sometimes whether something starts to move inside the container along the way or you find a foreign material, or you want to get your product value added in another way. So, whenever Smirk’s is needed, products such as chia to be reclaimed to a certain specification, you’ve always helped us out.

We’ve called on Onset for sunflower seeds to be milled as well. I think that, again, was one of the cool, innovative products you really got ahead of, was doing the milled sunflower seed. And I think anybody in the industry is probably seeing more sunflower seed flour out in the industry now, being used in baking applications and different applications. But also, I think that the sunflower protein that you’re working on is also one that’s getting ready to take off, just starting to see a little bit more at some of the trade shows. So, I think that’s really cool. Some other projects we’ve done in the past is we’ve shipped in our chia and our flax. You’ve milled it for us. You’ve blended it for customers that wanted a retail package of a product that was a milled, flax and chia together. So really, I think the beauty lies in our ability to complement each other’s strengths. Tom, what would you say about the partnership between Smirk’s and Onset?

Tom Merrow: Yeah, the industry is really small when you start to get to know all the players. Not everybody can have everything in stock. When customers need know, demand’s fluctuating, increasing, decreasing. So that’s where Smirk’s and Onset have done really well together. Donny’s traveled to way more countries than I have. If we’re onboarding a new supplier at Origin, chances are Donny’s been there. We can bounce everything off to each other, from pricing to quality. So, I call him, hey, have you heard of this chia supplier? How about this sunflower supply chain? And we can say the pros and cons of each. If I’m running a large production run and we run out of product, give Donny a call. His warehouse is just down the street from us. So, it’s been a great relationship both ways. And, yeah, we’ve done so much business together. If he needs to get something in and we need to process it quickly, he’s always on the top of the list. So, it’s been a great partnership back and forth, and we can kind of be straightforward, get right down to business.

Elisa Louis: That’s fantastic, Tom. Hey, can we shift gears for just a moment? Sorry to kind of change things up, but we’re really curious about your insights on plant-based proteins, because this is a really interesting topic for us, and we’d like to dive into the various uses and the ways your customers are incorporating these items into their product lines. Could you share with us some of the emerging trends that you’ve seen as far as what you’ve noticed in the world of plant-based protein powders?

Tom Merrow: Yeah, I feel like I hear something new at every trade show. From the common items like an extruded snack, to protein drinks, from soft baked cookies to pharmaceutical applications, the common ones you hear every day. But the last trade show, a company requested a sample of watermelon protein as they start a new formula for a leather alternative belt. So, there’s always something new at every trade show. We can’t have the R and D team to support every single application. So, these companies that are innovative, they take the samples and they run with it. I think the possibilities really are endless awesome.

Elisa Louis: Awesome. So, since we promised we were going to really dive into chia today, with the new chia crops first product just arriving in the US this month in September, it’s really a great time to highlight our experience with chia. So first off, Donny, what do you remember about our early days of Smirk’s selling chia?

Donny Edson: It was a wild ride. I’ll talk a lot about it more as we get through the podcast, but really, it started back in 2010. We were selling small amounts of chia to the Mennonite communities. And in 2010, I was working a sunflower booth at the SIAL trade show in Paris when a guy walked up with a little bag of chia and he said, hey, you’re a trading company, trade this. And I looked down at the sample bag and I told him, this looks filthy, and he said, okay. And a year later, he came back to me at Anuga at the next trade show with a clean sample of chia. And we started buying chia from him from Argentina. So, it really seems like our chia business just kept steadily growing over the years, and now it’s one of our top selling items at Smirk’s. Smirk’s does import organic and conventional, both raw and sterilized black chia. We bring in some white chia as well. As mentioned, Onset helps us out when we need milled or blended product, too.

Elisa Louis: Tom, we’re really interested to hear how Onset got its starting chia. I mean, you touched on it a little bit, but anything else you want to share about chia and kind know how your chia business has evolved over time.

Tom Merrow: Yeah, I would say in the early days you tried to predict the market, you think this crop is going to be tight, so you start importing product early. I’ve come to know who I can trust in the industry and at origin and who I can’t. It used to be we could just pack raw chia seeds in a pouch, but now customers and suppliers, customers, retail brands are a lot more educated and retailers. So when we walk through a customer, what their end use is going to be, we have to determine if it’s going to be RTE or raw. So we have a number of validated killstep options we have at Origin and in the US. To meet all of those needs. A lot of our conversations start off with educating the customer about the differences. And if they’re going to be using a milled flour and the cookie or the product is not going to be baked, then you’re going to need an RTE flour. So that’s where educating of our salespeople and our QA staff, connecting with the customer is really important.

Donny Edson: Yeah. Thanks for bringing up RTE, Tom. I think it’s certainly an important topic these days, and it’s something that I think the industry is going to continue to talk more and more about, especially as the retailers are driving it. But it’s really critical for our customers to know that if they’re accepting a shipment of raw seeds, they need to understand the potential for food safety risks and ideally do their own processing, such as roasting or sterilization to reduce the pathogens. Or if that’s not an option, we can provide a solution product that has either got or gone a 5-log reduction of pathogens at origins or can be treated again here in the US. But I do think that’s an important thing to remember is that first and foremost is the food safety side of it. Nobody wants to get anybody sick and it’s either raw or it’s ready to eat. There’s not really any gray area. If it’s going to be cooked in a cookie, like you’re mentioning, then yes, it has the kill step going through it. But if it’s not going to be cooked in a cookie, or if you’re adding chia into a yogurt or something like that, then the chances are even higher for the pathogens to exist or develop there. So, I just think it’s really important that we continue to drive that message in the industry.

Elisa Louis: Really good stuff, guys. Thanks for reiterating about RTE versus raw. So, if you look at chia over the years, how it’s evolved and sales have grown, it’s kind of mind blowing. A report from Future Market Insights says that US Sales of chia reached 54.7 million in 2022. What trends are you both seeing in the industry? Tom, why don’t we start with you? I mean, we’ve talked a little bit, but any other insights? Any other little tidbits you might want to share about chia?

Tom Merrow: Yeah, well, since we’re a specialty oil seed mill, customers are coming to us with these unique applications. I want my cookie to be more moist. Okay, well, that can kind of start with the milling process. We offer several different types of milled flour, milled chia, we got cracked, which will give your cookie a little bit more moist taste. It won’t suck up as much water. Or we have regular standard mills, which you’ll probably see on stand-up pouches, and then we have fine milled. So, for a finer application or a liquid application, we can mill chia seeds in many different formats to meet the customer’s request. So, it’s really looking at five different types of SKUs of milled chia to see what works best in their application. So, it’s not just let’s import whole seeds, it’s what can we do with it once we get it here?

Donny Edson: Yeah. And I’d add that besides selling chia into a straight path, we’re working with customers to incorporate chia into granolas that’s really popular snack or energy bars, and add it into baby food that’s been packaged into pouches. And that’s where the milled stuff comes into play a lot. They’ll add the milled chia into a fruit puree and put it into a squeeze pouch for kids to eat. Over the years, we’ve seen a lot of things, and some of the things that are still around it’s still being used in beverages, in smoothies chips with fruit purees. And the way it’s used with fruit purees is you can add chia into a fruit puree. Chia will absorb somewhere around twelve times its weight in water, so it actually is a natural thickener. So if you just put chia seeds into a cup of water, it’ll turn it into a jelly. If you put it into a fruit puree, it’ll put it into a jelly. So it’s an easy way for people at home to make their own jellies without using gelatin. It also goes into breads and pudding mixes. In addition, you find chia is added to a lot of pet foods and pet treats now, so people care as much about their animals as they do about themselves, and they feed them in the same manner. So, we’ve seen chia being added into a lot of pet treats. And then also very popular with companies that make horse feeds. The health benefits make it great for horses, especially for high end racehorses or prize horses. People are feeding them a lot of chia seed, too.

Elisa Louis: We have been importing chia for gosh well over a decade, so it feels like Donny we must have witnessed pretty much any scenario you could imagine from the weather patterns, impacting crop conditions, and different market fluctuations. So, what are some of the key takeaways that inform your decision making each year when it comes to purchasing chia? And how do you go about making market report recommendations to our customers?

Donny Edson: Yeah, this is going to be a lengthy answer, Elisa. Chia has so many things that can influence the price. There’s been a lot of changes in where it is growing, who processes it, how it’s processed over the years. Back in 2012 to 2014 are the years that really stick in my mind. Tom might remember as well, too, because he was just getting into it, but chia was a complete roller coaster ride. It was a hot, trendy, new item. There was so much demand for it, and it was so new that prices were well above $6 a pound. The main processors in South America required prepayment for the goods before they’d even have it harvested. This alone led to a lot of issues as people had paid for the product. But then maybe it wasn’t harvested or it wasn’t ready to ship and then their money was just stuck in South America with a chia processor and they maybe didn’t get chia or maybe they didn’t get their money. So it was a really risky item in the beginning.

In the early years, a lot of chia was coming from all over South America and Mexico. And just like any other item, whatever it is, what goes up must come down. And that’s what happened with chia. Everyone in South America wanted in on the action. They all wanted to make some money. So, they all planted chia, and several new plants came online as well. And suddenly there was far more chia than there was demand. And prices dropped from $6 to a pound to in some cases as low as seventy cents a pound. And the losses for farmers and processors was enormous and several people got out of the business. So, this, of course, led to a shortage again and the prices went way up again. The cycle continues to this day. It’s either feast or famine. That’s generally what happens in the chia market. However, since then, several things have changed now versus ten years ago. First is that chia has been widely accepted and consumed by a lot of people, not only in the USA, but also in Asia. China has really developed an appetite for chia as well, so processors in South America and Mexico have had a lot more places to market their product. Consumption in North America remains high as well and continue to see growth in this category.

Today, the main growing regions are still in South America, with Paraguay being the biggest grower. There’s still some production in Argentina, but it’s dropped a lot. You’ll see chia from Bolivia, which is a big player, and from Peru and Chile. Mexico still produces chia as well, but a lot of their products being exported to China. One addition to the chia world has been Uganda. However, the quality has not always been the best from this region.

Chia harvest in South America kicks off in May and June and goes through September. By May we generally have a good idea how much was planted, but we’re always watching to see what happens with the frost. Two years ago, there was a ton of chia and the frost wiped out over half the crop and prices shot straight up and many shippers called force majeure and defaulted on their contracts. This is not uncommon in South America. It seems to happen every three to five years.

One suggestion for purchasing chia is to do it in two cycles. The first cycle is to purchase in November or December for your coverage through June or July. This ensures you have product as the new crop comes out. The second coverage should take place in June and July as harvest is happening and we see what the risk of the frost is. A lot of buyers will purchase in June for delivery in October through the next June. So overall, chia is a wild card almost every year and prices can swing as much as a dollar per pound, depending on what Mother Nature offers. One other thing that we watch, especially out of Paraguay, is there’s a red soil in Paraguay that’ll set off a metal detector. It’s actually magnetic, so you want to make sure you’re working with processors in Paraguay, especially if you’re buying it from Paraguay. They have really good systems in place to remove that on a gravity table, but then also with a lot of rare earth magnets to be able to pull it out as well because it’s not uncommon to see that come out of there.

Tom Merrow: Yeah, we see that a lot when we’re processing Donny. Sometimes we’ll have to clean our magnets one or two times per run and then when we get certain lots, we’ll have to do it after every single pallet. So that can really build up and maintaining and having a good on-staff QA team is really important.

Elisa Louis: Tom, anything else you want to weigh in on as far as what you’ve learned over the years with the chia crop and how to navigate it?

Tom Merrow: I would say from our standpoint since we know an importer, we sell whole seed, we sell flour, but also we do toll processing. So, if we’re having a great chia crop, we’re seeing that we’re able to sell products, move containers very quickly, minimal processing. But if we get a bad harvest, you have to start sourcing from other countries, maybe India, Uganda. New processors in South America will work together with importers and process their products. So our toll processing line will see a lot more activity during those different seasons.

And with our business as it’s been growing, we’re able to take a larger stance on importing and purchasing more product and getting sharper pricing. That’s where the relationship between me and Donny really come in very you know, sometimes we’re able to look at combining volume, complementing volume. It’s great to know Smirk’s as a good partner and figure out what we’re going to do in the next chia crop.

Donny Edson: Yeah, and I would say as for this season’s chia crop, we did manage to avoid a major frost damage in the major growing areas of Paraguay, which everyone still watches every year because we’ve got such a bad taste in our mouth from a couple of years ago. But I don’t know. Tom, to me this market feels very similar to last year for a few reasons.

One being there wasn’t a lot of chia left in the market prior to the arrival of new crop. Anybody who was buying stuff at the end of the crop last year was paying a premium versus where the new crop prices came out at.

So, shipments we have in September and October are new crop that are coming in. And I think just like last year, you’ll see the processors in South America have enormous export numbers in those months again. So really, there’s kind of two harvests that happened in South America, the first being in June. That one sold out pretty quick, and prices started to tick up. So, for the second year in a row, we’ve seen pricing. The best pricing happened the end of June and into the middle of July, and then it went up, and it kind of feels like that could happen again this year. So, I will say that the second harvest seems to be decent, the second part of the crop, and so I think there’s still plenty of chia to ship from South America. However, everyone wants to charge a premium for it, so I don’t know that we’ll drop back down to the prices that we saw a couple of months ago.

The other thing that happened last year, which time will tell if it happens again this year, is last year, all the processors went to the SIAL trade show in Paris in October, and the market spiked immediately. There was some activity happening during that trade show, and no one was anticipating the market to go up. Everybody kind of thought the market had a chance to soften a little bit in that time frame because all the first shipments went out, but it did the exact opposite. So it just seems that there’s not a ton of chia available in the US right now. I know Tom and I are talking about it as we’re trying to scrape together a load every now and then. So, it seems like everybody’s anxious for a new crop to come in, and when that new crop gets in, it may very well go right out as well. And so we could see an exact repeat of last year where the market starts to go up and it never comes back down again until we have an idea what happens with the crop next year.

Elisa Louis: Thanks, guys, for giving us the scoop on chia. It’s been really good stuff here. So lastly, or maybe not lastly, before I get into that, Tom, what’s the deal with the shoes? You got to tell me. What kind of shoes did you import?

Tom Merrow: We call them, we had two names. So, I was a substitute teacher at the time when I came up with the first idea, and that was right after college, and it’s called the softback shoe. So instead of tying your shoes, the back of the shoe would be very soft. You’d be able to slide your foot in very easily and just keep walking. And now I’m getting ads on Instagram and Facebook on all these different brands.

Donny Edson: I see them all the time, right? Yeah.

Tom Merrow: I get texts.

Elisa Louis: No way.

Tom Merrow: Say, hey, they’re copying you.

Elisa Louis: Yeah, right.

Tom Merrow: We had a provisional patent, and we pitched it to Puma and some a lot of the big brands, and they said, hey, we don’t take outside ideas, but that would be a lot of SKUs. Men, women, all those different sizes. Chia seed with Donny is much easier.

Elisa Louis: We go from shoes to chia. Wow. I’m impressed. So, all right, lastly, I mean, it’s really two-part question. First off, Tom, where do you see the trajectory of your business headed? I mean, are we going back to shoes or where are we going? And can you imagine any ways that Onset might totally pivot or somehow evolve to meet new market demands or changing trends in this industry?

Tom Merrow: I see the biggest growth for Onset in the coming years is really adding more value to our customers. So when it comes to Cassava Flour, do they need a low-lead product? Are the Prop 65 requirements making certain products harder to find? How we can take every ingredient and deliver the best product to the customer at a fair price? So, really diving into keeping the quality as high as we have today, meeting the new regulations. And what’s the next trend? What can we take from a chia seed and what can we make? We can make protein, but what are the options are there? So, we’re working with a lot of R and D teams to take the seeds that we import now and looking at other products we can build and relying on our customers’ R & D teams for feedback. And lastly, I would say maybe owning a little bit more of the supply chain. Maybe if we didn’t have to be as reliant on as many suppliers as we do now, maybe Smirk’s and Onset can buy a farm. Maybe we can grow our own sunflowers. It’s always looking at the next steps, and that’s one thing that Donny and I do very well. If it makes sense, we’ll do it. And if there’s enough demand, we’ll be there.

Elisa Louis: Tom, it’s been awesome having you on the podcast. And first off, I just got to say this. The two of you are like brothers from another mother. I mean, let’s face it, in looks and personality.

Tom Merrow: Donny, I would say we’re almost identical twins over here. You’re on the West Coast, I’m on the East Coast, and we cover everything in between.

Donny Edson: I wouldn’t agree. I couldn’t agree more. I guess I even grew my beard a little bit just to try to look like you today.

Tom Merrow: I shaved it extra just for you.

Elisa Louis: Very good. Well, I mean, we truly can’t say enough about the strong partnership we’ve had over the years. And thanks for taking the time to share some in-depth good stuff about your company. It was really fascinating. I mean, what an amazing entrepreneur you are. And you just showed us some great industry insights and tidbits about your experience, which we really, really appreciate. And we truly want our listeners out there to know that your website, onsetworldwide.com, is a great resource. I hope everybody will check out onsetworldwide.com because you can really learn a whole lot about Onset’s products, their value added services, and you can easily reach out to Tom and his team. So, thanks again so much, Tom. It’s been amazing. Appreciate your time and hope to see you again. Donny?

Donny Edson: Yeah, Tom, you know, we love working with you guys. And again, I would encourage all of our listeners to check out Tom’s company, especially as innovative as they are and all the ingredients they can do. It’s really a cool company and it’s got a great story behind it, and they’re just great people. I often wonder, though, if you consider changing the name to chias worldwide.

Tom Merrow: I think so. Between you and Jason, we got two votes in that direction, so I’ll bring it to Sarah and see what we can come up with.

Donny Edson: Awesome. Thanks again, Tom.

Tom Merrow: I appreciate Smirk’s so much, and I really contribute a lot of our growth to our partnership. So, here’s to Smirk’s. I appreciate it.

Elisa Louis: All right, so that wraps up another episode of the Get the Scoop with Smirk’s podcast. Thank you all for tuning in. If you have any questions about anything you heard in this podcast, please don’t hesitate to reach out to us at whatsnew@smirks.com. And next up, we’ll have our product feature segment. Thanks, everyone.


Chia Seeds Product Feature

Garrett McBride: Welcome to our Get the Scoop with Smirk’s episode number 7, product feature. Today we’re going to take a deep dive into the world of chia seeds. Chia seeds have a long history. They were a staple food for the ancient Aztecs and Mayan people dating back as far as 3500 BC. In fact, the word chia in ancient Mayan means strength. Aztec warriors use chia seeds to boost energy and increase stamina.

Donny Edson: Hey, Garrett, some of our listeners might remember the chia pet back in the 1980s as the commercial went Chacha Chachia commercials on TVs in the 80s that sparked the biggest Chia sales in the US. When you water the clay figurine, the seeds sprout to make it look like the fur of a Chia pet. Who would have thought that their sales would reach 15 million Chia pets in 2019? Today, chia seeds continue to be a growing commodity. According to Future Markets Insights, the worldwide market for chia seeds is expected to hit $203,000,000 in 2023. They projected it will reach 390,000,000 by the year 2033.

Garrett McBride: Man, I missed those chia pets and chia heads. I guess they’re still around. There were golden girls’ chia heads. Those are my favorites because I know you were interested. Turn into Smirk’s history with chia. We’ve been importing and selling chia since about 2010. Donny, can you talk about some of the origins we’ve been sourcing from and how that supply chain has evolved over time?

Donny Edson: Yeah, sure. I mean, in the very beginning, we started buying in Argentina, and Argentina was one of the really big players for chia seeds. And in the beginning, Mexico was one of the really big suppliers for chia seeds as well. But it was really hard to meet suppliers in Mexico at trade shows. And a lot of time their product was sold out already. But over the years it’s really evolved, with Paraguay being the biggest origin to buy chia seeds from particularly organic chia seeds. Most of them are coming out of Paraguay now. We also see quite a bit of product coming out of Bolivia. I think if you looked at the rankings for the countries, Paraguay is always number one, Bolivia is typically number two. And then Argentina might fall into number three or Mexico might fall into number three as well. But all the origins are Paraguay, Argentina, Bolivia with some production happening in Chile, some happening in Peru and Mexico. And in the last few years, we’ve seen chia start to be grown on the other side of the globe. Uganda has started to grow chia, India has started to grow chia, aswell.

Garrett McBride: What are the various chia specifications that we offer here at Smirk’s?

Donny Edson: There’s a number of different kinds of chia, but we offer both organic and conventional chia in a ready to eat format or a raw format. And what I mean by ready to eat is that the product has gone through a validated kill step to reduce pathogens. So over the years, as the demand has grown for this, some of the processors at origin have actually invested in the machinery. So we can import it sterilized from origin, with the main process being neo pured from Paraguay. However, then there’s also several people who do it inside the United States as well. And there’s several different kinds of machines that can reduce the pathogens and make it ready to eat. Black chia is by far the most common chia, both by what we import, what’s growing and what demand is in the market for it. We also bring in white chia seed for customers as well. Another spec is milled chia seed, and that is chia seed that has been ran through a roller to crush it into a powder. And there’s different specs for that from the grit size or how big the pieces are as well.

Garrett McBride: Yeah, that distinction between ready and raw is so important. Very, very critical that our customers understand the application so they can choose the right chia, keep the product safe for their end users. Hey, what’s the seasonality of chia and when’s the best time to contract?

Donny Edson: Generally speaking, the season know around May or June is when we start to see the early harvest in South America and it harvests all the way through September. So right kind of at the tail end of it right now for the stuff going on in South America. In Mexico, the harvest is more in the November December timeframe. So generally, you’d find that a little bit after what’s going on in South America.

Product from the new harvest is arriving in this month, in September and there’s a lot more on the way in October and more and more after that. So usually, we start contracting around July or August, but it’s certainly not too late to get your coverage. For Smirk’s, chia is one of our top selling items by volume, so we try to keep stock on hand for spot buys. But we usually recommend contracting your needs when possible, to ensure a steady supply. I would say though, too, we find it beneficial sometimes to almost do your chia and two contract cycles. So maybe you do one around harvest time when we have an idea of what’s going on, and then maybe you do another one to get you through when the next harvest will happen. So generally speaking, this year we’ve got most of our people contracted into next year. And as we get into November, December, and we can see how far out the processors can offer shipment, we’ll try to encourage people to book their needs through October next year so that they’re covered until the new crop comes in. And then when we get back to June and July and we have a clear picture of what the crop actually looks like, we’ll start doing the contracts again. So, I do find that it’s beneficial to kind of average it out between the two cycles every year.

Garrett McBride: Yeah, that’s great advice. Why is it you think chia consumption is on the rise?

Donny Edson: There’s a number of factors here. Chia is considered to be a superfood and is generally known to provide protein, fiber, and omega three fatty acids into the diet. When mixed with water, chia forms into a gel, which can have a sensation of making you feel more full when consumed. So, some people literally will just eat a spoonful of chia in the middle of when you get that couple of hours after lunch, and your kind of hungry and it will expand inside your stomach and it’ll fill you up. Plus, you get all the nutritional benefits that come along with it. So as far as proteins are concerned, plant-based proteins are still a pretty hot category and chia protein powder falls into this category. Also, when you think about plant-based proteins, there’s a group of people that have to avoid specific allergens such as nuts and certain seeds. And chia is not on the FDA’s list of major food allergens. So, it’s a good option for people with allergies.

Garrett McBride: Yeah, definitely. How else is chia being used or consumed?

Donny Edson: Of course, you commonly see it in straight packs and retail pouches, but there’s a variety of different applications for chia. Chia is an addition to fruit bowls and frozen yogurt. We also see it added to breakfast cereals, granolas protein bars, granola bars and snack chips.

In terms of baked goods, you’ll find chia added to crackers, breads, flatbreads, rolls, muffins cakes. Chia is also used in breakfast items such as pancakes and waffles.

You can look for it in beverages such as smoothies and juices. There’s increase in chia seeds used in newer applications such as chia oils, milks, and gels. Chia is also incorporated into puddings, energy gels, fruit spreads, and fruit and veggie squeeze pouches for kids. On the savory side, chia is added atop vegetable dishes such as rice and green salads. In my house, my kid’s favorite way to do it is to make overnight oats with chia inside of them. So generally, they’ll take some oats, add a spoonful of chia, maybe a little bit of protein powder to give it that little bit of sweetness and a little bit more protein, and then some kind of a milk inside of it. And they’ll just stir it up and let it sit overnight and then eat it with some fruit in the morning. So that’s one of my family’s favorite things to eat for breakfast.

In the soap and cosmetic industry, chia oil is used to produce lotions and other skin products. And Garrett, what’s really interesting as well is chia is used in the pet food market. It’s being added to animal feed, pet food, pet treats. It’s also very popular amongst horse enthusiasts because of the health benefits. It’s really good for horses as well.

Garrett McBride: Yeah, it’s pretty amazing, the list of applications for chia. This really is a miracle superfood here. Love the stuff myself. My family loves it. Can’t talk enough good about this ingredient.

We continue to see strong demand for chia, and the superfood is certainly a core item for Smirk’s. We look forward to working with more customers that want to expand their supply chain or explore new R & D projects using chia. Please hit us up if you have questions about chia or other bulk ingredients.

And that wraps up our product feature segment on chia. Please reach out to us by email at whatsnew@smirks.com, and we look forward to receiving your questions and your feedback.

Thank you very much.


Smirk’s September 2023 Market Report

Donny Edson: Here is the Smirk’s market report for September 2023. If you’d like to be added to the list to receive emailed market reports from Smirk’s, please drop us an email to whatsnew@smirks.com.

To begin with, I want to talk about the El Nino effect and what’s happening in Peru right now. We’ve seen quinoa prices steadily going up, and now we’ve seen prices increase anywhere from 20% to 30%. And a lot of this is from the El Nino effect there. In addition to quinoa, we’re seeing it affect cacao prices as cacao is trading at multiyear highs.

One other area that we’re really watching closely is the new crop of organic mango. Early indications for the new crop show pricing being 25% higher than they were last year. New crop will begin harvesting in November, and the first off will be the Edwards variety. Looking to Mexico is not really a good option right now, as they’re very low from their harvest this past summer because they anticipate a similar crop size this year. Also, the strong peso is keeping pricing higher from Mexico.

From India, word is the amaranth, especially organic amaranth, is almost sold out or sold out from some processors, and it’s becoming very, very tight right now. Peru does have product to offer as a backup, but prices are considerably higher than what we were seeing a few months ago from India. It’s also important to take note that the new crop harvest in India is not until April next year. So, if you need to get amaranth, we do recommend getting coverage on the books at least through June next year. If you’re having a hard time finding it from India, Peru is a good option.

In the world of coconut, Sri Lanka has entered into their dry season, and we’re starting to see prices creep up there. The Philippines keeps indicating the prices should firm up as a result of El Nino. However, we have not seen it too much. Actually, what we’re seeing in the Philippines is anyone in the northern region around Luzon is having a little bit firmer pricing, but people in the southern region in Mindanao are actually seeing great values from that region, and this isn’t uncommon. We’ve seen this before in years past, where even though they’re in the same country, we do see completely different climates and different crops and everything going on there. So sometimes it’s better to buy the stuff from Mindanao than it is from Luzon. Simply from the price standpoint. We are able to book contracts on coconut through at least June of 2024. Right now, some of the processors are giving us pricing through the Q one next year. So that does give us the ability to get people locked in. And I think it’s really important to try to lock in what you can right now, because there’s a lot of reasons this market could go up and very few reasons why it could go down.

Coconut oil market still remains stable. We see prices change $0.5 to $0.10 either direction, but no big swings yet on that one. However, if things do start to creep up on the desiccated market, we will see that happen on both RBD coconut oil and on virgin coconut oil.

Coconut sugar. The prolonged dry season is still a challenge for processors to get cut up on shipments. We are seeing some improvement, however, everyone is still a little bit behind, and a lot of the processors are booking up for shipments through the end of the year already. Keep in mind that Ramadan begins in March this year. When Ramadan starts, the country really shuts down for about a month, and that’s what really started the shortage of everything this year. So, it’s important to get some coverage for as far out as you can on coconut sugar right now to have a plan as we go into the Ramadan.

In the world of tree nuts, the almond report came out on September 12th  and showed lower shipment numbers for August. However, part of this is because of the delay of the new crop. The new crop is anywhere from two to three weeks behind schedule, and a lot of that has to do with the hurricane that hit Southern California a few weeks ago. Carryover was a very large number, but there are concerns that the predicted crop size could be off by about 200 million pounds. The early receipts of almonds they’ve been getting in have a lot of them that are higher percentage of non-edible nuts and a lot smaller nuts than they first anticipated.

From China, pine nuts, we’ve seen prices fall to very attractive levels. They may have hit bottom in early September as we’re starting to slowly see an increase, but they’re still really good values, especially on the cedar varieties.

In the world of macadamias, the prices fell so hard that there’s been more business happening now, and macadamia processors are slowly starting to increase their prices. It’s getting a little harder to find different grades as you’re going out shopping for them. Particularly, we’ve seen some price increases happening from South Africa and from Australia. Although they are starting to pick up a little bit, they’re still incredibly low levels versus where they have been the last few years, and they’re still a great value.

There’s a lot of action happening right now, especially in the Northern Hemisphere, with things being harvested. Some of the items that we’re watching right now are oats. Prices did firm up from the lows we saw this summer. This summer, a lot of the processors were working to work through the giant carryover they had, and so they put attractive pricing in front of everybody, and a lot of people did buy. The new crop is a lot smaller than last year’s crop, so we don’t anticipate seeing any price drops now on oats.

Sunflowers, all indications are there will be good supply of sunflowers domestically here in the US. And pricing is attractive from the US. There’s also good supply from Bulgaria, and this market still remains very, very flat and stable. Organic prices are stable as well, and we’re locking in people through contracts through the end of the second quarter of next year. We’re also seeing some really great values in locking people in on contracts on both organic and conventional Hyaluronic sunflower Oil.

The last item for the day is pumpkin. It’s important to note that there was a very small to almost no carryover in the shine skin crop this year in China. The crop is about the same size as last year, but when we were going into last year, there was a carryover. So another thing that’s happening is the fall festivals in China and the consumption will go up a little bit domestically, and that ultimately could drive the price up. A lot of the processors said that they used what was left over from the carryover, as small as it was to take care of what they’re going to need for the domestic consumption for the fall festival. Some other things to watch with it is will Europe come in and buy this year? Last year Europe wasn’t near as big a buyer as they were in the pumpkin market. And typically right around now and into the middle of October when Anuga happens, we’ll see Europe enter the market and start to buy pumpkin seeds. So, with that being said, with no carryover, with domestic consumption in China maybe going up, maybe not, that’s a wild card. With the Europe coming in to buy and with the US coming in to buy, we do anticipate pumpkin could maybe be a little bit firm. A few weeks ago, we were a little bearish on it, but now we’re feeling a little bit bullish on it. So, we have been able to offer contracts again through the second quarter of next year and probably could even go into the third quarter of next year right now on pumpkin seeds. On organic pumpkin seeds the crop is smaller in China, and we do recommend covering these. We don’t think that there’s any room for the price to drop on the organic side because everyone is talking about a smaller crop. On the organic pumpkin seeds in China, prices are still attractive. They’re not as attractive as they were years past when this was typically a really good time to buy pumpkins. But again, with the carryover not being there, with domestic consumption in China happening in the fall and with understanding if Europe is going to come in to buy, it might not be a bad idea to get some coverage on pumpkin seeds right now.

So again, that’s our market report for September 2023. And once again, if you’d like to be added to the list to receive email market reports from Smirks, please drop us an email at whatsnew@smirks.com.

Nick Erker: So that’s it for this episode of Get the Scoop with Smirks podcast, where we bring you the latest market reports, insights into bulk ingredients, and their origins, as well as in-depth product information. So, if you have any questions, or feedback, or just want a sample to taste for yourself, visit the smirks.com website or email us at whatsnew@smirks.com. Never miss a future episode. Be sure to hit the subscribe button wherever you listen to your podcast. Thanks so much for tuning in.

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