Growers making Virginia Peanuts a brand

Virginia Business
January 2006

Virginia offers the right climate and soil conditions for turning out a big, premium-variety peanut called, appropriately enough, the Virginia Peanut. It’s a variety that has gained a following and is in demand as far away as Eastern Europe and Asia. Unfortunately, local farmers have been none too eager to plant “Virginias,” thanks to federal farm legislation that eliminated price supports. Prices for peanuts have dropped from $650 to $320 per ton. As a result, the number of acres devoted to peanuts in Virginia has declined rapidly, from 115,000 acres in the late 1980s to less than 20,000 acres this year.

In reaction to these trends, the Virginia Peanut Growers Associ-ation decided to take a more aggressive approach to marketing and selling its product. The group recently joined forces with growers in North Carolina and South Carolina and filed a trademark on the name Virginia Peanuts, in hopes of distinguishing its peanuts from those grown in West Texas, Brazil and China.

“The only people who will be able to call them Virginia Peanuts will be people who actually raise them in the Virginia-Carolina region,” says Tommy Rountree, president of the Virginia Peanut Growers Association. “It’s just like the Vidalia onion. You can raise a sweet onion anywhere in the world, but to be called Vidalias, they have to be raised in Vidalia, Georgia.”
In branding their peanuts, growers hope that consumers will associate the product with taste, size and quality and that they eventually will be willing to pay more, just as they do for branded aspirin. “The No. 1 and only reason we’re doing any of this is to increase the income to the peanut producers,” Rountree says.

The price for peanuts has to increase to $500 a ton “to stop the bleeding,” he says, and $750 a ton for the industry to grow and prosper. To facilitate this change, the association is also negotiating a deal with peanut shellers. Currently, growers sell their crop to shellers. A new arrangement would have the growers instead pay a fee for shelling and then selling the peanuts to the supply chain.

“A lot of people have said that there’s no way we can double the price of our product, but if we can retain ownership closer to the consumer and increase the prestige of the product and the price of it around the brand, then we think we’ve got a good shot at making it happen,” Rountree says.