A young hazelnut orchard near Canby. Growers at George Packing and Northwest Hazelnut Company are counting on increasing yields from new plantings to further expand their value-added hazelnut products.

What started as an FFA project in 1986 not only put Larry George through college; it spawned a business that now handles over half the hazelnuts produced in the U.S.

Owned by brothers Larry and Shaun George, George Packing and Northwest Hazelnut Company, with plants in Hubbard, Salem and Newberg, Ore., is the country’s largest processor of hazelnuts, a crop grown almost entirely in the Willamette Valley.

The recent launch of their new product, Nutlicious, a hazelnut butter, is for them the natural next step.

“While whole kernels move very fast in the market, the broken pieces don’t, and what’s exciting is that we can now recapture those byproducts and turn them into some really high-end products that do well for our farmers,” Larry George said. “Numerous companies have tried adding value to whole hazelnuts by simply putting them into snack packs to compete with almonds, but almonds are so inexpensive that many such efforts have failed.”

Nut spreads, fillers and pralines are a complex but extremely competitive way to significantly increase the U.S. hazelnut market. Nutlicious branded hazelnut spread stands apart in that it contains 50% nuts — more than three times the amount in most spreads currently on the market — with about 40% less sugar.

“People love getting nut fats into their diet,” George said. “They are viewed as healthy calories.

“We made this breakthrough that no one else has with a straight hazelnut butter and it’s unbelievably good,” George said. “We’re very proud of it and everywhere we go people cannot believe that we were able to create such a smooth, delicious hazelnut butter.”

Nutlicious began working within the food service industry by manufacturing products like hazelnut fillings for pre-made crepes and creating private label jars a year ago, but only launched its own retail product in November.

Currently available on their website, Nutlicious should start rolling out on retail shelves over the next 18 months.

In addition to the straight nut butter, Nutlicious offers cocoa and dark cocoa spreads. Light roast coffee and dark roast coffee hazelnut spreads are coming soon.

“We’re using real ground coffee beans and the new hazelnut spreads are unbelievable,” George said.

“We’re seeing a lot of interest from chefs using them in or on morning pastries. “We’re very happy with how many companies are reaching out to us about the kinds of products we can produce for them and have an extremely experienced and creative R & D department,” George said.

The Georges acquired the equipment for the process over five years ago but needed a sufficient flow of hazelnuts from Oregon farmers to justify building the new plant.

“We kept believing we’d see more volume sooner, but the supply of Oregon hazelnuts is very fragmented with many Oregon processors taking market share, so we were forced to delay construction for almost four years,” George said. “We had to wait for new volumes from recent plantings to catch up.

“With all the new plantings still coming on, we are confident of a good return on our investment,” George said. “Unlike in Europe, hazelnuts are still a new flavor in the U.S., so it’s really easy for us to start expanding in new markets as the larger hazelnut volumes arrive at our plants.”