Alternative HL: Almonds Sell Rise, But Profits Are Slipping For Modern Retail
Reliance Retail’s Dilip Mohanty flags margin stress as price volatility and online discounting reshape the dry fruit trade
Modern retail in India is witnessing steady growth in almond sales, but retail margins have come under sharp pressure as rising volumes have not translated into higher profitability, highlighting structural pressures in the market. While almonds remain one of the fastest-moving dry fruit categories, Senior executives flagged margin compression, price swings, and competition from ecommerce platforms as key challenges confronting retailers.
Dilip Mohanty, Executive Vice President, Reliance Retail, described almonds as a “volume builder” and “growth engine” for modern trade. “We use it as a hook. People come to buy almonds, they buy ten other things,” he said, noting that private labels benefit from product standardisation.
India imports nearly 190,000 tonnes of almonds annually, with modern retail accounting for roughly 18 per cent of this volume. Reliance Retail alone handles close to 7,000 tonnes a year.
Volumes Rise, Margins Shrink
Despite rising volumes, gross margins have fallen sharply, from around 16 per cent in 2012 to 7–8 per cent currently. Mohanty said the shift toward larger pack sizes, especially the 500-gram pack now dominating 83 per cent of sales, has eroded profitability.
“Volumes are increasing, but the margins are dropping terribly. Sixteen per cent has gone down to 7–8 per cent at the moment…We are selling more, but we are making less money,” Mohanty noted while speaking at Mewa India 2026, even adding that the margin squeeze is not limited to almonds alone but extends across other nuts and dry fruits, including cashews and raisins, describing it as a growing financial challenge for organised retailers.
Price Volatility And Online Pressure
Price volatility has exacerbated the problem. Almond prices fluctuated from Rs 550 per kg to above Rs 800 per kg over the past four years, impacting demand. Mohanty explained, “After Rs 600, we see the market falls a bit. Demand falls a bit. After Rs 700, there is a drop in the uptake of the consumers. That is what we see. And you see, in spite of rising prices, the retail margins are reducing.”
This instability, coupled with aggressive discounting by online platforms, has put pressure on retailers to lower prices, compressing margins further. “They burn a lot of investors’ money. And since we are one of the biggest in the industry and we are the leaders in the industry, we can keep our prices higher. So we have to reduce our prices,” Mohanty said.
Online penetration in dry fruits now stands at 25 per cent, compared with 15 per cent for offline channels. Almonds form 36 per cent of online dry fruit sales, versus 24 per cent in physical stores, highlighting the category’s vulnerability to digital price wars.
Supply-Side Complexity
Industry participants also flagged ongoing tensions around in-shell versus kernel pricing, particularly as buyers question premiums charged for larger sizes.
Neil Zacky, Senior International Trader, Decro Food, said India remains fundamentally a kernel-driven market.“India is a kernel market. India buys in-shell because of duty reasons and also because there is a handcrafted or machine-crafted component that is very quality-conscious,” he said. He added that size-based pricing evolved over time to create consistency and premium differentiation, though it has also created complexity for buyers managing costs.
Supply-side practices such as ‘floating’ consignments, almonds shipped without firm contracts and held in transit, have added another layer of uncertainty. Executives said floaters have become more visible in the Indian market over the past two years, particularly for in-shell almonds.
Varietal Shifts And Global Uncertainty
Varietal trends are also shifting. Independence almonds, priced lower than the premium Nonpareil variety, are gaining acceptance among cost-conscious consumers. Mohanty said the price gap has widened to Rs 70–Rs 75 per kg from just Rs 10– 20 a few years ago. “Independence is being accepted very well now,” he said, though Nonpareil continues to dominate the premium segment with a capture of 69 per cent of the market, followed by Independence contributing 19 per cent.
Global trade uncertainties, including tariffs and currency movements, remain a key risk. Tim Jackson, CEO, Almond Board of Austrila said exporters are increasingly putting goods on the water to hedge against tariff unpredictability, with them reducing 50 per cent tariff reduction of production coming to India last year. “The only consistency we have right now is inconsistency,” Zacky said, referring to frequent policy shifts and tariffs. While India has seen some tariff relief on Californian almonds, participants said uncertainty around global trade routes continues to influence pricing and supply decisions.
Despite the challenges, industry participants remained optimistic about long-term demand. Zacky said, “India is a consistent market. The way they buy and they pull is rather stable. It does have a large emphasis for some of the holiday seasons and weddings, but it’s not like the other in-shell markets such as China, where there’s a very large pull for the Chinese New Year.”
Evan West, Sales Director, Blude Daimond Growers, added that India’s imports have grown at a 12 per cent CAGR over the past nine years, prompting exporters to prioritise the market despite short-term price volatility.
