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Pistachio supply concerns spur diversified sourcing strategies

Geopolitical and climate-change shocks have highlighted the threats to pistachio supply, prompting alternative formulations and long-term sourcing solutions.

The blockade of the Strait of Hormuz in recent months has shone a spotlight on restricted pistachio supplies. Iran is the second-largest pistachio producer in the world, behind the US and ahead of Turkey. It accounts for almost a fifth (18%) of global supply, producing 200,000 metric tonnes in the 2025/2026 season.

An ingredient under pressure

In March 2026, Bloomberg pistachio prices reached an eight-year high of €3.98 ($4.57) per pound. Key ports near the Strait of Hormuz have been heavily affected by the war, severely disrupting the growers' ability to transport pistachios to global markets. According to MSN, Iranian customs data shows pistachio exports decreased by 30% between March and May 2026 compared to the previous year.

Prior to the Iranian war breaking out, the pistachio market was already under strain. Drought hindered harvest production in its core markets in 2025.

Then, in January 2026, the government in Tehran closed down the internet in response to internal unrest, restricting exporters' and foreign buyers' communication channels.

Pistachios: A trending ingredient

Supply limitations coincide with a boom in demand for pistachios, particularly the Tik Tok-led “Dubai chocolate” trend. The product uses substantial amounts of pistachio kernels in the pistachio cream filling, placing additional pressure on producers to develop formulation solutions.

To keep up with demand, Iranian producers exported 40% more pistachios to the United Arab Emirates (UAE) in the six months to March 2025 than in the entire prior year.

Perhaps surprisingly, supply shortages have not deterred brands, Big-name brands like Lindt & Sprüngli and Ritter Sport introduced new creations and Aero introducing its new pistachio-flavoured chocolate bar in April 2026.

Formulations free from pistachios

Pistachios are tree crops and it takes between five and 10 years from planting for them to reach significant production. Although other suitable places to grow pistachio trees exist, over 85% are currently grown in the US, Iran, and Turkey.

“[This means] their supply cannot be significantly diversified in the short term,” Peter Wortsman, partner at EFFP, an agri-food consultancy, told Ingredients Network. “As prices increase due to supply shortages, both consumers and food manufacturers will likely substitute away from pistachios,” Wortsman said.

For food manufacturers, a potential rise in pistachio costs may require recipe reformulation. Swapping ingredients or modifying ingredient ratios would allow manufacturers to use fewer pistachios. Brands could explore using other nuts, seeds, nut extracts, edible oils, or even food colouring to achieve a green pistachio colour, depending on the product.

A long-term perspective is lacking

To increase resilience, food industry attention should turn to how to prevent similar shortages in the future. Transforming pistachio production to protect it against unpredictable, volatile changes in the food system requires investment and a new diversification strategy.

However, the economics of the food industry may be a barrier to maintaining a strong, sufficient pistachio supply that meets consumer demand.

“Unfortunately, decision makers and investors in food businesses are rarely incentivised to make investments which only pay off in the medium and longer term,” said Wortsman. “This has resulted in a fragile food system increasingly exposed to climate, market and geopolitical shocks.”

Food manufacturers that use pistachios in their current formulations, or want to ensure sufficient supply for new product developments, will need to build resilience to future shocks, reduce costs and grow market share.

Strengthening relationships along the value chain and exploring new supply sources can help ensure sufficient and ongoing access to pistachios. “There is an opportunity to work with growers and invest in diversifying their supply today, though this requires a longer-term perspective and commitment,” Wortsman added.