The Californian Nut Industry's Prolonged Theft Issue

This study highlights the significant problem of theft in the Californian nut industry, with international gangs posing as truckers to steal nuts worth millions. The analysis emphasizes the need for businesses to secure their databases and verify logistics companies before transporting consignments. It also suggests that governments and police should provide more aggressive assistance to these firms to combat nut thefts.

Running head: THE NUT THEFTS IN CALIFORNIA
The Nut Thefts in California
Name of the Student:
Name of the University:
Author Note:

THE NUT THEFTS IN CALIFORNIA
1
Table of Contents
Part 1: Introduction of the case:.......................................................................................................2
Part 2: Nut industry supply chain in California:..............................................................................3
Part 3: Vulnerability of the nut supply chain in California and exploitation by thieves:................5
Part 4: A tabular demonstration of the nut industry in California:..................................................6
Part 5: A table showing cost of nut thefts to the Californian nut industry:.....................................8
Part 6: Table showing cost of nut thefts at supply chain points in California:................................8
Part 7: Solutions to prevent nut thefts in the supply chain:.............................................................9
Secure their data:.........................................................................................................................9
Use only trusted logistics companies:........................................................................................10
Acquisition of transport companies:..........................................................................................10
Verification of the identity of the transport companies:............................................................10
Part 8: Cost savings as outcome of the above recommended steps:..............................................10
Part 9: Conclusion:........................................................................................................................11
References:....................................................................................................................................13

THE NUT THEFTS IN CALIFORNIA
2
Part 1: Introduction of the case:
California is the one of the highest nut growing region in the United States of America
with increasing land areas allotted towards the crops as shown in the first figure. The second
figure shows that nuts the US exports to three European nations alone values millions of dollars.
One can infer from these two figures that the nut crops grown in California worth high export
value and comprise complex supply chains. The complex supply chain of nuts in California
require both the producers and purchasers of nuts depend on logistics companies a great deal.
This important position of logistics in the supply chain has led to entry of illegal logistics
companies which are in turn connected to groups involved in illegal laundering of nuts, thus
causing immense losses to the business units involved in the trade. This complex supply chain
and the theft of nuts in California would form the background of the paper.
Figure 1. Graph showing walnut production in California.
(Source: apps1.cdfa.ca.gov 2018)

THE NUT THEFTS IN CALIFORNIA
3
Figure 2. Table showing value of US nut imports to three European countries
(Source: apps.fas.usda.gov 2018)
Part 2: Nut industry supply chain in California:
The nut industry supply chain in California is extremely complex which makes it difficult
for the producers and purchasers to control it. The supply chain of the walnut consist of farmers,
collectors, traders, walnut crackers, processors and distributors chains. The domestic distributors
sell the walnut products within the US to the retail chains. The distributor chains consist of
exporters, distributors, wholesalers and retailers. The exporters export the walnut products like
fruits and kernels processed by the processors (Robertson 2018). The wholesalers and
distributors purchase the walnuts from the firms importing these walnut products and sell them to
the retailers. The retailers consist of shops, supermarkets and cart retailers. The above mentioned
participants are often situated in different locations like the farms producing the nuts and the
processing units may be situated in different places. This requires these participants to depend
largely on the transport and warehousing companies to store and transport the nut products
(Christopher 2016).

Collector
firms Logistics company 1
Processing
units
Logistics company 2
Traders
Logistics company 3
Distributors and
wholesalers
Retailers
(shops, super
markets and
carts)
End
customers
THE NUT THEFTS IN CALIFORNIA
4
Nut farmer
1
Nut farmer
2
Nut farmer
4
Nut farmer
3

THE NUT THEFTS IN CALIFORNIA
5
Figure 3. Supply chain of nuts with the US
(Source: Author)
Part 3: Vulnerability of the nut supply chain in California and exploitation by thieves:
The nut supply regions in the United States including California have become extremely
vulnerable to thefts by illegal groups. The thefts of food products have become prevalent in the
US and nuts have become one of the most theft food items. This is because, unlike packaged
food products, nuts cannot be marked with information with name of suppliers and are very
expensive commodities with high international prices. The organizations involved in stealing of
nuts are financially and technologically strong firms. These firms have access to the modern
hacking technology and use computer virus to infiltrate into the database of companies involved
in the nut supply chain. They gain sensitive information like the amount of nut to shipped, the
time of shipment, the destination and the cost of the consignment (Jacobs, Chase and Lummus
2014). They then forge the legal documents to appear as genuine companies involved in
transporting nuts. They hire trucks which arrive at the premises or warehouses of the consignor
for pickup of nut load. They then drive the nuts to use them for their illegal activities and earn
amount of revenue to support their laundering business. Some illegal nut laundering
organizations hire different drivers for different pick-ups to hide their identities from these
drivers. Thus, they have the knowledge to forge legal loopholes and technology to breach data
securities of business organizations to steal nuts. These nut laundering organizations are spread
internationally and are able to escape the police networks of the US (Monczka et al. 2015).

THE NUT THEFTS IN CALIFORNIA
6
Part 4: A tabular demonstration of the nut industry in California:
Figure 4.Table showing walnut production in California in 2017
(Source: nass.usda.gov 2018)

THE NUT THEFTS IN CALIFORNIA
7 Figure 5. Table showing almond sales in California
(Source: nass.usda.gov 2018)
The tables on top shows the amount of walnut and almonds cultivated along with the
price measures in 1000 dollars in California. One can infer from these tables that the nut farms in
California produce nuts worth billions of dollars which require immense initial investments from
the farmers. The table further makes it clear that theft of nuts though cannot be estimated but the
amount is huge (Brandenburg et al. 2014).

THE NUT THEFTS IN CALIFORNIA
8
Part 5: A table showing cost of nut thefts to the Californian nut industry:
It is very difficult to estimate the exact value of the nut theft in California as the thefts go
undetected. An estimation shows that approximately 81 percent of the nut thefts take place in
California. According to the leading international daily, the value of the stolen nuts in California
range $500000 which is immense (dailymail.co.uk 2018). This shows that the cost of nut thefts
in California is huge but cannot be measured accurately since the groups involved succeed in
escaping most of the time posing as legitimate business firms.
Figure 6. Figure showing an estimated amount of nut theft in five US regions
(Source: avalonrisk.com 2018)
Part 6: Table showing cost of nut thefts at supply chain points in California:
The third figure shows three logistics companies which would enable estimated the cost
of nut thefts in the region of California. One can assume that all the three logistics companies are
involved in nut thefts. The fourth and fifth table shows the value of almonds and walnuts
respectively. It has been assumed that the same firm is involved in delivering the walnuts and
almonds and the thefts take at three stages in the supply chain. The table shows that the total
value of the nuts stolen at the three stages in the supply chain ultimately reaches a value of
$1734351220 which is approximately 30 percent of the total value of the nuts combined.

THE NUT THEFTS IN CALIFORNIA
9
Total value of
walnuts in 2016
as per figure
4($)
Walnut 1241660000
Almond 5158160000
Total value 6399820000
Less: theft by logistics
company 1(10 %) 639982000
Remaining 5759838000
Less: theft by logistics
company 2(10 %) 575983800
Remaining 5183854200
Less: theft by logistics
company 3(10 %) 518385420
Final amount of nuts
remaining 4665468780
Total value of nuts stolen 1734351220
Figure 7. Figure showing value at nuts stolen in 3 stages in supply chain
(Source: Author)
Part 7: Solutions to prevent nut thefts in the supply chain:
The following are the steps which the business firms involved in the nut supply chain can
adopt at each step of the chain to prevent or at least minimize the heavy losses they suffer to the
thefts:
Secure their data:
The business firms should secure their data systems using modern technology to secure
shipment data from the nut laundering firms. They should mandate usage of passwords for
entering data bases even by their senior employees. They should train their employees to use data
in a responsible manner to prevent thefts. These measures would prevent the illegal nut stealing

THE NUT THEFTS IN CALIFORNIA
10
organizations from hacking future shipment information and taking advantage of the same (Mani
et al. 2017).
Use only trusted logistics companies:
The nut consigning firms should use the logistics services which they are familiar with.
These steps would prevent the laundering companies from entering the logistics chain used by
the firms to transport their nuts (Monczka et al. 2015).
Acquisition of transport companies:
The big nuts farming companies should acquire transport companies which would
exclusively serve their own supply chains. Thus, the big nut transporting companies which
transport nuts of high values would not have to depend or involve third party transporters. This
would prevent the nut laundering circles from rendering services to supply chains of the big nut
companies and steal their produce (Govindan, Soleimani and Kannan, 2015).
Verification of the identity of the transport companies:
The nut supplying companies should verify the registration and other identity documents
of the logistics companies. They should demand for the documents at least a week before the
date shipment so that they can verify the credibility of the logistics company. This would also
inform the police if they recognize any discrepancy. These stringent steps would prevent or at
least the nut laundering rackets from entering the nut supply chain (avalonrisk.com 2018).
Part 8: Cost savings as outcome of the above recommended steps:
Total prevention of nut stealing is almost impossible because compared to the small firms
involved in the nut supply chain, the nut stealing rackets are internationally spread and are
financially and technology powerful. The figure below shows that if the above recommended

THE NUT THEFTS IN CALIFORNIA
11
steps are adopted by the nut suppliers at each stage in the nut supply chain, they would save $
4838903902. It has been assumed that the nut supply has fallen by a mere 10 percent.
Total value of
walnuts in 2016
as per figure
4($)
Walnut 1241660000
Almond 5158160000
Total value 6399820000
Less: theft by logistics
company 1(10 %) 639982000
Remaining 5759838000
Less: theft by logistics
company 2(10 %) 575983800
Remaining 5183854200
Less: theft by logistics
company 3(10 %) 518385420
Final amount of nuts
remaining 4665468780
Total value of nuts stolen 1734351220
Reduction in theft (10%) 173435122
Amount saved 4838903902
Figure 8. Table showing savings by fall of theft by 10 percent
(Source: Author)
Part 9: Conclusion:
The above study points out that the Californian nut industry is prone to theft end theft.
The stealing organizations are internationally spread criminal organizations involved in black
marketing of nuts to earn huge revenue. The nut selling firms should adopt the steps like

THE NUT THEFTS IN CALIFORNIA
12
securing their databases and verifying the validity of the logistics companies before transporting
the nut consignments. The government and the police of the USA should also assist these
business firms more aggressively to check nut thefts.

THE NUT THEFTS IN CALIFORNIA
13
References:
Apps.fas.usda.gov. 2018. Belgium-Luxembourg Tree Nuts Benelux Tree Nuts 2007. [online]
Available at: https://apps.fas.usda.gov/gainfiles/200702/146280116.doc [Accessed 24 Mar.
2018].
Apps1.cdfa.ca.gov. 2018. Walnut Production in California. [online] Available at:
https://apps1.cdfa.ca.gov/FertilizerResearch/docs/Walnut_Production_CA.pdf [Accessed 24
Mar. 2018].
Avalonrisk.com. 2018. The Rise of Nut Theft in the U.S. | Quest News 2016 | Avalon Risk
Management. [online] Available at:
https://www.avalonrisk.com/NewsArticles/2016/news_160607_Nut_Theft.html [Accessed 26
Mar. 2018].
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for
sustainable supply chain management: Developments and directions. European Journal of
Operational Research, 233(2), pp.299-312.
Christopher, M. 2016. Logistics & supply chain management. Pearson UK.
Govindan, K., Soleimani, H. and Kannan, D., 2015. Reverse logistics and closed-loop supply
chain: A comprehensive review to explore the future. European Journal of Operational
Research, 240(3), pp.603-626.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain
management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.

THE NUT THEFTS IN CALIFORNIA
14
Khan, O. and Estay, D.A.S., 2015. Supply chain cyber-resilience: Creating an agenda for future
research. Technology Innovation Management Review, 5(4).
Mail Online. 2018. How international gangs pose as truckers to steal nuts worth millions.
[online] Available at: http://www.dailymail.co.uk/news/article-3539168/Thieves-targeting-
California-almonds-walnuts.html [Accessed 26 Mar. 2018].
Mani, V., Delgado, C., Hazen, B.T. and Patel, P., 2017. Mitigating supply chain risk via
sustainability using big data analytics: evidence from the manufacturing supply
chain. Sustainability, 9(4), p.608.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain
management. Cengage Learning.
Nass.usda.gov. 2018. 2017 California Walnut Objective Measurement Report. [online] Available
at: https://www.nass.usda.gov/Statistics_by_State/California/Publications/Fruits_and_Nuts/
2017/201709walom.pdf [Accessed 26 Mar. 2018].
Robertson, A. 2018. Theft at work. In Profiling property crimes (pp. 195-218). Routledge.