‘The sky is the limit’ for Mexican avocado growth

From The Packer | 15 November 2022

Overview of avocados from Mexico in the U.S. market, complemented by charts from Agronometrics. Original published on November 14, 2022. 

Avocados from Mexico are having a moment — that may last a lifetime.

Mexican avocado imports contributed a record $11.2 billion to the U.S. economy in the 2021-22 growing season, according to a recent report from Texas A&M University.

And as to future growth, “the sky is the limit,” said Stephanie Bazan, vice president of shopper and trade marketing at Avocados From Mexico. “Avocados grow year-round in Michoacán, so we have a steady supply of delicious avocados to meet increasing consumer demand. And with the addition of the state of Jalisco to the import program, we have even more avocados available for U.S. consumers with the same commitment to quality and traceability.”

The USDA formally authorized the export of avocados from Jalisco, Mexico, to the U.S. in July, expanding operations for some grower-shippers and helping to bolster supplies of the popular fruit at retail.

“The approval of the Jalisco area has significantly changed our avocado business at Seald Sweet,” said Carlos Sotomayor of the Vero Beach, Fla.-based company.

Seald Sweet has partnered with Las Tarascas, a family-owned company that has grown produce in Mexico for more than 20 years. “Our companies are aligned with providing sustainable and high-quality product to the U.S. market with a direct line to the grower and product,” Sotomayor added.

avocado volumes by origi 23

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

While avocados from Jalisco still represent a modest contribution to the U.S. supply chain, they may help to break records in the future.

“In fact, this year we are projected to import a record volume of avocados,” said Bazan, who sees U.S. demand for the fruit driven by diverse populations, increased use of avocados in foodservice operations and consumers increasingly embracing global and health-promoting foods.

“More people are discovering the great taste and nutritional value of avocados, so naturally, demand continues to grow,” said Joe Nava, vice president of sales and business development for West Pak Avocado, Murrieta, Calif.

But while grower-shippers agree that a consistent and quality supply of avocados is critical to category success, as global production increases, the industry must also continue to focus on customer satisfaction, says John Dmytriw, vice president of business development for Index Fresh in Corona, Calif.

“Undoubtedly, the popularity surrounding this fruit continues to grow each year,” he said. “However, we must keep consumers thrilled daily with the fruit they take home or enjoy while away from their homes.”

Continuing to attract new consumers is equally important to the ongoing success of avocados.

“The produce industry has enjoyed explosive growth over the past 20 years. That said, the real work has only just begun,” Dmytriw said. “New plantings continue each year, and thus, more fruit must enter the market. Advances in growing techniques have enabled some countries to accelerate fruit production, [and] we are beginning to see signs of global production outpacing demand.

“We as an industry will need to roll up our sleeves and get avocados into the hands of people who have yet to try them, but more importantly, turn them into super-repeat users,” he added.

The increasingly aware avocado shopper

“We’re noticing that the consumer is becoming more aware of the taste and texture differences of avocados from different countries,” Nava said. “Today’s shopper knows what a good avocado tastes like, and they seek fruit from specific regions, including Mexico and California.

“Also, the reputation of avocados from these regions certainly precedes the fruit,” he continued. “The popularity of avocados from Mexico will continue to grow as more restaurants and retailers proudly promote them.”

Aiming to increase consumer avocado education and excitement, West Pak launched its 100% Avo-Focused campaign at the International Fresh Produce Association’s Global Produce and Flower Show in Orlando, Fla.

“The new campaign showcases our singular dedication to avocados and includes a newly launched website and brand video,” Nava said. “There are also social media and marketing initiatives and enhanced offerings for our wholesale, retail and foodservice customers.”

To keep pace with demand, West Pak has extended its sourcing regions, including expanding grower operations in Mexico.

Provided that sourcing keeps up with the demand of the past five years, “there is always room for growth,” Nava added.

Sotomayor of Seald Sweet agrees that in addition to consistency of supply and quality, communication directly from the farm is critical to driving consumption.

“Consumer education is key to increasing consumption,” he said. From traceability back to the farm to corporate and social responsibility practices on the farm to cooking tips and tricks, the more consumers know about the product, the likelier they are to buy more, he says.

And as rising food inflation continues to impact households across the country and around the globe, the industry is watching how the current climate may affect avocado sales.

“The newest trend will be stretching that dollar — whether it’s going out, cooking at home or ordering in. Many live paycheck to paycheck in the U.S.; even so, avocados remain one of the most popular items in restaurant kitchens and retailers’ produce departments,” Dmytriw said. “That says a lot for the avocado.

“We as suppliers and producers need to be the guardians of this trust, placed upon us by consumers, to do the very best we can each day to deliver the highest quality avocado every time,” he added.

Dmytriw also sees tremendous value in offering the consumer value.

“Suppliers and retailers can and should lean into the volume when it is readily available,” he said. “A good supplier keeps customers informed of these ‘flush’ events.”

Big growth in bags

While bulk avocados represent the majority of category purchases, bagged avocados continue to drive sales, according to the Hass Avocado Board. Its “Better Together: Bagged and Bulk Avocado Shopper Trends” report from 2021 found that while bulk avocado purchases made up 73% of purchases in 2019 (up 10% from 2016), bagged avocado purchases made up 27% of purchases in 2019, an increase of more than 34% since 2016.

“Since the evolution of COVID, the avocado bag segment growth rate is outpacing the growth of the avocado category,” said Andrew Bruno, president at Naturipe Avocado Farms. “The increase in this bag segment is largely driven by our retail partners’ merchandising and promotional strategies, coupled with customer preferences that have been influenced by COVID. We anticipate continued growth in this segment.”

While Bruno finds that avocado growth has been stagnant in recent months, Naturipe continues to foresee category growth in the long run.

“Retailers and suppliers have always worked and communicated extremely well together to understand the promotional opportunities,” he said. “Continuing this coordination is essential to drive consumption.”

Avocado consumption trends

Expanding consumption opportunities for avocados is another important factor in driving category growth, say suppliers.

“Top trending culinary uses for avocados include guacamole, the beloved avocado toast and tacos,” said Raina Nelson, president and CEO of Westfalia Fruit Marketing USA. “We also like to see avocados as a foundation for healthy eating plans in salads, as snacks and as standalone sides.

“Consumers are looking for quality and consistency in their avocados and our consumer research indicates that some consumers do indeed recognize that avocados from Mexico yield premium fruit,” she added.

With the holiday season in view, Nelson says Westfalia is working with its retail and foodservice partners to design and support promotions that resonate with its customers.

“Price points are ideal, and there is plenty of supply to place Westfalia avocados on holiday menus,” she said.

Westfalia also recognizes that avocado consumption varies across the U.S., which the company sees an additional opportunity for growth.

“Proactively planning and creating innovative solutions with supply partners to actualize successful promotions and drive basket rings for avocados is paramount,” Nelson said. “Being aligned from the grove to the retail shelf is a huge success factor. Quality will always be a key in promotional success, and fourth quarter is Mexico’s period to shine.”

Promotional opportunities abound

“Grow your avocado category with expert ripening programs, promotional advertisements, and consumer-friendly retail displays,” said Jennifer Anazawa, senior category manager for Mission Produce, Oxnard, Calif.

In an Avocado Purchase Drivers Survey, Oct. 6, 2021, Mission Produce Avocado Intel found that over half of shoppers said the last time they bought avocados, they did so on impulse.

“So, capture their attention with bountiful displays in the front of the store,” says Anazawa, who adds “promotional advertising [also] can help encourage more avocado purchases.”

Anazawa points to an Avocado Intel Survey of 500 Avocado Shoppers, Oct. 17, 2022, which found that approximately 27% of avocado shoppers said they check circular ads for sales on avocados, and approximately 24% check online for digital coupons.

Avocados From Mexico offers tips for retail promotion

How can retailers support the growth of Mexican avocados? AFM’s Stephanie Bazan offers the following tips:

Selection: Having the right selection for your customer base is important, including dual size offerings that will give shoppers a choice. Also, based on AFM proprietary research, we know some of the key attributes shoppers want are both avocados that are ready to eat now and ready to eat later. Having an assortment based on this insight will help drive units per trip.

Merchandising:  We also know that the way avocados are displayed in the store influences conversion. Seeing avocados merchandised at the produce entrance or next to fresh complementary items such as tomatoes and onions or near chips through eye-catching displays are ways to attract the shopper. We like to call it creating “guacamole destinations.” Also, if a retailer carries bags, good solutions for displaying bagged avocados are key.

Retailers can work with Avocados From Mexico on various merchandising solutions for both bag and bulk.

Promotions:  AFM can help build baskets with its year-round promotional solutions to help drive demand. Any retailer can contact an AFM regional director or visit the Avocados From Mexico website for more information about year-round programs to help drive conversion.

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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