Calavo sees increase in value-added programs keep pace with volume growth
Calavo sees increase in value-added programs keep pace with volume growth
Preconditioning and bagging programs at Calavo Growers Inc. in Santa Paula, CA, have grown steadily through the years, but not always as a percentage of volume, according to Rob Wedin, vice president of fresh sales.
In 2010, which was a large crop year for California avocados and a record year for aggregate avocado volume in the United States, “we saw a smaller percentage of those value-added programs in our sales,” he said.
Rob Wedin and Michael Angelo of Calavo Growers Inc. in an avocado grove in Santa Paula, CA.“This year, that has not been the case,” Mr. Wedin said July 25. After a volume decline in 2011, California again has a larger crop this year, and the aggregate volume consumed in the United States from all producing areas will soar to a new high. And “as our sales have been increasing,” there have been proportional increases in Calavo’s value-added programs, “so that has been very positive.”
Looking at “the big picture” for the industry, “we are two-thirds of the way through” the 2012 season, and there is a 20 percent increase in volume this year, compared to 2011, “so it definitely has been a growth year,” Mr. Wedin said. It is also a 10 percent increase over the previous record year of 2010 in terms of total avocado availability in the United States.
Remarkably, along with that volume growth has come “a 10 percent increase in price,” he said. “We are increasing both volume and price, so that reflects that demand [for] and popularity of avocados are continuing to grow, even in a challenging economy.”
However, “it hasn’t all been smooth,” he said. “We went through an oversupply of small fruit in April and May, and now we have, it seems, an oversupply of large fruit this past month or so” and a shortage of smaller sizes.
Those are temporary situations. “It just takes time for the market to reorganize itself” and adjust to the opportunities offered by the abundance of certain sizes.
“We have definitely been getting more interest” recently in some of the larger sizes “than we were just three or four weeks ago,” Mr. Wedin said. Customers are showing more willingness to change sizes than they were.
Some customers are more willing than others. Retailers tend to be “a little more set in their ways these days” and can be reluctant to change their size specifications. “But avocados are a profitable item,” so when opportunities arise, “they are willing to reorganize their strategies to take advantage of the value that is out there, whether it is small fruit sometimes and big fruit other times.”
The 2012 season has been and will continue to be “much different than last year,” Mr. Wedin said. As of mid-August, “we are going to still have 25 percent of our crop to go in California,” whereas in 2010 the short California crop was nearly wrapped up by that date. This year, “we expect a significantly later California crop than in 2011, much more like 2010.” In addition, “we expect an earlier and larger crop from Mexico.” Therefore, he expects to see “much more action” during the fall period “than it has tended to have” in some years.
Calavo planned to start harvesting new-crop avocados in Mexico the week of July 30. “We expect an earlier and larger crop from Mexico” than in 2011, he said. “We will start kind of slow,” but by the end of September, imports from Mexico will be going strong, and Chilean imports will be starting.
Meanwhile the California harvest will still be going strong. “California’s got a good sized crop” that will continue strong into October, much later than last year.