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Index Fresh continues customer-focused strategy

In 2018, Index Fresh opened a new distribution facility in the Rio Grande Valley of Texas for the express reason of better serving its customer. The facility greatly increased the company’s ripening, bagging and repacking capabilities, which has allowed it to increase production of the packs its customers want.

Index Fresh President Dana Thomas told The Produce News in late February that this desire to “focus on our customers” is driving decision-making at the California-based, grower-owned company.

Over the last several months, the firm has announced several promotions in its management team, which were driven by the same concept. Santiago Pacheco is the company’s new vice president of operations, while Manrique Palacios has moved from Texas and is now in charge of the California distribution facility. In turn, Juan Valdez was promoted to be in charge of the Pharr, TX, operation.

“All of these moves allow us to be much more focused on the customers at the operations level,” Thomas said.

The main part of that focus involves getting fresh avocados to its customers — and ultimately the consumer — in the best and most efficient way possible. The Texas facility, in conjunction with Index’s California headquarters and its other forward-distribution centers, allows the vast majority of Index’s customers to be less than a half-day’s trip from a ripening facility. This is important for the company, which sources from many different points of origin.

Over the next several months, Mexico will be the source of most of its avocados, with California fruit not expected to be marketed in significant tonnage until late spring and into summer.

Index also represents significant volume from Peru, with Thomas expecting that fruit to marketed from the end of May into September. “Peru is a large and important part of what we do,” he said, noting that Index’s volume from that South American country will be greater this year.

The volume from California, on the other hand, will be less as California has one of the smaller crops it has had in decades. However, Thomas said that decreased volume belies its importance.

“California is no longer our largest source of supplies, but it is extremely important to us,” he said. “After all, we are owned by California growers.”

Because of the total California volume — estimated at only 175 million pounds for 2019 — experts have predicted that almost all of the production will stay very close to home. California consumes more avocados than any other state in the nation, and this year the state’s production by itself could not possibly fill the demand.

Thomas said most of Index’s California fruit will be marketed in the state but he added that Index has some out-of-state customers partial to California fruit that will get their fair share.

Part of that California production consists of Gem variety of the fruit. While the Hass avocado is king in California and around the world, Thomas said Gem is a “really good variety with a lot of good attributes and good appearance.”

He said it is rounder than the Hass and has a bright green color, which darkens as it ripens, just like a Hass.

“We target market it and see it as a way to expand the avocado category. We think it is an exciting opportunity. It’s a little bit like having a craft beer,” he said, noting that it can be marketed as a niche item.

Overall, Thomas remains extremely bullish about the avocado category as it continues to register significant growth year-over-year when the crop volume cooperates.

“At this point, we don’t see that there is an end to increasing demand,” he said. “Look at the numbers of those who buy avocados. There is still a lot of room for growth.”

He said about two-thirds of consumers buy avocados and the majority of purchases are in the hands of heavy users who buy four to five avocados per week. There are many others who like — or even love — the fruit but haven’t moved past buying one or week or only being an occasional purchaser. There is much opportunity to move these into the moderate or heavy user category and subsequently expand sales.

He said the huge increase in demand for bagged fruit is having the impact of growing the category as the bag purchase instantly creates a multiple-avocado-per-week user.

Additionally, consumption of avocados in Europe and Asia is also on the rise. “South American has also been growing. We think [worldwide] demand is going to continue to increase,” Thomas said.

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