Peruvian avocado demand increasing
Peruvian avocado demand increasing
By all accounts, the Peruvian avocado industry has had a very good season exporting avocados to the United States and elsewhere, and the group’s top U.S. representatives believe it is a harbinger of things to come.
“The question for the future is how are we going to keep with demand,” said Xavier Equihua, president and chief executive officer of the Peruvian Avocado Commission.
He said the marketing of avocados has truly become a global endeavor with consumption increasing faster than production on many different fronts. U.S. consumption is expected to top 2 billion pounds in 2015 with Europe consuming about half that much. Equihua expects consumption in both of these major markets to double in the foreseeable future. And he said Asia, particularly China, is a total unknown that could move demand off the charts.
In the summer of 2014, Peruvian exporters sent many more avocados to the U.S. market than they had the year before. The result was an unsettled market that did produce some lower prices. This summer a totally different picture has been painted.
In mid-July, Equihua said high demand from the European market was the chief reason that exports to the United States were less than expected. With about a month left for Peruvian imports, he estimated the total volume sent to the United States this year will be roughly 120 million pounds. At the beginning of the season, estimates were that closer to 200 million pounds would be sent to the U.S. market.
The Peruvian Avocado Commission executive said Peru is the No. 1 supplier to the European market so as that demand increased this year, Peruvian exporters filled the gap. He noted that the 1 billion pounds of consumption in Europe is happening with virtually no promotion. “Peru has proposed the establishment of an inter-European promotion program," he said. "It is currently under discussion, but with promotion, I believe Europe would be a two billion pound market very quickly.”
Equihua said a 40 million euro promotion program could definitely move the consumption needle very quickly. He reiterated that even though Peru’s production is expanding quickly as young trees mature, the biggest challenge is keeping up with demand. “Avocados are the next tomato,” he said, referring to how widespread their consumption will be in his estimation.
He said 2015 has been a very good year for Peru because the crop was excellent in terms of quality, and his group led the way with regard to promotion in their core markets. He noted that the promotions were very well received by retailers. “Our core market is the East Coast and the South but we are also seeing Peruvian avocados in western markets. California does not have enough fruit to even fill California’s demand.”
He said domestic production will have an effect on some consumers, especially with the pushing of the locally grown angle, but again he said demand is increasing beyond the current ability to keep up. He clearly believes all avocado producers are going to continue to do quite well in the near future.
This summer he said Peru conducted a couple “waves of demos at Walmart” that resulted in huge sales. Over the Fourth of July, demos were conducted in 1,600 stores, and in mid-July another demo was set to include 1,000 stores. “We used radio advertising in 23 markets and we are holding an event at a New York baseball stadium this week (July 23) to promote the ‘avo-dog,’” he said July 21. “Right now we are driving the market.”
On that date, Equihua said Peruvian avocados will be shipped for about another month with some of the fruit marketed into September. But he said the volume on a weekly basis will drop significantly by mid-August.