Calavo adjusting size profile on Peru avocados
For its 2021 Peruvian avocado season, Calavo Growers Inc., based in Santa Paula, CA, is expecting to handle about the same volume as it did in 2020, but with a much better size distribution.
“We’ve had many fruitful discussions with our suppliers in Peru,” said Rob Wedin, Calavo’s executive vice president of sales. “It’s a situation of learning more about our market and where U.S. demand resides.”
He added that many of the groves in Peru are maturing and naturally producing a size portfolio that is more diverse and skews a bit smaller, which is what the U.S. market likes. “Peru is doing what it can to grow volume,” he said, noting that one of the most important things they can do is send more 48-size avocados to the United States.
He said virtually 100 percent of the time, the 48-size avocado is the piece of fruit returning the highest price in the marketplace and tends to be the size that most retailers prefer. The sweet spot for U.S. sellers is in the 40- to 60-size range. Because of its young trees, over the past half dozen years Peru has shipped a significant volume of 36s, 32s, 28s and even 24s to the U.S. market.
“This year we are expecting to receive 24s to 60s during a 13- to 15-week season beginning the third week of June,” Wedin said, noting that their main grower’s production has been delayed a little bit because of colder weather in the geographical region in which he farms. “Our last arrival is expected in the middle of September.”
For Calavo, Wedin said the key to an excellent Peru avocado season is inventory control with a good size distribution so that good homes can be found for all the fruit. He noted that East Coast receivers typically take an avocado that skews a little bit larger while the retailers in the West like a 48- to 60-size for both bulk and bag displays. “We are going to try to keep it simple by selling more fruit in the best sizes.”
Commenting on Peru’s desire to grow marketshare and ship as much as 30 percent more fruit into the U.S. market, Wedin repeated that size profile is very important. “The market will resist too much large fruit,” he said, adding that the f.o.b. price will fall if the inventory for fruit in the 20s to 30s size range gets too high. “The market doesn’t want to pay — or can’t afford to pay — what growers need for 24s and 28s.”
He did say that the larger fruit is a natural for processors in Peru as it can yield a lot of substance. Calavo is working with its Peruvian grower to divert some of the larger sizes to other markets.
With regard to organic avocados, Wedin said there is a great opportunity for Peru’s organic growers this year to take part in what has been an excellent organic market in the United States this spring. For a couple of months, organic avocados have been selling for a $20 premium over conventional fruit as California has a much smaller organic crop in the same proportion of its decreased conventional production, and it is not expected to last through the summer. He did say that the organic market in the United States is looking for top quality product and if Peru can provide that, those packs will get a premium price.
While avocado prices have been good and movement has been solid this spring, Wedin said it has occurred without blow-out promotions by retailers. They are promoting but not at the kind of prices that tend to move fruit at record or near-record levels.