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Del Rey expanding its options for customers

By
Tim Linden

As June dawns, Del Rey Avocado Co. has added the Peru fruit to its avocado line-up and is also offering more bags and other value-added options for its customers.

Bob Lucy, president of the company with its offices in Fallbrook, CA, and its modern packing shed in nearby Vista, said the avocado-centric firm's first Peruvian fruit was expected the first week of June and will carry it into September. He expects July and August to be the sweet spot for Peruvian avocados this year as Mexico’s production starts to diminish in June and California has a crop about 30 percent less than 2020.

Speaking of the overall market, Lucy said June could be a bit of a challenge in terms of market price as Mexico is still sending a lot of fruit to the U.S. market. “But July and August should be really good,” he added.

Lucy said the key to the Peruvian deal is “to make sure you have a home for the fruit that you are bringing in.”

He said this is especially true for the organic avocado category. He noted there are a handful of U.S.-based avocado suppliers, including Del Rey, that are established players and are year-round sellers of organic avocados to the market place. There are also seasonal avocado importers that bring in smaller volumes and just can’t sell them, which ends up depressing the market.

Lucy said that means a reduced price and an unstable market. He reiterated that working with established distributors is the best option.

To make sure it has the options buyers want, Del Rey has increased its ripening room and bagging capacity at its forward distribution center in Philadelphia. COVID-19 prevented Lucy from seeing those improvements, but he recently made his first trip to the facility in more than a year and is excited about the increased capacity that will allow it to ripen more fruit and offer more bagged fruit. Bagged avocados have been on the increase for the past several years and that category saw an additional spike during the COVID-influenced marketing strategies of the past 15 months. The Del Rey executive said there is no sign of easing of this trend, which is great for consumers, retailers and avocado producers. A bagged sale increases the ring at checkout and puts more avocados on the consumer’s kitchen counter.

Del Rey has also increased its capacity for treating avocados with shelf-extending Apeel. Lucy said the treatment tends to give avocados at least an additional five to seven days of shelf life. It is a relatively expensive value-added service, but Del Rey is happy to offer it to customers willing to pay for it.

While he believes in Apeel and knows it works well and truly offers the extended shelf life, Lucy said some customers have a very sophisticated supply-chain system that results in little shrinkage. For the customer, it is just a math equation to determine if the increased cost justifies the extended shelf life.

Lucy noted that the value tends to express itself when the avocado f.o.b. price is high. He said there is some potential for organic avocados, especially as the sales volume of that category increases.

Del Rey has long been one of the last suppliers of California avocados in late summer/early fall as it has a robust deal in the most northern avocado producing region of Morro Bay. It markets many of those avocados under a Morro Bay brand and sold the fruit into November last year.

This year, having Morro Bay fruit late into the season will be a challenge. There was a heat storm that burst through the area during the Labor Day weekend of 2020 causing extensive fruit drop and reducing the size of this year’s crop. In addition, California has a short crop and growers have received solid grove prices for their fruit all season. Many growers will no doubt put their own numbers to paper and determine if it makes sense to keep the fruit on the trees an extra couple of months when the current market for California is so good and should be even better in August and September. Lucy expects the Morro Bay season will not last into November, and October will also see less fruit than 2020.

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June 18, 2021

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