Skip to main content

- Advertisement -

Diversification is key to avocado category growth

By
John Groh

Avocados are among the most popular commodities in the produce department, yet for all their popularity the category has remained essentially flat for the last five years despite tens of millions of dollars invested in promoting the fruit.

Why? For many, the feeling is that category growth is largely dependent on the diversification of supply to meet rising demand.

Xavier Equihua, president and chief executive officer of the Peruvian Avocado Commission, said Peru is expected to have an “on” year in 2025 and could potentially export up to 260 million pounds of avocados to the U.S. market in 2025.

“This will help retailers diversity their avocado offerings while helping a somewhat static category grow, or at the very least maintain the 2.7 billion to 2.8 billion pounds we have had in the market for the past five years,” said Equihua.

Avocado volumes in the United States from all origins have remained relatively static for the last five years despite tens of millions of dollars being invested into promoting the category. Many in the avocado industry believe a diversified supply can help stabilize prices and move more fruit.
Avocado volumes in the United States from all origins have remained
relatively static for the last five years despite tens of millions of dollars
being invested into promoting the category. Many in the avocado industry
believe a diversified supply can help stabilize prices and move more fruit.

“Growth in the total avocado category has been stagnant for the last four to five years, and that is due to not enough supply,” said Luke Sears, president of LGS Specialty Sales, based in New Rochelle, NY. “Positive growth of the category cannot be realized until the market has sufficient volume, which will hold prices in check and help boost consumption.”

Mission Produce, a leading avocado grower-shipper-importer, based in Oxnard, CA, sources avocados from more than 15 origins to supply customers in 25 separate countries, according to Brooke Becker, senior vice president of sales.

“A diversified sourcing strategy is imperative to a reliable, year-round supply of high-quality avocados,” said Becker. “At any given moment we are sourcing from two or more countries to fill consumer programs.

“The more sources, the more options,” Becker continued. “The diversification of our supply is why our customers can count on us year-round. By bringing more origins into the mix, we can better mitigate the risk of supply shortages and reduce the impact of challenges related to weather, trade or other factors.”

Peter Shore, vice president of product management at Calavo Growers, based in Santa Paula, CA, agreed that avocado category growth in the United States has been held back by lack of supply.

“U.S. consumers are demanding more avocados, but supply has been challenged, primarily by weather,” he said. “Drought or excessive heat have affected California, Mexico and Peru during recent years. With good weather and optimal growing conditions, more production will come naturally.”

He added that alternate sources will help the category grow and add stability in the form of consistency in supply.

“U.S. consumer demand exceeds supply, and calibrated growth and programs will expand the category,” said Shore.

Rob Ybarra, director of sales at Villita Avocados, based in Pharr, TX, concurs.

“Avocados have tremendous growth potential because they check off all the boxes – they taste good and they are good for you,” he said. “But consumers are starting to buy based on what they can afford. Diversification brings more units to the market, which will keep prices in check.”

Ybarra, who spent 40 years in retail before coming over to the supply side five years ago, said the concept mirrors the challenge he faced in his previous role.

“As a retailer, we always wanted to know what the customer count was, especially on a year-over-year basis,” he said. “If that number was up, it was a telltale sign of growth. The same is true for avocados.”

Carson McDaniel, vice president of McDaniel Fruit in Fallbrook, CA, agreed that a diverse supply is the key to growing the category, but he emphasized the importance of providing a good eating experience.

“Responsible diversification of supply is vital for the growth of the category, but equally important is the need for the industry to meet the demands of the U.S. consumer base, and that means having high-flavor, high-quality avocados 365 days per year,” he said.

Peru’s role in diversification
With its season running primarily in the Northern Hemisphere summer, Peru plays a key role in enabling importers to diversify their lineup.

“Peru is a crucial supply source during this time of year as volumes from Mexico are typically reduced in the summer and a large portion of U.S. demand is supplied by California, Peru and Colombia,” said McDaniel.

Isabel Tavera, chief executive officer of Pacific Produce LLC, said that since Peru’s avocado crop comes on when other origins are in periods of lower volume, it helps the company meet commitments to its retail customers.

“With Peru, we can meet retailers’ needs for top quality and good sizing when no other origin can do the same during this time of the year,” she said. “It’s a win-win-win situation because the stability we can offer is good for importers, customers and retailers alike.”

In fact, Tavera said Pacific Produce will be leaning on Peru even more in the future to help service its retail accounts. She said the company is looking to add 600 hectares to its existing 1,400 hectares it currently maintains in the country.

“These new orchards will be in Ica in the south of Peru and they will allow us to extend our shipments into October,” she said.

‘Three-legged stool’
While adequate supply is a key to grow the category, there are other factors that will help drive growth.

Sears of LGS said promotions are extremely important, and the avocado category promotes like no other category, calling the amount spent on promotions “unique” compared to other commodities.

He added that promoting is “a three-legged stool,” where you need adequate supply, good pricing and effective promotions. “All those need to be in place to drive consumption.”

Those comments were echoed by McDaniel, who reiterated that promotions are essential to spur growth.

“Both the Hass Avocado Board and the country-specific member organizations have done a phenomenal job of promoting avocados to U.S. consumers,” said McDaniel. “Consistency in quality and availability, supported by strong trade marketing efforts, are crucial to increasing per-capita consumption and bringing new consumers to the base.”

Mission’s Becker pointed out that consumption levels and opportunity for growth vary depending on region.

“There is substantial opportunity to grow the category on a regional basis,” she said. “While [per capita] consumption in the West is reaching 13 pounds, consumption in the Northeast is about half that, at seven pounds.”

She said that in these under-indexed markets, retailers can focus on ripeness, menu inspiration, healthy benefits and sports-driven promotions to unlock revenue opportunities and capture their fair share of U.S. avocado sales.

“We’re living in a social media age, and most promotions incorporate that as part of the strategy,” noted Ybarra. “It helps put avocados in the forefront of consumers’ minds, and the more we can do that and educate them about the health benefits of avocados, the more we will sell.”

Quality is king
Of course, there could be an abundant supply of fruit but if quality is subpar, even award-winning promotions will fall short of increasing demand and growing the category.

Diversification can help maintain the necessary quality standards, since different origins offer peak shipping periods when sizing and oil content are optimal. But importers note that proper handling is crucial to maintaining top quality as the fruit moves through the supply chain.

“Thanks to our vertically integrated operations, Mission is able to offer unmatched quality control from field to fork,” said Becker. “By owning the cultivation, the harvest and the post-harvest handling of our fruit, we can care for each piece of fruit with consistency and integrity. This includes innovative practices like in-field hydrocooling, which helps extend shelf life and preserve fruit quality during transit.”

“Bringing good fruit to market requires everyone in the supply chain to do the right thing,” said Sears. “This includes importers and retailers working together and pre-conditioning the fruit to make sure it reaches the consumer in good condition for a superior eating experience.”

McDaniel noted that Peru has gone through a maturation process as an avocado origin and growers have gained more experience in supplying the U.S. market.

“The early days were a learning curve and there were a lot of growers trying to get their feet wet,” he said. “Now, quality is the number one priority since a bad piece of fruit can turn a consumer off in an instant and it’s so difficult to get a customer back once they leave.”

Tavera of Pacific Produce agreed, noting that growers in Peru had been accustomed to supplying Europe prior to the U.S. market opening in 2010, and had to learn the preferences of the U.S. market.

“U.S. consumers prefer sizes 40-48 with a higher oil content, so growers are now very calculated with their harvest schedules, picking for U.S. clients only when sizing is optimal and oil content is high,” she said. “The higher oil content also helps protect the fruit during the cooling process, so good eating quality is there when the fruit arrives at U.S. supermarkets.”

John Groh

John Groh

About John Groh  |  email

John Groh graduated from the University of San Diego in 1989 with a bachelors of arts degree in English. Following a brief stint as a sportswriter covering the New York Giants football team, he joined The Produce News in 1995 as an assistant editor and worked his way up the ranks, becoming publisher in 2006. He and his wife, Mary Anne, live in northern New Jersey in the suburbs of New York City.

 

Tagged in:

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -