Skip to main content

- Advertisement -

Avocados perform well during pandemic with record shipments

By
Tim Linden

By every measure, 2020 has been a very challenging year so far, but the avocado is emerging relatively unscathed, seemingly deserving of the descriptor that it is “pandemic proof.”

That was the description used by Xavier Equihua, chief executive officer and president of the Peruvian Avocado Commission. “There was a lot of uncertainty with the pandemic, but avocados proved they are pandemic proof,” he said of their performance this year. “No other produce item has the versatility, flavor, health benefits and sex appeal of the avocado, making them the star of the produce aisle. They have become the healthy comfort food that people have been turning to more and more.”

He said all of these factors led to a strong performance by the avocado, which was further highlighted by the fact that a significant portion of the market was eliminated with the decimation of the foodservice segment due to the pandemic.

Rob Wedin, executive vice president of fresh sales for Calavo Growers Inc. in Santa Paula, CA, revealed that the company’s avocado foodservice business is at less than 30 percent of normal, yet avocado sales have remained strong throughout. “It’s really amazing,” he said. “We have done well both price-wise and volume-wise despite that. We are the envy of a lot of other industries.”

Emiliano Escobedo, executive director of the Hass Avocado Board, agreed. He said given the circumstances of operating during a pandemic with the loss of foodservice business, the fact that the industry is on pace to reach its volume expectation is quite amazing. He revealed that sales dipped in April, but in terms of both volume and dollars there was a significant increase in Q2 2020 (April, May, June), which has led to the avocado enjoying year-over-year growth in sales and dollars.

Using retail scan data available through IRI, Escobedo noted that there was a 21 percent increase in dollar sales and a 24 percent increase in volume at retail during the first half of this year. These very strong numbers seem to show that consumers converted their eating-out consumption of avocados to eating-in occasions. Escobedo reminded that not all foodservice sales were lost, noting that fast food establishments, such as Chipotle, reported tremendous sales during the pandemic, “and they purchase a lot of avocados,” he said.

HAB serves as an aggregator of industry information and the numbers the organization has collected from point-of-origin avocado organizations indicate that the industry is on tap to sell in the neighborhood of 2.75 billion pounds of avocados in the United States this year. The information on the HAB website projects sales of almost 2.7 billion pounds during 2020, which does not include organic production. If this comes to pass after the final quarter of 2020 is tallied, it will represent about a 6.5 percent volume gain.

What will 2021 bring?

Though much is unknown about 2021 concerning the economy, the pandemic, the reopening of all foodservice sectors and the return of events and activities, HAB is budgeting for another year in which about 2.7 billion pounds will be sold in the United States.

Escobedo framed that prediction by reiterating there is a lot that is just not known. He said avocado consumption is often centered on activities such as the Super Bowl, March Madness basketball games and Cinco de Mayo restaurant events. Will they occur in 2021?

The supply side is another unknown. California growers were talking about a 350 million-pound crop for 2021 until heat waves took a toll in August and September. Wedin said growers are now looking at their trees once again and re-estimating how much fruit is on them. He indicated that the 350 million-pound number may be a stretch, and noted that Mexico’s crop year runs from July 1 to June 30. So, while Mexico’s producers have estimated a robust crop for fiscal 2021, there won’t be any indication about the second half of calendar 2021 until late spring next year.

Equihua said it is a difficult proposition to predict in October what Peru, or any country, will produce the following year. “Trees grow fruit,” he said. “We’re not talking about factories producing M&Ms.”

Yet he said that Peru does have many young trees and it appears on track to produce 880 million pounds in 2021, with an estimated 220-230 million pounds shipped to the U.S. market. He did caution that this is a very early projection, but if it comes to pass it would represent a greater than 20 percent increase over 2020.

The Peruvian avocado industry representative believes that it is increased shipments from Peru and other potential points of origin that are needed to grow the U.S. market. While others look at U.S. avocado sales and hold it out as a huge success story over the past 15-20 years, he takes a narrower time frame and sees stagnation. There was virtually no volume growth from 2018 to 2019, and the estimates he points to predict fewer than 2.7 billion pounds of consumption in 2020. From 2015 through 2020’s projected sales, the U.S. market will have registered about a 23 percent increase in volume.

Equihua believes that the sales should have already reached 3 billion pounds in the United States, and further growth will only happen if more supplies are made available to the U.S. market.

He said Peru could be a significant contributor at the front end of its season if U.S. consumption were to grow. This year, the bulk of shipments came during a 12-week window in June, July and August. Peru ships much heavier volume to Europe in April and May, and Equihua believes that if the U.S. had increased consumption, Peru could be a significant player in the spring as well as the summer.

Equihua, who is also CEO of the more Europe-focused World Avocado Organization, said the EU has continued to realize significant growth gains with a much smaller promotion budget. In fact, European avocado sales have more than doubled in the last five years.

Escobedo sees solid growth and great potential for the future. He said avocado penetration in the United States is at 64 percent of households with half of those households identified as heavy or super heavy users. Those households consume about 90 percent of U.S. sales at retail. That means that 66 percent of the population only consumes about 10 percent of the retail sales. He said that for continued growth there needs to be more promotion in the U.S. market, converting each user to a higher level of consumption.

Tagged in:

- Advertisement -

January 21, 2021

The Wall Street Journal's Global Food Forum next meets on Tuesday, February 9, gathering leaders in agribusiness, food production, consumer products, economics and government to focus on how the… Read More

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -

- Advertisement -