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Organic avocados remain a growth item

By
Tim Linden

Avocados have been on an unparalleled growth curve for the past two decades, with continued increases forecast for the future. Supplies of organic avocados have mirrored that growth and should also continue to increase.

At least that is the view of Patrick Lucy, vice president of sales for Fallbrook, CA-based Del Rey Avocado Co., one of the top suppliers of organic avocados from multiple points of origin. He said the organic category has experienced continued growth through this challenging year dominated by the coronavirus. “Demand has been very good all year,” he said. “With COVID-19, there are more people trying to eat healthy and consumption of organics goes hand in hand with that concept.”

He said bagged organic avocados have done exceptionally well. That follows a trend that virtually all sellers of fresh produce have noted this past year as consumers are apparently drawn to the touch-free concept of bagged produce rather than bulk displays as they navigate their concerns about catching COVID-19. Buying bagged organic avocados, which typically contain four or five pieces of fruit, has the added advantage of increasing the per visit buy. Lucy said the increased demand, and the accompanying premium farmgate price versus conventional fruit, is fueling the increased planting of organic avocados and the transitioning of groves from conventional to organic growing practices.

Lucy said this is true in both California and Mexico but especially true in Peru. That South American country has seen its overall avocado acreage increase significantly over the last decade, with new plantings still going in. These young trees are coming into full production and many of them are in the organic category. “Peru has a lot of organic acreage of young trees which are producing large pieces of fruit,” he said.

Combined with increased plantings in California and Mexico, Lucy sees significant growth in organic supplies in the coming years. That’s great news for consumers, who are getting a preview currently of what strong supplies mean at retail. Avocado supplies were plentiful during the last couple of months of 2020 and there have been even greater supplies the first few weeks of January. This has meant consistent f.o.b. pricing in the mid-$20s for conventional fruit with organic avocados returning an f.o.b. price in the low $30s. These prices are at least $10 less than what they were a year ago and about $20 less than what shippers and growers have come to expect during strong marketing periods.

Lucy said the result is many promotional opportunities for retailers. “Right now we are looking at historically low prices,” he said, in mid-January, noting that Mexico has a solid crop of organic avocados with California fruit expecting to join the party in February and Peru augmenting supplies when it begins its shipments to the United States in May. “I believe we will see promotional opportunities on organic avocados from now into August,” Lucy said. “There should be plenty of fruit.”

While California’s crop has been forecast at about 25 percent less volume than in 2020, there is still expected to be good supplies from March through July, with some size picking in February offering limited volume. Mexico is in the middle of a robust crop and Peru can adjust its shipments to the United States to meet demand during the summer. Lucy added that with less fruit on most California avocado trees, solid rain over the next couple of months can help size the fruit, which ultimately gives the growers more pounds to sell.

Lucy expects the growth in bagged business to continue for organic avocados as it is a win win/win for the suppliers, retailer and consumer.

 

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