West Pak expects strong volume from Peru
West Pak expects strong volume from Peru
If the avocado market remains strong — as it has been all year — Peruvian’s share may rise beyond current expectations, according to experts from West Pak Avocados Inc. in Murrieta, CA.
Kellen Newhouse, vice president of sourcing for the company, said that total volume is forecasted to be between 150 million and 175 million pounds this year, compared to 145 million pounds last year.
“But we may see an increase if the U.S. market stays strong and the euro stays weak,” he noted.
As of early June, the euro was trading at a rate of about $1.09, which is about 20 percent less than it was a year ago. Consequently, it takes more euros to buy avocados from Peru and creates a higher-priced item for the consumer. That tends to depress demand, which is why Peruvian exporters might send more fruit to the U.S. market if the demand is there.
Newhouse said the Peruvian fruit is mostly large fruit, with 48s and larger making up the bulk of the volume. But again, he said the weaker euro should mean an increase in smaller-sized fruit sent to the U.S. market. Europe has always preferred a smaller avocado and the expectation is that there will be more of the smaller fruit available this year for U.S. export if Europe’s demand decreases.
The West Pak executive said his firm will be marketing Peruvian avocados into September. He expects tiered pricing with a gap between what the Peruvian fruit commands compared to California fruit, but he believes that gap will be narrower than in prior years.
“Peruvian fruit quality is good and it is gaining market acceptance with larger retailers and foodservice, which will help keep the market velocity,” he predicted.
Newhouse said Peru is a key part of West Pak’s program. “With California ending early and the Mexican ‘Flora Loca’ crop starting in July, we will be depending on Peru as another quality supplier of avocados through the summer,” he said.
West Pak distributes fruit from Peru all over the United States but Newhouse said “we will see a higher percentage on the East Coast.”
The Peruvian fruit is packed in all types of containers, including lug boxes, flats, RPCs and bags.
“Every year Peru continues to improve its infrastructure and is able to handle more and more pack configurations,” he said.
Like other marketers, West Pak is encouraged by the strength of avocado movement this year. “Sales have been strong and the market continues to absorb a lot of volume,” said Newhouse. “If we do not hit 2 billion pounds [sold in the United States] this year, it will be next year. California looks to have a good set for next year. Mexico continues to grow and with the addition of Jalisco it will have more volume. Also with the devaluation of the euro, we should see increased volumes from Chile and Peru.”
West Pak is on the same growth trajectory, according to Newhouse.
“West Pak continues to grow,” he said. “We are expanding our [distribution center] network. This is something we are excited about and the news should come out very soon.”