There’s more to the fruit than just guacamole and avocado toast.
Originally printed in the April 2022 issue of Produce Business.
Avocados can do a lot for a supermarket, grocery or any food retailer, as their burgeoning popularity makes them an attention-getter in the produce department.
Of course, specific holidays are closely associated with avocado purchasing, such as the Super Bowl and Cinco de Mayo. Yet, having an everyday strategy to sell can pay dividends: Retailers who keep avocados prominent in merchandising and promotion can increase register rings year-round.
For many retailers in the foremost avocado sales regions along the southern tier of the United States, promotions and merchandising focus not simply on bulk sales, but also on elevating the avocado assortment to suit the tastes of consumers who are especially discriminating.
On the West Coast, at Lazy Acres Natural Market, Santa Barbara, CA, avocados are a major consideration and the operation takes a specific approach to presentation.
“We only sell the largest size of organic avocados that we can get our hands on at any given time,” says Lazy Acres Produce Director Scott Wiggans. “We are not at all focused on price; we just want to offer the biggest and highest fat content avocado we can get our hands on.”
The market, which also sells small organic avocados in a four-count bag, pushes avocados in the lobby and in huge displays when it runs them on ad for the Super Bowl and Cinco de Mayo.
For its part, Freshfields Farm, with supermarkets in Orlando and Jacksonville, FL, sees the Super Bowl as a huge opportunity to feature and launch its avocado business into each new year, given that it sells millions of pieces of fruit to customers getting ready for the big game.
An experiential retailer, Freshfields Farm wants everything it does to have a superior position and an enticing proposition to customers, so it only sells ripe avocado, says David DeLoach, chief executive.
Consumers expect to be able to go home and make guacamole, and if they can’t, the store loses an opportunity, and that goes against an approach that emphasizes the immediate satisfaction it can provide shoppers, he explains. So, avocado becomes something of a standard bearer and a way to maximize the return on each customer shopping trip. If an avocado isn’t ready to eat, then customers aren’t necessarily going to purchase, and “they’re probably not going to think of avocado for five or six days,” he says.
Avocados have increasingly shifted into a more mainstream market position, and represent an opportunity that still is growing.
“There’s been a boom in avocado consumption in the U.S., as per capita consumption has increased 88% in the past 10 years,” says Peter Shore, director, business development and marketing, Calavo Growers, Santa Paula, CA. “Avocado category growth is definitely there. Our per capita consumption in the U.S. is around 8 pounds per person, and consumers are looking for more ways to incorporate avocados into their diets.”
Citing a study from market researcher Numerator, Denise Junqueiro, vice president of marketing and communications for Mission Produce, Oxnard, CA, adds, “The household penetration of avocados has increased across all ethnic and age groups in the last five years.”
Phil Henry, owner of Henry Avocado Corp., Escondido, CA, says the COVID-19 pandemic brought a slump in foodservice sales of the fruit, partially mitigated by a rise in supermarket sales. Restaurant sales were on a roller coaster through the pandemic, tumbling in March of 2020, then gradually coming back, before crashing again as new COVID-19 variants roiled the market. With the Omicron variant fading from the scene, restaurants are fully coming back and that’s given avocados another lift.
“We’re seeing more openings taking place,” Henry says.
Although temporary issues regarding security of field inspectors blocked importation from Mexico briefly earlier this year, that’s over and the critical cross-border supply into the U.S. is flowing to satisfy growing demand. The ban was a temporary setback.
“Supply was limited and it took several weeks to fill up the supply chain,” Shore says. “Once the ban was lifted, growers and packers quickly responded with good harvest volume.”
The ban had a limited effect on avocado sales in part because of its timing. It was imposed too late to affect Super Bowl sales and ended before the big push for March Madness, says Maggie Bezart-Hall, senior director, strategic sales and marketing at La Bonanza Avocados, Uruapan, Mexico. Retailers continued to promote in March and were looking for April ad commitments.
“Stoppage of supply is never good for the growers and packers and their employees,” she says. “Many peoples’ livelihoods depend on the work that they do for our companies. The ban happened after all the fruit had been shipped for Super Bowl. There was stoppage for a week, and it took another week to completely fill the pipeline.”
The ban isn’t likely to change U.S. consumers’ enthusiasm for avocados.
“U.S. consumers’ love for avocados has led the country to be the No. 1 importer of avocados in the world,” says Alfonso Delgado, associate director of trade marketing, Avocados From Mexico (AFM), Irving, TX. “Avocados provide so many benefits to shoppers: They are delicious, versatile and full of good fats and nearly 20 vitamins and minerals.”
He added that the avocado is second in growth across the U.S. produce category for the year ending Aug. 14, 2021, according to Nielsen.
La Bonanza Avocados, as with many growers in Mexico, continues to expand capacity.
“The growth of consumption is directly related to the year-round supply of avocados in the U.S.,” Bezart-Hall says, adding La Bonanza continues to plant additional hectares each year. “Our planting in higher elevations will allow for additional high-quality Mexican avocados in the summer. Jalisco will also start exporting to the U.S. this summer.”
BIGGER IS BETTER
When it comes to major avocado events such as Super Bowl and Cinco de Mayo, retailers can benefit from high profile avocado presentations beyond what consumers typically see.
Shore recommends retailers consider “large multiple displays offering several opportunities to buy in the store, offering extra large fruit, large or medium fruit and bags, as well as organics.”
According to Junqueiro, preparation for major avocado selling events should start early.
“In anticipation of holidays and other large events, we recommend retailers start promoting bags two weeks ahead of time and bulk fruit one week ahead, in order to give shoppers an opportunity to stock up and ripen the fruit,” she says.
“Ripe avocados outsell hard green fruit. Consumers are looking for something to eat today, tomorrow and the next day.”
The main summer holidays — Memorial Day, Fourth of July and Labor Day — are avocado opportunities, not only in guacamole form but also as extras for appetizers, salads, sandwiches and burgers.
Retailers are also recognizing that everyday promotion is a prominent driver of growth among consumers who want to do more with avocado as an ingredient and seek choices for different applications.
“Key to promotion is offering multiple SKUs at store level,” Shore says, “offering promotions in multiples.”
Including ripe fruit in product displays is a more important part of avocado merchandising than ever. Many consumers understand ripening in general and can apply their understanding to the ripening of avocados. Some don’t. Some get annoyed when they get it wrong and have to throw away avocados gone bad. Some are simply impulse purchasers who will only buy avocados that are ready to eat.
“Having ripe makes sense for retailers,” Henry Avocado Corp.’s Henry says. “Retailers should offer at least some ripened avocados in their displays. We find that, by offering fresh avocados, retailers increase sales and even can decrease shrink.”
Today, ripe fruit is only getting more popular.
“Ripe avocados outsell hard green fruit. Consumers are looking for something to eat today, tomorrow and the next day,” Shore says. “Stage 3 is great for everyday retail. Stage 4 is good for promotion or special avocado events or holidays.”
Properly ripened fruit can propel success in the avocado category.
“In a Mission Produce Avocado Intel survey, we found that fruit ripeness and firmness were two of the most important factors in the consumer’s decision to purchase,” Junqueiro says.
Mission research also demonstrated, “44% of shoppers look for fruit that is ready to eat in two to three days, while 23% are looking for fruit to eat the same day.”
“Our avocado-specific ripening infrastructure allows us to create custom avocado programs tailored to the specific needs of our customers,” Junqueiro adds. “We set our customers up to meet the needs and expectations of the consumer so that neither are left guessing about ripeness.”
Offering fruit options make sense, says George Henderson, marketing manager, West Pak Avocados, Murrieta, CA. “Optimally, a retailer should offer a combination of avocado ripeness inventory. By offering this, a buyer is empowered to plan more effectively on usage and recipe planning throughout the week.”
Retailers may want to do more to help consumers successfully pick avocados on a consistent basis.
Although a common determinant, color is a dicey issue, Bezart-Hall says, because it’s not always consistent with ripeness and may be difficult for shoppers to use in purchase decisions. Rather, overall education about avocados is more important.
“Just Google avocado ripeness, and you will see over 6,230,000 hits. This means that there is still education needed, but consumers are getting more confident in when and how they are going to use avocados.”
Ripening avocados is a true skill, she adds. “Ripeners need to understand where the avocado is in the bloom cycle, as the further along in the bloom, the higher the oil content. The majority of avocados that we handle for retail are ripened to stage 2.5 to 3. Foodservice needs them to be slice ready at 3.5 to 4 for guacamole. Most club stores sell larger quantities in bags at a green stage with no triggering.”
“Consistency is key,” says Bezart-Hall, as to “multiple sizes, price points and quality, flavor and oil content.”
BAGGED OR BULK?
Retailers should also be considering how bagged products can enhance avocado sales.
“Last year, bagged sales grew 27.9%, and I foresee another impressive year of sales growth in 2022,” West Pak Avocados’ Henderson says. “Bagged avocados also provide branding dimensions that bulk product can’t offer.”
Bezart-Hall contends, “Bulk is still the bulk — no pun intended — of the retail sales and most all of foodservice.”
Still, she acknowledges, circumstances and retail store type play a role in what shoppers have to purchase.
“Club stores sell larger sizes in bags, where most retailers sell bulk and smaller sizes in bags. Mexico had less 48s and overall volume this year due to lack of rain last year; 60s and 70s have been in high demand for promotions.”
“Both bagged and bulk are important,” Shore says. “Bag volume growth has continued year over year for several years.”
AFM’s Delgado says bulk comes in at about 83% of avocado sales, with bagged coming in at about 17%, according to Nielsen figures for the 52 weeks ending Jan. 29. As the category continues to evolve for U.S. households, bulk and bag are both important, with bulk driving the base volume for the category.
Given the choice, he notes 74% of shoppers prefer to pick and bag their own avocados while 41% of shoppers will buy bagged avocado when available.
Delgado is among those who note that sales of bagged avocados accelerated significantly during the pandemic due to safety concerns and an inclination toward value. “Bags will continue to be important to the category as shoppers continue to look for value, which represents a unit-per-trip driver for retailers,” he says.
PRICE, MERCHANDISE TO SELL
Avocado pricing now is subject to a promotional calendar that has proven fairly effective in growing the fruit’s penetration in the U.S. market and consistent with supply.
“Retailers are very cyclical with advertising practices off and during promotions,” says Bezart-Hall. “This is good for supply, as it helps to move the volume during peaks and valleys. The key for our customers is consistent supply. Pricing structure is different with each country of origin as well as quality. We are very fortunate that fresh Hass avocados have a 100% distribution at retail. Foodservice carries both bulk fresh and bulk processed avocado/guacamole products for different operators.”
Cross-merchandising of avocados isn’t difficult to plan or execute because it’s largely based on ingredients and cooking tools that go with the key dishes that contribute to popular Mexican and Southwestern cooking.
“Many decades ago, avocados and tomatoes were suggested to get the avocados off the refrigerated case and to draw more attention to their perfect partnership,” Bezart-Hall says. “This partnership still stands true today.”
“For the novice guacamole maker, include guacamole-making spices or put your spice package rack at the end of the display. During peak avocado supplies where promotional pricing is available, build an additional end-cap display to give your sales a big boost for the department. Secondary displays are a great idea if there is commitment from the top for the added labor to care for the displays and keep them full.”
Many retailers have a place for prepared guacamole in the produce department, branded and/or store-produced, or in coolers immediately adjacent when they are available. As such, they promote convenience and impulse sales of avocados in whatever form the consumer prefers.
“A retailer told me any time people are gathered in front of a television set is a good opportunity for guacamole,” Henry Avocado Corp.’s Henry says.
Avocado promotion is about creating a complete experience, AFM’s Delgado says.
“The key to avocado promotion is to enhance the experience throughout the shopper’s journey, including promotional elements and purchase triggers during pre-shop, during-shop and post-shop,” he says. “Give shoppers options like a selection of ripeness, along with bulk and bag in-store availability. Featuring ‘Avocado Destination’ displays and providing recipe ideas and avocado education materials can also be helpful. Use traditional print circulars to feature avocados on the front page and leverage digital media capabilities that mirror in-store experience.”
Retailers should also consider the virtual store environment, given how e-commerce advanced in the COVID-19 pandemic. Sales may stabilize post-pandemic, but retailers should think about the opportunity to focus on click-and-collect, which is likely to remain attractive to consumers, Delgado says.
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The avocado shopper is evolving
Regional and demographic factors play into produce sales and should play into produce merchandising.
“Many regions in the U.S. have yet to develop their avocado categories to reach the level of consumption the industry sees on the West Coast and in the Mid-South. So, there is considerable potential for the growth of the avocado category nationwide,” says Denise Junqueiro, vice president of marketing and communications for Mission Produce, Oxnard, CA.
From a demographic standpoint, millennials are incorporating avocados into not only their own lifestyles, but also their children’s “and that develops an entirely new generation of avocado consumers,” Junqueiro says.
Alfonso Delgado, associate director of trade marketing, Avocados From Mexico (AFM), Irving, TX, says 32% of avocado grocery shoppers are baby boomers and 36% are Gen X’ers. Millennials make up 28%, citing figures from market research firm Numerator in the period from Aug. 4, 2020, to Aug. 22 2021.
The avocado shopper is evolving, says George Henderson, marketing manager, West Pak Avocados, Murrieta, CA. “The new, highly engaged shopper is known as the Ultra Avocado shopper. Ultra avocado households are the top spending segment and make up 8% of avocado buying households, spending on average $100 per household annually,” Henderson says.
Data demonstrates avocado popularity among Hispanic shoppers, and not just those from a Mexican background.
“An estimated 94% of Hispanics buy avocados and more than 50% buy them on a weekly basis,” Junqueiro says. “So, as the Hispanic population in the U.S. continues to increase in size and gain influence, avocados have an opportunity to grow in popularity as well.”
Alejandro Gavito, senior insights and data services manager, for the Hass Avocado Board, Mission Viejo, CA. Says the organization’s latest segmentation research indicated households have moved up the consumption ladder in the four years since the inaugural study. However, it also suggests potential growth avenues.
“For example, in 2020, the Ultra and Mega purchasing household segments individually made up 8% of avocado-purchasing households,” he says. “These households accounted for a disproportionately strong share of avocado purchases, 35% and 18%, respectively. These two groups only represent 16% of shoppers, but they buy 53% of avocados sold at retail. The incremental sales would be massive if we, as an industry, move the remaining 84% of shoppers up the consumption ladder by even a few percentage points.”
The Hass Avocado Board Long Term Avocado Purchase Trends study, which looks at high-purchasing demographics, says Hispanic shoppers are a high-value segment of the avocado category. This shopper group is more likely to purchase avocados than non-Hispanic households, and they purchase avocados more often, and spend more per trip.
However, Gavito says, “the growth in incremental avocado purchases from 2016 to 2019, plus $250 million, was driven by non-Hispanic households.” He adds non-Hispanic households represented 76% of long-term category growth over the past four years.
“This group comprises a much larger proportion of households and their purchase trends increased at a faster rate than Hispanic households,” he notes.
The board’s Millennial Study found millennial avocado purchase trips stood as more valuable to the retailer than non-millennial avocado purchase trips. The value of the millennial market basket was $77.28 when it included avocados, which was 16% higher than other sectors’ market baskets This was due to greater millennial spend on avocados and other items in the basket.
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Ready to eat today or later?
Consumers want all the choices
For many shoppers, the ability to pick avocados for today and for later is an important part of their shopping plans, says Alfonso Delgado, associate director of trade marketing, Avocados From Mexico (AFM), Irving, TX.
He cites an AFM Technomic A&U proprietary shopper journey study that found 84% of non-Hispanics and 81% of Hispanics state “the ability to select avocados ready to eat today/others to eat later” influences their purchase.
He adds 43% of non-Hispanic and 45% of Hispanic consumers say “having separate sections for ripe and unripe avocados” positively influences their purchase.
“This represents an opportunity for retailers to support a dual assortment of ripe avocados for now and unripe avocados for later supported by clear point of sale signage and merchandising solutions,” Delgado says.
“Not all shoppers are created equal,” adds Alejandro Gavito, senior insights and data services manager, for the Hass Avocado Board, Mission Viejo, CA.
Offering different options to consumers will result in incremental salesand different configurations or sizing options won’t cannibalize bulk sales, says Gavito. “Stores that provide multiple bulk sizes options, multiple bag counts and sizes, organic, green, and ripe will cater to more shoppers and gain chain loyalty.”
Although avocado popularity has increased just about everywhere in the United States, the Hass Avocado Board has developed different tools to help marketers and retailers understand retail dynamics and shopper preferences regionally and by market. Its Regional Composite Reports provide insights summarized in one-sentence headlines and by avocado versus total produce opportunity, as well as individually segmented quarters in addition to year-to-date sales, spotlight on key PLU drivers and at-a-glance regional sales per store comparisons.
“We also have an avocado category market development tool where marketers and retailers can learn what opportunities exist to grow sales of Hass avocados in even the largest avocado markets, Gavito says, “Where are the top opportunities to expand sales of bagged Hass avocados, and which market development strategies can help grow the category in each market?”