Over the course of the year, we pay tribute to 35 living Vanguards and 12 departed heroes. This month’s featured Vanguard is Alvaro Luque of Avocados from Mexico.
Originally printed in the September 2021 issue of Produce Business.
A brilliant marketer and out-of-the-box thinker, Alvaro Luque, President/CEO of Irving, TX-based Avocados From Mexico, built a brand in a brandless category and changed produce industry marketing paradigms. His audacious actions since he was recruited in January 2014, jolted AFM, reaping benefits that reverberate throughout the industry. He deftly set a new industry standard, competing on the marketing national stage with the top, multi-billion-dollar CPG companies in the country. He won broad national exposure with creative, bold consumer media strategies, and pushed boundaries on multiple fronts—galvanizing retail produce departments, plus infiltrating prime CPG merchandising real-estate, novel foodservice venues and, through digital platforms, triggering innovation and growth industry wide.
While increasing AFM market share from 60 to over 80 percent, he’s led the growth on U.S. avocado household penetration to more than 55 percent, and transformed AFM into the preferred avocado brand, increasing the preference by more than 250 percent. His inventive approach helped boost overall avocado consumption to 2.6 billion pounds a year and per capita consumption to over 8 pounds as of 2019.
Luque defines AFM’s purpose as having dual responsibilities; to develop a brand for avocados coming from Mexico, and to accelerate the volume and value of the category as a whole in the U.S. “My vision is to grow the avocado category, to be sure to capture our share of that growth, but if the other guys are healthy, I’m going to be healthy. I’m not going to create issues for the category, because the category needs to be healthy to grow.”
Luque developed this idea of a marketing plan that drives the whole category in volume but in value as well. “That is not very common. When you have a category that grows in volume so fast, at some point you start damaging value, but AFM hasn’t done that. By creating a strong brand in the minds of consumers, we’re going to hold the value for the future.”
When avocados became a USDA checkoff (research and promotion) program, it really changed a lot for this industry, he explains. That law forced importers to dedicate 2.5 cents per pound of avocados from any country in the world or produced here in the States to be used for marketing purposes.
With the opening of the U.S. market, Mexico had to organize all the growers and packers of Mexican avocados from Michoacán, which was the only state open for Mexico. About 30,000 growers and around 65 packing companies came together to create The Association of Avocado Exporting Producers and Packers of Mexico (APEAM). Then the U.S. needed to have a Mexican association of importers of avocados, and they created The Mexican Hass Avocado Importers Association (MHAIA), which holds 250 U.S. importers, packers, and distributors.
“These two associations started doing some marketing… the U.S. with the checkoff program, and Mexico with their own resources for about seven or eight years, marketing in the U.S. using the same brand, but not talking to each other. You had two campaigns running at the same time, and it was messy, until they decided to come together to form a non-profit marketing alliance through the USDA in 2013,” says Luque.
AFM now operates under one of the USDA Commodity Check Off Programs to promote the product of the labor of the two organizations in the U.S. Enjoining the funds from Mexico and the funds from the U.S. checkoff program, Luque fully capitalized on the charge to develop a single strategy and seamless campaign messaging. The program since 2013 has more than doubled. “When I started, the marketing budget was around the low $30 million. Now we are in the upper $60 million. The more we import, the more resources I have to create plans.”
SUPER STAGE PRESENCE
Born and raised in Costa Rica, Luque applied his 28 years of international marketing in consumer packaged goods and produce in Latin America and the U.S., previously at Gruma, owner of Mission Foods and Azteca Milling. “Being a marketer in CPG my whole life, it was a bit of a shock when AFM wanted to recruit me. I didn’t even know what type of produce marketing existed…” he says.
“I’m in love with this industry, but in terms of marketing and branding, I saw an opportunity to do something different and try to get the produce industry to compete against CPG. There are many people who think the produce industry can’t withstand these mega-budget onslaughts, but if you do it right, you can triumph over CPG or any other industry,” he says.
One of the biggest changes Luque brought to the category was to put the AFM brand and the category on a different stage. What better way to do that than becoming a Super Bowl advertiser — “long considered the biggest, broadest, most high-profile advertising opportunity for U.S. brands… This may sound like a lot for a little green fruit amidst a crowd of chips, beer, and cars, but AFM employed a perfect storm of attention-seeking advertising,” reported Fast Company of AFM’s cleverness to tactfully out-perform the giant CPG companies.
“I had less than six months on the job when I brought this idea to the board, and I was nervous. It was a big step to invest more than four million dollars for 30 seconds,” says Luque.
A first in the produce industry, AFM Super Bowl campaigns have won multiple accolades and media recognition for their unprecedented performance over the past six years and have generated a staggering 34 billion impressions for the brand. AFM was the number one digital campaign for the Super Bowl in 2018, and is the only advertiser to hold for five years in a row the number one or two spots in the best Super Bowl digital campaigns based on the Merkle Report.
“In the beginning, there was a lot of resistance because our clients and board members thought, ‘what exactly are we going to do at point of sale with beer and chips and soda and all these CPG guys?’” says Luque.
The strategy has been extremely successful. “We’ve placed more than 130,000 additional displays a year at point of sale at retailers across the country, and we’ve been able to capture more than 60 million dollars of additional shopper investment that have benefited our brands.”
Luque has formed retail partnerships to develop customized programs for chains including Walmart, Kroger, Albertson’s, Aldi, and Target, among others.
“We have a national partnership with Walmart, going on its fourth year, to address one of the main issues to fast-track growth of the whole category. We identified the biggest driver, health and wellness—the more people know about the good heart-healthy fats in avocados, the better for avocado sales. AFM has been able to reach millions of Walmart consumers in store, leveraging interactive chatbot technology, engaging shoppers in digital channel strips placed near avocado displays in the produce department with branded messages based off AFM’s proprietary consumer research, and it’s been so successful, other retailers have taken it on.”
To reinforce the value proposition in an industry squeezed by low margins, “we’ve been very selective on how we choose our main targets. This category has around 60 percent household penetration. If you wanted to grow the avocado market, the easy way out probably would be let’s go to the other 40 percent,” he explains. “If you look at those 60 percent, they’re consuming an average three avocados a month — you cannot even do a good guacamole with three avocados, so the opportunity of increasing that amount being purchased is huge.”
Luque is a big believer in research, not only in tracking shoppers, but also in foodservice to be sure that the things AFM is doing is moving the needle. This also includes the digital realm. The next frontier is mass personalization, says Luque, to deliver personalized messaging to millions of people at the same time. “Managing databases and doing the analyses can be complex, and results in hits and misses. We test with clients before we go out and shoot big. We’ve been creating our own ecosystem, some 54 million people that we reach out to with our partners, including an online avocado community to engage consumers in loyalty programs to sell more avocados.”
AFM had already increased investment in e-commerce, never expecting that COVID would change things so fast and aggressively in the market. E-commerce could become a very important driver of avocados in the future, Luque says, noting, “We’re more than tripling the investment in e-commerce this year, a big initiative. We’re trying to help our clients understand how important it is to deliver what is expected, solve problems selling produce online, and improve the shopper’s e-commerce experience.”
Through a partnership with Walmart and OneSpace, a digital product merchandising platform, AFM made important changes to Walmart’s e-commerce site for avocado purchases. “This year, we want to expand that to more players in the market and ensure that we are the ones driving the experience and not having to wait for the retailers to do this because they’re working on hundreds of categories at the same time.”
On the foodservice side, AFM created its own culinary center in Dallas, including an avocado university with a certification program to educate and train chefs and foodservice professionals on techniques, basic quality management, and food safety, etc. “We’ve extended the program to bring in universities, retail clients, registered dietitians. When the industry faced the COVID crisis, we moved fast to conduct the flexible, six-module course program in virtual mode.” In 2019, AFM launched the first casual avocado-centric restaurant in the world, based in Dallas, reinventing it in the pandemic.
One objective throughout the years is to create a program that really helps the entire produce industry. “We’re trying to bring on more and more companies to create recipes and products together. In the end, we’re helping the category and we’re helping the industry. We want to be sure that the produce industry stays healthy and keeps on growing in the future.”