Originally printed in the November 2023 issue of Produce Business.
The U.S. market for avocados has more than doubled over the past 10 years and an estimated eight out of every 10 avocados consumed in the country are sourced from Mexico. At the same time, consumption of avocados — and, in particular, guacamole — has skyrocketed, with the average U.S. consumer (per capita consumption) now eating 9 pounds of avocado compared with 5.3 pounds a decade ago.
All of this underlines the huge importance of the U.S. market to Mexican avocado growers and equally its significance as a supplier for importers and retailers alike. As if this wasn’t enough evidence, 2022 was a record year for Mexican avocado exports to the U.S., with 2.48 billion pounds worth of them shipped north of the border, according to promotional body Avocados from Mexico.
Stephanie Bazan, senior vice president of commercial strategy and execution at Avocados From Mexico (AFM), says the 2023 season is heading for similar success.
“In terms of quantity, we’re coming into the season where Mexico leads. Right now, Mexico accounts for 83% of the category,” she says. “As we get into these peak avocado months, our quality is great. We’re seeing some really good fruit coming out of Mexico.”
The stream of imports from Jalisco, following USDA approval in July 2022, is making a difference, Bazan adds. Mexico’s second-largest avocado producing region after Michoacán, Jalisco counts on an estimated 3,100 growers who produce more than 250,000 tons of the fruit every year.
“Year-round availability is one of our points of differentiation, especially since the addition of Jalisco,” says Bazan. “This means we’re able to provide even more avocados to U.S. consumers.
This year’s Mexican avocado season has been progressing positively in terms of quality and volumes, says Peter Shore, vice president of product management for Santa Clara CA-based Calavo Growers.
“There has been a nice increase of volumes and there’s good bulk and bag promotions set for the fall of 2023.”
With quality very good and fruit ripening well, Shore expects to see similar supplies for the fall, driven by strong market demand. “Our Mexican packing operations in Michoacan and Jalisco are working daily to source high quality fruit,” he adds. “We have excellent bagging capacity in all U.S. and Mexico locations.”
Closer to source are specialized importers, such as Villita Avocados, that base operations along the U.S.-Mexico border. Located in Pharr TX, Villita is currently overseeing the transition of volumes from earliest bloom fruit (flor loca) to early bloom (aventajada), according to company owner Alfredo Rodriguez.
“As we progress, we will see more of the 48 and larger avocados that have been tight in supply with the flor loca,” he says. “Dry matter, which is the maturity indicator, is well above the minimum standard and the cosmetic appearance is good, too.”
In terms of comparisons with the 2022 season, Rodriguez says sizing has so far been the main difference, with more size 60s and smaller, fewer 48s. “It was very accentuated at the beginning, but is improving now with aventajada fruit: 48s and 40s are starting to come in good volume and only 32s and 36s seem to be continuing below normal yields.”
MAKE THE MOST OF MERCHANDISING
Bazan says the principal aim of Avocados from Mexico, which is celebrating its 10th anniversary this year, is to add value to the category when it comes to merchandising.
“We are a one-stop source for category leadership, intelligence, and data insights that will help drive their business,” she says. “We try to understand what retailers are trying to achieve and in many cases, we customize programs because sometimes ‘one size fits all’ will work and sometimes it won’t.”
Avocados from Mexico’s assistance takes an overview of how retailers are merchandising and promoting avocados based on their shopper profiles and makes assortment recommendations. This also includes areas adjacent to or outside of the produce aisles, suggesting where avocados could also be merchandised to help drive sales.
“We look at their shoppers and try and understand who is shopping,” Kazan explains. “We have experts on the team that are assigned to our retailers and handle 150 retailers across the U.S. Their job is to understand the retailer, to bring them insights that add value”.
To get the most out of important calendar events, such as Cinco de Mayo and the Super Bowl, Calavo’s Shore recommends retailers carry a full mix of avocados in terms of fruit sizing. This includes stocking large and small bulk displays (jumbo, large or small) and potentially two sizes in bags (large, small or tiny), as well as organic bulk and bags.
It may not be an importer itself, but Avocados from Mexico is heavily involved in promoting Mexican avocados across the U.S. with a string of ambitious programs.
One of its most noteworthy is Avocados from Mexico’s ongoing partnership with leading breast cancer awareness organization Susan G. Komen. “Besides it being a fabulous cause, and near and dear to many shoppers and retail partners, we find it resonates with our core target and it helps us promote our tie-in with health and wellness,” says Bazan.
“If you go to a Walmart or Kroger or Aldi or Food Lion, we have our pink packaging in place that promotes our partnership and calls out our health and wellness messaging on the bags.”
Football season — which runs from collegiate kickoffs in August through the Super Bowl in early February, is prime avocado time, thanks to fans’ growing appetite for guacamole.
Avocados from Mexico also offers fall football promotions. To kick things off, the organization will be partnering with the College Football Playoffs in the first partnership of its kind in produce. “The association between guacamole and football is very relevant,” says Bazan. “For all the viewing events, tailgates and ‘homegates’ that happen all the way up to the college playoff on Jan. 8, guacamole is going to be consumed, so we want to make sure we’re involved in all those viewing occasions.”
Avocados from Mexico’s football association then continues on to the Big Game, or Super Bowl, — the No. 1 consumption period for the category — on Feb. 11. For 2024, the organization is partnering with sports commentator and former NFL professional Jessie Palmer.
“Our theme is ‘Host a Better Bowl’ because all Big Game viewing parties are better when they have a bowl of guac,” Bazan says. “That’s our theme, and you’ll see those materials in store right after the week of Jan. 8.”
The opportunity presented by the football season, as well as other important dates on the calendar, are also by seized by growers and marketers such as Villita.
“We always plan for higher sales because of football, and this year is no different,” says Rodriguez. “The first weekend of college and pro football drove sales up. America’s favorite pastime of watching football while snacking on chips and guacamole has certainly been most appreciated.”
“Fall is a great time for promotion around football,” says Shore. “Christmas and New Years are also excellent avocado entertaining holidays. We see opportunities here for dips and dressings as well as sliced avocados as a side dish.”
BAGGING FOR GREATER SALES
The use of plastic bags or nets is one area where the avocado sector is seeing particular growth, according to Bazan, who says the use of bags at a retail level in the U.S. has increased by 17% over the last five years, catapulted by the COVID-19 pandemic.
“We find bags a great way to drive more units per trip and to really communicate our story — through our branding — about Avocados from Mexico.”
For each of its promotional campaigns, AFM creates a packaging option within national programs for retailers, Bazan continues. “We’ve been seeing a proliferation of bags for many retail accounts and it’s an important part of the assortment.”
Shore echoes Bazan’s assessment. “Bags have been performing very well and are continuing to help increase sales of avocados,” he says. “Consumers conveniently pick up a week’s supply of avocados in one bag. They also allow us to bag avocados in multiple configurations, which can go from 3 count to 8 count, depending on size of fruit.”
Villita’s Rodriguez says the importer has been using the surplus of small avocados this season to promote bagged options. “The smaller sizes — 70 and 84 — offer very good value that attracts customers to consume more avocados,” he says. “The medium sizes (60s and 48s) have also have reached a price point that makes them a very good deal on the shelves.”
In fact, Rodriguez says Villita experienced a growth in bag sales when it promoted a recent Avocados from Mexico ‘$1 off’ coupon promotion. “This helped ‘move the needle’ for us,” he says.
Looking at the overall picture, Rodriguez says retailers have succeeded in selling more avocados, thanks in part to the effectiveness of secondary, impulse displays of bagged avocados by the chips and beverage aisle.
He also believes shopper behavior is influenced by both demographics and the time of sale. “The first of the month, we see an uptick in larger fruit and bagged sales,” Rodriguez explains. “The last week of the month, we sell more of the smaller sized fruit. And in the Latino population, we see more of a demand for large fruit, like the 32s and 36s.”
Villita is the first avocado company in North America to offer 100% plastic free and compostable bags, according to Rodriguez.
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More Mexican States Eye US AVOCADO MARKET
Are other Mexican regions poised to join Michoacán and Jalisco in the U.S. market?
The Association of Avocado Exporting Producers and Packers of Mexico (APEAM), a trade association, currently certifies around 700 growers based in the two main production areas, as well as a smaller number to the east in Mexico State. Production is also increasing in the states of Morelos and Puebla.
However, Avocados from Mexico’s Director of Corporate Communications Ana Ambrosi sounds a cautious note.
“Growers who want to export have to go through the USDA program and any state that wants to export to the U.S. also has to go through APEAM,” she says. “And there are all sorts of tests to determine quality and agrochemical use that they have to go through.”
In other words, although production in other regions is increasing, the prospect of them joining Jalisco and Michoacán may still be some way off.