With its versatility and nearly 60 percent of U.S. households purchasing them, the opportunity is ripe for retailers to capture more of the market.
The volume of Hass avocados increased from 1.8 billion to 2.2 billion from 2014 to 2016, according to the Hass Avocado Board (HAB), Mission Viejo, CA. Can retailers expect the current growth in the demand for avocados to continue? What are the best ways to maximize avocado sales at the retail level? What are the best ways to merchandise and market avocados year-round?
We take a look at ways retailers can capitalize on growing segment.
Sell across the seasons. In today’s global marketplace, avocados are in season every month of the year. Nearly three-quarters of Hass avocados are supplied by Mexico, a year-round supplier that peaks during the winter months. California avocados become more widely available mid-spring through mid-fall. The Peruvian Hass is a summer fruit, while the Chilean avocado typically is available during the fall and winter. The season for large, green Florida avocados extends through the summer into early winter.
Seasonality sells. Jan DeLyser, marketing vice president of the California Avocado Commission (CAC), Irvine, CA, says that “year after year, retailers generate more revenue on avocados during California avocado season.” CAC supports sales with targeted advertising, social media, a consumer public relations campaign, retail recipe booklets and point-of-sale materials, ramping up efforts in the spring to support two high-consumption events — Cinco de Mayo and Memorial Day — and then promoting California Avocado Month in June. DeLyser adds that “letting consumers know when and where California avocados are available is a key focus of our advertising when we are in season. When shoppers can’t have something every day, it makes it more special when they can. Retailers can take advantage of consumer excitement about California avocado season by announcing when they have them in-stores and by using point-of-sale material that clearly points out the California origin.”
“Shoppers in California and the western states look for California avocados. They may not pay as much attention to country of origin during other times of the year,” says Dan Acevedo, business director for GreenFruit Avocados, Newport Beach, CA.
Peruvian avocados overlap with California. “We expect promotable volumes of Peruvian avocados from May through August this year, when Mexican supply is at its lowest,” says Xavier Equihua, managing director, Federal Strategies Group, Washington, D.C. “We are fortunate to have a condensed window at a time when people are eating a lot of avocados — Fourth of July and summer.”
Market on ripeness. For shoppers, ripeness presents challenges, particularly when planning around readiness to eat. Northgate Gonzalez, a 36-year-old California chain headquartered in Anaheim, CA, is committed to selling primarily ripe avocados. Produce director Alfonso Cano says the store was among the first to take a chance on ripeness. “We ripen our own and deliver to our stores seven days a week. Because stores fear getting stuck with overripe avocados, we tell them to order exactly what they need for the day.”
Offer variety.Hass avocados dominate — with about 95 percent market share — but Florida avocados give retailers the opportunity to grow sales even more. Bill Brindle, vice president, sales and marketing, Brooks Tropicals, Homestead, FL, says that “featuring a different category of avocado such as the Florida SlimCado is a great way for retailers to expand the peripheral buying vision of consumers. Give them new ways to enjoy the avocado, and suggest trying a different avocado for different recipes — just like how some people prefer light-tasting olive oil in one recipe and regular olive oil in another. The light-tasting SlimCado is perfect for salads and as a bowl for other salads.”
According to the California Avocado Commission, small- and medium-size retailers have run successful early and late season promotions on certain varieties, with very strong signage calling out their California origin. West Pak Avocado, Temecula, CA, markets several lesser-known varieties, including the Bacon, Reed, Zutano, Fuerte, Pinkerton and Lamb Hass. Because they are dwarfed by the volume of Hass avocados on the market, these other types of avocados may be available only in small quantities at a select number of specialty retailers.
The price is right. According to HAB’s Retail Volume and Price Data report for 2016, prices for conventional avocados were lowest in the winter and spring — averaging under $1 per avocado — and highest in the summer and fall, when average prices ranged from just more than $1 to nearly $1.50. In contrast, prices for organic avocados remained relatively steady throughout the year.
Avocado suppliers and trade associations shy away from price predictions. However, CAC notes that because California avocados are an alternate-bearing crop, a year with a large crop often is followed by a year with a smaller crop. Distribution is expected to be tightly targeted and prices may be higher.
Size matters. According to the Hass Avocado Board and its Avo Scorecards, PLU#4225 (large Hass, ~8 to 10 ounces) and PLU#4046 (small/medium Hass ~3 to 5 ounces) are the most popular sizes, accounting for almost 76 percent of total sales at retail. The size mix differs from region to region. South Central and Southeast consumers prefer PLU#4046, while the Northeast region purchases more of the large PLU#4225. Areas of higher consumption, such as California, also buy smaller avocados in greater quantities, but Hispanic families often buy large avocados to serve for family dinners.
“Hass Avocado Board’s strategic priority is to build demand through our nutrition marketing program to raise consumer awareness of avocado as a nutritious fruit, and increasing usage throughout the day.”
— Emiliano Escobedo, Hass Avocado Board
“A well-developed retail account will have a large-size avocado, a smaller size avocado, a bagged program and possibly organic,” says GreenFruit’s Acevedo.
Know your shopper. The Hass Avocado Board’s website provides shopper research studies and reports that analyze avocado shopper behaviors from various perspectives and uncover key drivers. Reports are available to the industry to help increase understanding, value and sales.
“Our 2016 Shopper Segmentation study shows that nearly 60 percent of U.S. households purchase avocados each year, driving annual household purchases to more than $1.6 billion,” says Emiliano Escobedo, executive director, Hass Avocado Board. “The top-spending quartile, Super Heavy, accounts for nearly three out of every four avocado purchases. Additionally, Super Heavy households purchase avocados twice as often as Heavy households, and spend twice as much per avocado shopping occasion.”
Market on health.Avocados deliver a unique nutrition package that is unmatched in any other fruit. Suppliers and trade associations have jumped on avocado health and nutrition messages, with great success in helping retailers market avocados for their healthy fat and other important nutrients. Nutrition and health professionals have proven to be effective partners in spreading the word about avocados in-store and among their followers on social media. As such, many avocado trade associations maintain robust health education programs.
CAC incorporates nutrition messaging into its consumer communications. The commission works with registered dietitian ambassadors to spread the news to wide audiences, and with supermarket registered dietitians to create custom programs with targeted retailers who support California avocados.
“Consumers today are increasingly aware of what they eat and how it affects their health,” says Escobedo. “We established a nutrition research program in 2010 to increase awareness and improve understanding of the unique health and nutrition benefits of avocados. With our research, and research from around the world, we have helped consumers have a much better understanding of why they should incorporate avocados into their daily eating habits. HAB launched Love One Today in late 2013, a science-based food and wellness education program developed to encourage Americans to include fresh avocados in everyday healthy eating plans to help increase fruit and vegetable intake. Through the Love One Today program, studies related to heart health, healthy living and weight management have been published to encourage consumption of fresh avocados. The Love One Today mark is available at no cost for the industry for use in retail materials such as packaging, header cards and other communications.” Escobedo also notes that nutrition and “good for you” messages are the top two purchase drivers of avocados among the health and wellness consumers in the United States.
HAB has partnered with the American Diabetes Association in the past, and this year the association is working with the American Heart Association to galvanize Americans to eat more fruits and vegetables every day through certified recipes to distribute in marketing communication campaigns. HAB introduced its affiliation with the American Heart Association’s new + color program to supermarket dietitians and nutrition communicators at the 2016 Academy of Nutrition and Dietetics Food and Nutrition Conference and Expo, where nutrition professionals took part in information sessions, fresh food sampling and chef-led demonstrations. Small-group sessions offered an in-depth look at current and upcoming research, along with an avocado recipe sampling, where a consultant physician talked with attendees about combining fresh avocados with other ingredients and swapping avocados for ingredients high in saturated fat to maximize nutritional value and flavor.
Additional educational and tasting opportunities included a culinary discussion on how avocados can be part of a heart healthy diet and raised awareness for HAB’s new four-year relationship with the American Heart Association and its + color program. Additionally, HAB hosted “Love One Today: In Bloom,” an event meant to educate nutrition and communicators about the latest avocado science and nutritional information while having fun making avocado roses, sipping an avocado cocktail and tasting avocado pairings. Supermarket dietitians and nutrition communicators can help multiply the avocado message and drive shoppers to the produce department.
Put it in the bag. The growing popularity of bagged avocados is attributable to several factors — the popularity of packaged produce at Costco, Sam’s Club, BJ’s and other large-volume retailers; a change in consumer mindset toward buying in bulk, particularly for items that are popular with family members; and the prevalence of pouches in produce departments. Net bags of four to six avocados are particularly prevalent in retail and large-format stores.
Bags also offer an additional vehicle for health messaging and recipes. GreenFruit’s Acevedo says his company is on board with the Produce Marketing Association and its Eat Brighter program for bagged produce. “We are seeing the bag segment growing at a rapid clip. We’ve invested in bright and educational bags to capture the attention of moms and kids and to deliver nutrition information. Our bags have posted strong double-digit growth.”
Growers and trade associations anticipate that the market for avocados will continue to expand. “There is still tremendous opportunity to grow consumer demand for avocados in the United States and around the world. At this point, the biggest limitation to sales growth of avocados from any source is the availability of supply,” says DeLyser.
Try It If You Like It
Try it, you’ll like it. Avocado use is so ubiquitous that it’s hard to envision a first-time consumer. Bill Brindle, vice president, sales and marketing, Brooks Tropicals, Homestead, FL, suggests using descriptors that can help the first-timer imagine the taste. For example, for the SlimCado, “lighter avocado taste, slightly nutty” might work. He also stresses the importance of usage tips. For example, one avocado may be preferred for guacamole while another is best on top of a salad. Avocados also can be baked, grilled, stir-fried, pureed or frozen. “Consumers find it’s a snap to add avocados to salsas and pestos,” says Brindle. “Use mashed avocado instead of a tomato base for pizza, or add to a brownie mix for incredibly moist brownies.”
“For decades the California Avocado Commission has promoted usage that goes way beyond guacamole,” says Jan DeLyser, marketing vice president of the California Avocado Commission, Irvine, CA. “We have provided thousands of recipes and recommend avocado in guacamole, salads, sandwiches and hummus, along with sushi, as the gateway to avocado appreciation.”
Partnerships Provide Resources
Suppliers and trade associations are a valuable resource for retailers. Brooks Tropicals puts together customized packages to fit the needs of the specific retailer. “We have a wealth of information and images that include nutrition, how-to’s, recipes and ripening tips,” says Brindle. “We can deliver any POS materials according to retailer specifications.” Brooks also puts together concise hand-outs for store personnel that include merchandising tips and ripening know-how, and will work with a retailer’s social media team to further their tropical base.
“We at Avocados from Peru take pride in our ‘bespoke’ promotions that are tailor-made for retailer needs,” says Xavier Equihua, managing director, Federal Strategies Group, Washington, D.C. “Avocados from Peru has been highly successful at reaching all levels of users at Wal-Mart, where we do waves of demos for recipes such as avocado toasts, chocolate avocado mousse, avocado smoothies and other avocado dishes during the window for Peruvian avocados. We don’t do guacamole; we want to promote new ways of eating avocados.”
Avocados from Chile posts short usage and idea videos on the Tasty Facebook page. “Retailers love them,” says Karen Brux, managing director of Chilean Avocado Importers Association, San Carlos, CA. “One large nationwide chain that posts our videos on its Facebook page and they get more than 50,000 views in just a day.”
Avocados from Mexico (AFM) presents a robust calendar of shopper marketing programs and a broad selection of innovative merchandising solutions. “Each year we provide retailers with a comprehensive AFM Retail Toolkit for promoting avocados year-round,” says Stephanie Bazán, market development director for Avocados from Mexico, Irving, TX. “A key element is our Amazing Things Are Happening booklet, which details all of AFM’s in-store promotional elements and merchandising options so that retailers can determine which displays best fit their store and customers. Our custom-designed programs include 360-degree support elements, including retail display contests, consumer sweepstakes, retailer giveaway contests, in-store radio, merchandising, consumer incentive offers, retail specific programming and digital/social media content.”
Leading up to Cinco de Mayo, AFM’s Fiesta del Fuego promotion will feature a partnership with Tabasco Sauce that offers in-store merchandising, consumer savings, a consumer sweepstakes, digital and social promotion and in-store radio.
“CAC works directly with retailers and in cooperation with California avocado handlers to create customer-specific marketing programs,” explains DeLyser. “Our intent is not just to move more avocados. Instead we develop targeted programs to help provide the best experience possible for everyone in the supply chain — growers, handlers, retailers and consumers. First, we share data with the retailers and point out opportunity gaps, perhaps in pricing or in merchandising. Then we work to customize programs that fit what the retailer wants for shoppers, custom POS, in-store radio, geo-targeted advertising and/or other strategies. ”
“Hass Avocado Board’s strategic priority is to build demand through our nutrition marketing program to raise consumer awareness of avocado as a nutritious fruit, and increasing usage throughout the day,” says Emiliano Escobedo, executive director, Hass Avocado Board. “We develop toolkits for supermarket registered dietitians to use in-store to promote avocado health benefits to shoppers. In addition, our Supply and Demand program aims to improve availability, industry awareness and use of category information and research. HAB’s Track and Monitor Section offers data-based category insights, which can assist the industry in making sound retail business decisions.”