New Hass Avocado Board study redefines avocado shopper segments.
By Alejandro Gavito, Senior Business Insights and Data Services Manager, Hass Avocado Board
Originally printed in the May 2022 issue of Produce Business.
Marketers and retailers who understand fresh avocado shoppers and their purchase behaviors can create strategies that drive traffic, build loyalty and grow sales of fresh Hass avocados.
In the rapidly evolving retail landscape, market dynamics are heavily influenced by shopper characteristics and behavior. In the U.S., 65% of households purchase avocados each year and spend an average per household of $23.55 annually, while nearly 83% of these avocado-purchasing households are repeat buyers. To delve deeper into the purchase behaviors of avocado shoppers, the Hass Avocado Board recently released a new study that defined a new shopper segmentation for the avocado category.
The shopper segmentation study was conducted by ranking avocado-purchasing households by each household’s total annual avocado spend (high to low) and dividing this ranked list into five segments. The top-spending quartile (25%) was divided into three segments of equal size, each accounting for 8.3% of avocado-purchasing households. These three segments were designated as “Ultra,” “Mega” and “Super” households.
“Heavy” households comprised the second top-spending quartile, and “Moderate” households comprised the remaining 50% of avocado-purchasing households. The findings were based on avocado purchase data from the IRI Consumer Network, a continuous household purchasing panel that captures actual shopper purchases and behaviors.
The study, available for free download on hassavocadoboard.com/business-support-tools, determined that Ultra shoppers made the most significant impact on the category. Ultra shoppers were found to be the top-spending segment and made up 8% of avocado buying households. However, this segment accounted for 35% of the total U.S. annual avocado purchase dollars. Ultra shoppers exhibited purchase behaviors that far exceeded other segments, driving their disproportionate impact on the avocado category.
• Ultra shoppers spent an average of $100 per household annually, two times that of Mega shoppers ($50) and 17 times that of Moderate shoppers ($6).
Diving deeper into this high spending rate revealed the underlying purchase behaviors driving this gap in annual spending. Ultra shoppers made more trips to the retailer to purchase avocados, and this group spent more on avocados per shopping occasion.
• Ultra shoppers purchased avocados an average of 26 times per year, nearly 10 times more often than the moderate group, which made 2.8 trips per year.
• Ultra shoppers also visited retailers more often and were more likely to purchase avocados during their visit than any other shopper segment. On average, Ultra shoppers made 183 trips per year to the retailer and purchased avocados during 14% of their trips. In contrast, Moderate shoppers made 153 trips and purchased avocados during 2% percent of their trips.
• In addition to greater purchase frequency, Ultra shoppers also spent more per trip than the other segments. Ultra shoppers spent an average of $3.80 per trip on avocados, +83% more than moderate shoppers ($2.08 per trip).
Ultra shoppers also present a greater opportunity for retailers looking to grow the value of the market basket. The study revealed that avocados increased market basket value by 70% for Moderate and Heavy shoppers, while avocados showed a +77% premium in Ultra baskets. Additionally, avocados held a larger share of the basket for Ultra shoppers than other segments: Avocados comprised 4.4% of total basket value in Ultra baskets, nearly a whole percentage point more than Mega households (3.5%) and nearly two points greater than Moderates (2.6%).
However, the Ultra segment is not the only high-valued segment in the category. Mega and Super shoppers also made a disproportionately large impact on category purchases.
Mega and Super shoppers accounted for a larger share of avocado dollars than their respective share of households would suggest. Each segment represented 8% of avocado-purchasing households, while Mega shoppers accounted for 18% of avocado purchases and Super shoppers accounted for 13%. Combined, Ultra, Mega and Super shoppers made up 25% of all avocado-purchasing households and 66% of avocado dollars.
As marketers and retailers work toward a deeper understanding of the changing retail marketplace, the findings in the Shopper Segmentation study can help highlight opportunities within these new avocado shopper segments, particularly with Ultra households. Retailers and marketers can capitalize on key opportunities from this study to generate excitement and engage with Ultra, Mega, and Super households by using promotional incentives to increase avocado purchase conversion.
Download a copy of the entire study and action guide at hassavocadoboard.com/business-support-tools for more information about these defined shopper segments, including key insights, shopper trends and profiles.
Overall, these segments serve as a solid foundation to help avocado marketers and retailers zero in on their target as they further define their avocado shoppers.
Alejandro Gavito, senior business insights and data services manager at the Hass Avocado Board, provides leadership and strategic insights into the distribution, consumption and marketing of Hass avocados. The Hass Avocado Board (HAB) collects, focuses and distributes investments to maintain and expand demand for avocados in the United States. HAB offers these insights and detailed retail information as the only avocado organization that equips the entire industry for success, with clear and actionable data and metrics that all can use to drive their avocado business.
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Improve Overall Produce Consumption One Item at a Time
By Jim Prevor
The increase in avocado consumption is perhaps the single greatest win for the produce industry in the last 20 years. Since 1997, when the US began the process of lifting a ban on importing avocados from Mexico that had been imposed in 1914, US per capita avocado consumption has increased more than four-fold, and about 80% of the avocado consumption in the US is supplied from Mexico.
Many factors have played into this explosion of consumption: A) Supplies were artificially constrained by the US ban on imports; B) Changes in the ethnic composition of the American population increased the percentage from Mexico and other places where avocados are an integral part of the cuisine; C) Travel has exposed larger percentages of the population to culinary options that include avocados; D) A kind of pivotal mass was reached where almost all stores felt the need to carry avocados at reasonable mark-ups; E) Health authorities began praising avocados as rich in mono-unsaturated fats like oleic acid, which are tools to reduce inflammation, lower “bad” cholesterol, increase good cholesterol, reduce risks for heart disease, etc.; F) New culinary dishes such as Avocado Toast both broadened the appeal of avocados and gave them an entry into mainstream cuisine.
It also is an incredible story about the institutions that played a part in building this demand. The Hass Avocado Board, The California Avocado Commission, Avocados From Mexico and others not only deserve applause, but their efforts require the closest of attention as a model for the rest of the industry.
At the same time, the marketing approach highlighted in this piece, though surely correct, also points to the enormous challenge that broader industry efforts to boost consumption are actually facing.
It is not really a produce issue… it is the nature of marketing. If, here at Produce Business, we need to sell a few more ads to meet our budgets, we don’t go out and call people who never advertise. Getting them to buy an ad is a big job. We have to first persuade them they ought to spend money on advertising, then persuade them that we are the best place to do so. How much easier to reach out to people who already believe in both advertising and in this publication.
For the produce industry as a whole, the dilemma becomes obvious. Whether they are retailers, supply companies or marketing boards, the path most likely to succeed is to get people who already enjoy our products to enjoy a bit more frequently.
This leads to two separate dilemmas:
First – high-consumption families of individual produce items typically index as high consumption families of all produce items. So it is extraordinarily difficult to boost overall consumption of produce by promoting an individual item. It is often the case that the win by one item is a loss for another.
Second – the return on investment by marketing individual items to high-consumption consumers is so much more likely to pay off that the industry finds it difficult to invest in the low-consumption sector. This study actually shows the “Ultra” Households – the high-consumption Households – spend 17X the amount on avocados that the “Moderate” shopper does. That means the average annual spend on avocados for the Ultra shoppers is $100 and only $6 for the so-called Moderate shoppers!
But $100 isn’t very much. That is less than $2 a week. So the bet on marketing is that investing to move the needle on consumption from $2 a week to $2.50 a week – dealing with people who already enjoy avocados – is more likely to succeed than investing money to get people who eat no avocados to suddenly start buying significant amounts.
Of course, there is a possibility for winning by moving people into the high-consumption shoppers segments Typically, though, this is not going from zero to hero – it is, more typically, moving from one high consumption category to another. Indeed, a large part of the change in the avocado segment has been the move up from Super and Mega consumers of the product to the top Ultra category.
This is highly sophisticated research, and following its implications will lead to more avocado consumption, which is, of course, the purpose of the Hass Avocado Board – so we owe a vote of congratulations to the board for making it happen.
We have, of course, many organizations seeking to find ways to boost produce consumption. The Produce for Better Health Foundation and Brighter Bites both, for example, have come to realize that there is a large population, especially among the poor and uneducated, who consume very little produce.
The challenge is that building on a low base of consumption requires a large investment to give away produce, to educate, to facilitate extended exposure so that consumers not accustomed to the taste of many produce items can be exposed and taught to like them. Of course, none of this is likely if the produce industry is not vibrant and prosperous.
So our main goal should be to help the overall industry prosper, so it can invest and encourage others to invest to make high produce consumption more likely.