A 2 billion pound market for Hass Avocado
The US has become the world’s largest consumption market
Consumption of Hass Avocado in the US has grown 130% in the past 10 years. In 2015, the US consumed over 900,000 tons of fresh avocados, which represents a “two billion pound” threshold that many industry observers have been discussing for several years. This volume has more than doubled since 2008 and the growth shows no signs of slowing in the near future.
US avocado consumption has grown at an annual rate of 16% since 2008. In that year, the US consumed 424,000 tons of fresh avocados. The estimate for 2015 is 914,000 tons, meaning an average of 2.8 kg of avocados per person. This trend is expected to continue in the near future. New plantings in Peru, Mexico and elsewhere are evidence of this trend. Giovanni Cavaletto, VP of Sourcing at Index Fresh, explained that “in many commodities such tremendous growth in supply would cause severe erosion in the price per carton. This has not been the case with avocados.” According to the California Avocado Commission, in 2008 Californian growers got an average price of US$2.20/kg for their fruit, but in 2014 this rose to $2.49/kg.
1,400,000 tons expected by 2025
There are currently 6 countries supplying fresh avocados to the US market: the US itself, Mexico, which represents over 70% of Hass avocados sold in the country, Peru, Chile, New Zealand and the Dominican Republic. The increased volumes of imported fruit have been the key in developing the year-round, nationwide market presence that was necessary to drive the promotions and programmes that make avocado marketing successful today. Industry leaders predict that by 2025 the US market will consume more than 1,400,000 tons of fresh avocados. Over the next ten years, other countries will surely be added to that list. According to Cavaletto, Colombia, Brazil, and several countries in Africa have expressed interest in shipping fruit to the US, as have several countries in Central America.
Latinos: the key to increased consumption
The US population has 315 million people and within this number there is a wide variety of regional and ethnic differences. Avocado consumption in many parts of the country was hindered by inconsistency in supply, but the growing Latino portion of the population throughout the country has helped increase avocado awareness in recent years. As immigrants have worked their way from entry-level jobs to opening up their own businesses and restaurants, they have played a key role in introducing many people to new and exciting ways to consume avocado.
“Special Packs” designed for sales programme
Roughly 56% of this fruit makes its way onto supermarket shelves, while 24% goes to restaurants. The balance goes through a variety of wholesalers throughout the country, who distribute it to smaller scale operations. The distribution chain is key to the “just-in-time” inventory replenishment demand from the programme’s buyers. In such a chain, cold storage and ripening centres are located strategically in different regions of the country. Through these locations, it is easier to make sure that the right size is delivered in the right packaging style and at the right stage of ripeness to the right customer on the right day, every day. Many packaging styles are used in the U.S. market. Historically, the 11.3 kg cardboard carton was the industry standard. Today, what is referred to as “special packs”, specifically designed for the programme’s sales, make up nearly half of the avocado sales in the US, including bagged fruit and fruit packed in returnable plastic containers. The fruit is also delivered to the customer at a designated ripeness level.
Nutrition research strategy to increase consumption
Avocados are a healthy product whose consumption is backed by more than USD 50 million per year in advertising and promotional activities. Outside of the traditional strategies, the Hass Avocado Board has also undertaken a nutrition research strategy to help drive growth in avocado consumption, sponsoring clinical health research studies that have focused on 3 primary areas of nutrition: cardiovascular health, a healthy lifestyle and weight management.
Opportunity to increase avocado usage at breakfast
Avocado consumption is not even across the entire country; some parts of the U.S. consume more than others. In California, 89% of households purchase avocados and the average household consumes more than 3 avocados per month, while in the Plains states, only 51% of households consume avocados and average purchases are fewer than 2 avocados a month. Guacamole continues to be one of the favourite methods of consuming them, but other popular uses are in sandwiches, salads and plain. Dinner is the most common meal for avocado usage, while the small percentage of people using them as a breakfast food indicates there is a greater opportunity to increase avocado usage in the early morning.
