Opinion: Chile's domestic avocado market 'here to stay'

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Opinion: Chile's domestic avocado market 'here to stay'

By Chilean Hass Avocado Committee operations manager Ricardo Waissbluth.

It's been a decade since the committee started to mildly worry about what would become of our domestic market, and that was how our first promotion efforts started across 20 Santiago supermarkets one weekend; this rapidly grew to encompass 60 supermarkets in Santiago and the provinces, as well as 30 street markets in the capital, and that continued for 2.5 months.

We sought a face to publicly represent our avocadoes and the first was racing driver Eliseo Salazar who was with us for two years, and then we hired tennis player Fernando González who was with our product for five years, until finally our product was absolutely identified for what it is.

Our face became directly known as 'Hass Avocado' and to date we can say that consumers, when buying avocadoes will choose 'Hass Avocadoes - only through defects, very green, which are not present, will the consumer make an alternative choice.

We could summarize the success of these campaigns to note that national consumption has gone from 2kg to 5kg per capita annually, in a period of nine years.

With respect to the percentage of fruit destined for the domestic market, when we started it was approximately 20-22%; a percentage that rose for diverse reasons until it reached 45% of total production volumes in the last campaign. Back in the beginning it was common for producers to send 100% of the harvest to various packhouses and the percentage that wasn't exported was sold to the domestic market by the same exporter.

The return values to the producer, which earlier in the decade were very reasonable given the high prices achieved in the U.S. as Chile was the only supplier to that market, subsequently fell for various reasons; Mexican entry to the whole U.S. territory throughout the year, prolonged deterioration, the price of the dollar, sales values in the domestic market which became more competitive, and so on. This meant that some producers left some of the fruit from their orchards to sell directly to local merchants and/or supermarket chains.

While the producer is free to sell their fruit to anyone, I think we should keep in mind that all producers entered into business with Hass avocadoes because it's basically an export product, and it was through the actions of the committee that the same exporters could open their own export markets to Europe and elsewhere; Chile today has a varied basket of countries where we can place our product.

In all the countries where Chile has gained a position, it has to be kept in mind that the said markets expect the volumes they've become accustomed to, and so leaving them with smaller quantities means they must look for what's missing with other suppliers, and in turn Chile loses its position when it wants to come back.

It has to be said there is a direct correlation between export markets and domestic consumption, as to improve returns it's possible that the percentage of fruit destined for the domestic market declines.

If we have a favorable climate in the coming season (normal rains and scarce frosts), it's possible that we'll have higher production than last season, and additionally if good current prices continue in the U.S. market, it's probable the domestic market will fall a bit but it should at least be around 35%.

And that's because the domestic market is here to stay.


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