Chilean avocados to grow in volume and scope with China campaign

November 08 , 2017

Last year Chile accounted for around 80% of avocados in the Chinese market in November and December, and in 2017 volume has been greater still in the lead-up to this period. But quality, consistency and gaining traction with new consumers will be crucial for building the market. At Fresh Fruit Portal, we catch up with two major Chinese avocado importers and the head of Chile's avocado industry committee to gauge plans for the campaign ahead. 

While avocado consumption growth is booming in China the average citizen knows very little about the fruit, let alone from a specific origin like Chile. 

"Even though avocados have achieved exponential growth in the past few years, compared with other South American produce like cherries and blueberries, avocados remain less known," says Echo Yuan of Joy Wing Mau.

"Consumers only have vague ideas about the origins and the nutritional benefits of avocados," she adds.

But she emphasizes the fruit is visible in all supermarkets, fruit shops and online stores in coastal and first-tier cities, and the category will most certainly continue to grow.

It's an optimistic view also shared by Patty Li of importer and distributor Frutacloud, who points to intensified demand for the product and the strong potential Chile has to be more on the radar thanks to the country's favorable market timing. 

"Initially, thanks to promotion efforts, avocados were known in coastal cities only, but now, avocados are gradually gaining ground in second and third-tier cities," Li says.

"As for Chilean avocados, because they are newer to the Chinese market than Mexican avocados, Chinese consumers have yet to develop specific perceptions of Chilean avocados.

"However, Chilean avocados are in season during the Chinese New Year period while Mexican and Peruvian avocados are not. Therefore, this is a good opportunity for Chinese consumers to purchase the fruit as new year gifts."

Both importers highlight the relevance of different harvesting seasons, with Mexico having year-round supply but with an off-peak season from May to August, Peru supplying China from March to August, and Chile's season running from August to February with a peak from November to January.

"Nevertheless, Chilean avocados are better in quality and in taste, and are also more suitable for promotion," says Li.

"Market-wise, the Chilean avocado is of a cheaper price with good quality compared with Mexican produce," adds Yuan.

Chilean outlook for production and China-bound exports

While the amount of land dedicated to avocado cultivation in Chile fell dramatically several years ago, production is on the rebound thanks to new plantings and more productive orchards.

"We’re going to be above 200,000 [metric] tons (MT) this year which allows us to keep growing and supply a bit more to the local Chilean market too," says Chilean Avocado Committee managing director Juan Enrique Lazo.

At it's peak the industry was producing around 300,000MT on close to 40,000 hectares, and now that figure is only a third lower but on half the land (20,000 hectares).

He adds there have been new plantings across the V (Valparaiso), Metropolitan and VI (O'Higgins) regions, while some growers are even finding new production areas in the more challenging climes of the southerly VII (Maule) region.

"We will be at around 250,000MT in the short term," Lazo says. 

Chilean Avocado Committee president Juan Enrique Lazo.

Of this volume only a small amount goes to China, with Europe as the leading market followed by the United States.

"Today they're [China] consuming around 20 million kilos (20,000MT) and I think that already reached the first stage of exponential growth - that was from people who knew about avocados, that it was good for their health," he says.

"We have to reach beyond with people who still don’t know about avocados, to show them the product and moreover, how to eat it.

"Consumption in China could reach 60 million kilos in the coming years, which is very small in terms of per capita consumption but it’s a good number. And with that we’re thinking of having 30-40% of that as the Chilean industry."

He highlights publicity for Chilean avocados took place last year in China from the wholesale market through to the final consumer, including through e-commerce and television. This year the committee plans to do the same with smaller campaigns but more of them, spread out across different regions.

"Last year our focus was on Shanghai and Shenzhen, Shanghai of course because it’s the most western city in China where there’s already been avocado consumption for many years and it’s growing quickly," Lazo says.

"We decided on Shenzhen as well because it’s a city of young people who are willing to change consumption habits. It’s difficult today to change the habits of an elderly person, but we can with their grandchildren, for example the Millennials."

Shenzhen was decided upon as a southern alternative to Guangzhou, but this year the committee will re-commence marketing efforts aimed at consumers in the major import hub, along with other major Chinese urban centers. 

"This year we’re going to expand to Beijing, Hangzhou, Ningbo, within the first tier cities along the coast. And then we want to go to the interior into the city of Zhengzhou with very specific and localized activities," Lazo said.

Expectations from China

Yuan of Joy Wing Mau says that until week 40, Chilean avocado exports to the Chinese mainland and Hong Kong were up 63% at 10,700MT.

"Our plan for Chilean avocados will be to more than double on last year and we'll keep increasing," Yuan says.

"We will keep distributing the fruit through omnichannel sales including wholesale, retail and e-commerce," she said. 

"Major sizes for China from Chile are most focus on 24# and 22# in 4kg cartons. Customers prefer premium avocados with green color, firm, no lenticels, black spots or decay.

Frutacloud is also increasing its efforts in Chilean avocados, with a view to collaborate with both online and offline to promote Chilean avocados.

"We are expecting a 30% increase in imports for the current quarter," Li says.

"Imports will be mainly by sea shipment. As for distributions, apart from wholesale markets, we will pay more attention to online stores and supermarket promotions.

"We will aim for bigger sizes and consistent quality avocados."

Pre-ripening a must

Both importers agree that pre-ripening is absolutely essential for building the avocado category in China, and have invested in the infrastructure needed to pre-condition the fruit, while also collaborating with clients across different channels so that they too understand the importance.

"We believe that pre-ripened avocados are trending and that they will be a common product in the future," says Li.

"In Europe and North America, the majority of avocados sold in supermarkets are pre-ripened, and Chinese consumers have already developed the habit of purchasing pre-ripened avocados.

However, she says at the moment most avocados circulating in the Chinese market are "hard and green".

"As a consequence, it is very easy and common for uninformed consumers to purchase and eat avocados while still green, resulting in them having bad experiences with the fruit. Thus, we believe that pre-ripening avocados is the way forward," she says.

"If a consumer buys raw fruit, the maturity is difficult to control and the consumer experience might be worsened due to the limited perception on eating methods," adds Yuan.

"Pre-ripening is a must-do step to satisfy consumer demand. Based on our promo practices, a high portion of consumers would like to buy ready-to-eat fruit rather than raw fruit," she says.

"That’s why we think we need to guide the consumers to buy ready-to-eat fruit."

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