Avocado: The green gold hits some stumbling blocks
The avocado one of the most successful fruits of recent years thanks to its increasing popularity. Now a fashionable fruit, avocados have gone from being considered an exotic fruit for sporadic consumption to a habitual purchase.
This accomplishment stems from the fruit being made available year-round, the introduction of the Hass avocado which has higher culinary quality than previous varieties, competitive pricing, and promotional campaigns.
Avocados are closely associated with Mexico, the product’s place of origin where it is incorporated into many foods and traditions. One out of every three avocados worldwide is Mexican. Avocado production is already enormous but nevertheless continues to grow at a gigantic rate.
The ‘Green Gold Fever’ has also spread to other countries which have strongly expanded avocado cultivation and commercialization. Such is the case with Peru, the Dominican Republic, Columbia, and on a lesser level, the U.S. and Chile.
World supply has markedly increased in recent years. Thanks to the fact that this growth came accompanied by a spike in popularity, crops generally found a sufficient outlet. The law of the market which states a rising supply will result in falling prices did not apply to avocados. Over the past few years, the attractive prices stayed constant. 2020, however, showed that this gold doesn’t always glitter. It was a complicated year.
On one hand, there was a strong increase in supply. Peru, as well as South Africa, came off a low year, recovering significantly in 2020 as is habitual for the species. To this was added surface and commercial expansion that, in some cases like Colombian and Kenya, was notable. Only Chile registered a decrease, a result of the water shortages currently affecting avocado production in that country.
This year’s large volume went mainly to the European market. The EU is by far the principal destination for avocados from countries in the southern hemisphere, receiving 65 to 75 percent of exports. For this reason, Europe received an inundation of avocados, which arrived in a market altered by the pandemic.
The growth is due, on the one hand, to the fact that the pandemic led to the revaluation of healthy foods and avocados have that image. Years of publicity paid off. To this was added the element of people who, while confined to their homes, began looking for pleasure or compensation via their food.
A third positive factor took the form of supermarket politics, which ran promotions with prices attractive to buyers throughout the campaign. This mainly happened in Germany, where avocado consumption grew at a more rapid rate than any other European country.
However, the pandemic also had a negative side. Sales through alternative channels plummeted. The Horeca sector of the foodservice industry in particular was left practically paralyzed. In the avocado industry, this channel is extremely important and absorbs large volumes, especially the fruit of caliber and quality not in demand on the market.
The drop in sales through alternative channels can only be partially compensated by increased sales in supermarkets. In the absence of an exit, supply accumulated, consisting of fruit that was small in size and did not meet chains’ quality standards. Prices dropped. Merchandise not assigned to a supermarket program was very difficult to locate.
Low prices, greatly inferior to past years, became widespread. The meager economic results of the current campaign surely darken the success experienced in previous years.
For avocados to continue as “green gold”, it will be necessary to adapt commercial strategies, plan and program shipments, adjust to what the market demands, and look to diversify the fruit’s destinations.