Mexican Avocados Command North American Avocado Sales

Increasing production helping retailers sell more of the popular fruit.

Originally printed in the November 2021 issue of Produce Business.

Mexican avocados are a year-round shopping sensation. Proper merchandising of this major produce category is important for retailers because Mexican avocados command an overwhelming market share of the U.S. avocado market.

In calendar year 2021, Mexican grower-shippers are projected to send more than 2.4 billion pounds of avocados to the U.S., the highest ever, according to the Hass Avocado Board. That’s higher than 2.3 billion the previous year and the 1.8 billion Mexico shipped in 2016.

“Mexican avocados are extremely important,” says Marc Goldman, produce director of Morton Williams, a Bronx, NY-based chain of 16 stores in the Manhattan area. “They’re the only avocados I bring in.”

Mexico remains the key avocado supplier. “According to the Hass Avocado Board, nearly 85% of all avocados sold in the U.S. come from Mexico annually,” says Brooke Becker, senior director of North American retail for Mission Produce Inc., based in Oxnard, CA, “and during certain times of year, that number climbs to nearly 100%.”

Mexican avocados complement U.S. domestic production and fill the pipeline for consumer demand. During the last seven years, Mexico doubled its supply from 1.2 billion to 2.4 billion pounds, consolidating Mexico as the category leader. Today, eight out of 10 avocados in the U.S. originate in Mexico, according to Avocados From Mexico (AFM), based in Irving, TX.

DISPLAY FOR HIGHER MOVEMENT

“Avocados continue to climb year over year,” notes Dan Acevedo, director of business development of Greenfruit Avocados, LLC, headquartered in Newport Beach, CA, adding Mexican avocados are “extremely important” to retailers.

“Avocados rank in the top 5 produce items in most produce departments,” says Acevedo “They complement so many other commodities and items, like tomatoes, cilantro and limes. They’re a component in many more recipe and menu items than ever before.”

Mexican avocados exceed seasonal availability. “Avocados From Mexico are the only brand of avocados available all year long,” says Stephanie Bazan, AFM’s vice president of trade and market development. “Avocados From Mexico are always in season, which allows us to have ample supply for our retail partners. This is due to the unique microclimate of the Mexican state, Michoacan, the only place in the world where avocados grow all year-round and can meet the U.S. demand for avocados.”

The rich volcanic soil, natural irrigation and the topography of Michoacan allow for four blooms of Mexican Hass avocados a year. “With an approximate 85% of the market share, we are able to provide year-long programs for our retail accounts,” says Bazan.

To capitalize on heightened movement, retailers should construct effective displays. “Displays have to be more inviting,” says Acevedo. “The displays really have to show the avocados ripe and ready.”

“I think that size matters in displays. Add attractiveness as well.”

Retailers should enlarge their avocado offerings. “We recommend that retailers carry the right mix of avocados for their shoppers,” says Becker. “Ripeness, firmness and size are the top three most important factors for shoppers when deciding to buy an avocado.”

SIZING UP THINGS

Retailers should remain on top of changes in sizes. “Retailers need to shift with the size curve to follow the trends,” says Acevedo.

During the early fall, the jumbo-sized avocados were challenging to receive, so retailers were required to merchandise the smaller sizes, the 40s and 48s, Acevedo notes.

“That also changes the bagging configuration, so there’s a separation in the value proposition for consumers,” he says. “That’s one of the things we’re seeing retailers do more of — they’re shifting with the size curve.”

“Bagged avocados are proven growth drivers, and have seen strong trends coming out of the pandemic,” says Mission Produce’s Becker, who recommends retailers vary bulk offerings. “Offering two bulk sizes is effective in giving them the option to buy a few avocados for tonight and a few for later.”

She cites figures from Avocado Intel, which show 53% of consumers like buying bags for the convenience and 57% for the value.

In response to consumer preferences, Mission invested in a variety of packaging options, such as Jumbos, Minis and World’s Finest Avocados, to fit the needs of every lifestyle. Becker adds Mission has also designed its retail programs as “Size Minded” and “Ready,” which show favorable results at the retail level.

Merchandising Mexican avocados in bags helps move fruit. “The growth of bags accelerated significantly during the pandemic due to safety concerns and shopper perception of bags being a value offering,” says AFM’s Bazan. “Bags will continue to be important to the category as shoppers continue to look for value, which represents a unit per-trip driver for retailers. Displaying bags is important merchandising solution for retailers, as it gives shoppers a faster way to pick as they go through their shopping experience in the store.”

AFM offers a variety of bag-focused support programs and merchandising resources that can help drive retail avocado sales.

PERIMETER SALES STAR

Avocados cross-merchandise well with a variety of items, including tortillas and produce such as cilantro and tomatoes. Cross-merchandising Mexican avocados with those items helps lift sales for all items. “These items complement avocado sales,” says Acevedo. “Look also at salads, which also go well with avocados. When you move to the beginning of the year, when everyone looks to their diets and healthy eating, avocados will become top of mind.”

Avocados are becoming more familiar in shopping carts. “Avocados are often found in the same basket as tomatoes, citrus fruits, onions and salad greens,” says Becker. “A high basket affinity is also found for avocados with specific ingredients, like tomatillos, cactus, jalapenos and mangoes, which indicates that consumers purchase avocados with a specific recipe in mind.”

Outside of produce, avocados are often paired with shredded cheese, tortillas, chips and proteins, including chicken or ground beef.

Merchandising avocados in the edge of a store can help lift sales. “In order to drive larger baskets, retailers should focus on driving incrementally by leveraging the perimeter of the store,” recommends Bazan. “This will help reinforce cross-merchandising. For example, cross-merchandising avocados with other fresh categories will help drive incremental purchases as many consumers are looking for foods that help reinforce healthy eating for themselves and their families.”

AFM offers several options for merchandising resources to help drive incremental purchases in store perimeters. Retailers can visit avocadosfrommexico.com/shopper to order free displays.

“Recently, we’ve seen that shoppers are making fewer, but larger, trips to the store and AFM is working on basket-building initiatives for retailers to drive incremental purchase to accommodate this trend,” says Bazan.

National seasonal programs feature demand-driving elements, such as eye-catching thematic displays focused on occasions such as fall football, big game, basketball championships, Cinco de Mayo and Memorial Day, which helps capture incremental purchases. Value savings offers help drive units per-trip, and there is also digital/social support to engage with shoppers, says Bazan.

TAILGATE PROMOTIONS

With the return of fall football, AFM launched “Guac The Tailgate,” a national shopper program that runs through Dec. 27. Shoppers can scan QR codes from AFM truck bin displays for a chance to win one of 10 trucks or tailgate gear. This year, AFM also introduced Get in the Guac Zone promo with football legend Drew Brees. The promo includes in-store POS, and shoppers have the chance to win a $100K Smart Home Makeover.

Last year, AFM began to focus on creating a third “tentpole” consumption occasion, what AFM refers to as OND (October-November-December). Mexican avocados command more than 95% of the market share during these months, which has allowed AFM to establish the time frame as a major tentpole within its yearly marketing strategy. It focuses on shopper/trade marketing efforts to drive consumption.

The Golden State remains the biggest market for avocados. In the past year, 91% of households in California purchased avocados, spending an average of $53 per year on the fruit, according to Numerator insights. The West and South Central regions also see high avocado consumption, with 84% and 79% of households purchasing avocados, respectively, says Mission Produce’s Becker.

“With household penetration ranging from the 50% to 80% range, depending on where you are in the country, there is still plenty of opportunity to grow sales,” says Acevedo. “Some of the fastest-growing areas are probably the Midwest, Southeast and Northeast. People have more options to utilize avocados on the menus.”

The increasing demand for Mexican avocados has changed. A decade ago, marketers experienced some high demand peaks and low valleys, but demand has increased and leveled those curves, says Acevedo. “Because avocados are a part of most peoples’ diets, we’re seeing an increase in consumption and purchases during those times, but the drastic peaks and valleys have pretty much diminished.”

The quality of Mexican avocados has also improved, says Morton Williams’ Goldman. “We want to make sure the quality is as good as possible. Since a few years ago, when we switched to all Mexican avocados, we haven’t had any complaints about avocados. Ever.”