Avocado Popularity is Soaring

Demand for this versatile fruit is sweeping the nation.

The popularity of avocados has soared in recent decades, with imports, production and availability up more than 300% since 2001, according to U.S. Department of Agriculture data.

“Part of the avocado’s appeal is its broad versatility, and, while avocados are popular year-round, they are a major part of group gatherings, events and holidays such as New Year’s, game-day parties and Cinco de Mayo,” says Kirk Marquardt, senior director of sales at Coral Gables, FL-headquartered Fresh Del Monte North America.

Avocados from Mexico (AFM) — an Irving, TX-based joint venture between the Mexican producer-packer association APEAM and the Mexican Hass Avocado Importers Association — views events and holidays as key consumption occasions for Mexican avocados.

“AFM is coming off a record-breaking year, as we imported nearly 2.5 billion pounds of avocados,” says AFM’s senior vice president for commercial strategy and execution, Stephanie Bazan.

“Part of that success was due to a record-setting Cinco de Mayo last year, as volume was up 61% from 2022, and a record number of point-of-sale displays — 1.7 million were sold into retailers via our shopper marketing programs,” she says.

The Colombia Avocado Board, based in Orlando, FL, represents another supplier origin making gains in the U.S. market. Managing Director Manuel Michel says Q1 and Q2 are key purchasing periods for avocados each year.

According to Michel, changes in household penetration and purchase frequency have caused Q1 to become the leading purchase period.

One of the first importers of Mexican avocados into the U.S., Pharr, TX-based Villita has more than 20 years of experience distributing and marketing avocados across North America. As executive vice president Rob Ybarra explains, Villita’s origins can be traced back to 2002 when, following the lifting of a ban on Mexican avocados in the U.S., the company became one of a handful of businesses to begin shipping north of the border.

According to Ybarra, Villita prides itself on being able to offer Mexican avocados year-round, sourced from the company’s portfolio of grower-partners who make up around 90% of its total volumes. Although most of the growers are based in Michoacán state, Villita recently opened its own packing facility in neighboring Jalisco and is poised to benefit in terms of additional volumes from May onward from a region that was authorized for U.S. exports in 2021.

For the six months ahead, Ybarra predicts a larger volume, though smaller-sized crop with many more 60s, 70s and 84s than were seen in the previous season. He also expects to see more Grade No. 2 avocados due to wind scarring and indentations, fruit that will be marketed under Villita’s “Beauties” brand.

“Our beauties are avocados that have Mother Nature’s beauty marks — a bit more scarring, blackspots and sunburn mostly,” says Ybarra. “But the inside flesh is what matters, and they taste phenomenally great.”

Giovanni Cavaletto, president, GLC Cerritos, LLC, Oxnard, CA, says with a blend of “Mendez Hass” and regular “Hass” planted at different altitudes, Mexico can offer avocados to the U.S. market 52 weeks a year.

“The blessing of the ‘Hass’ variety is that growers, especially those in cooler growing areas, can store them on the tree for over a year. This removes some harvest pressure that other crops with a shorter harvest window might have,” he says.

Cavaletto says there is generally an off-season, May to August, during the transition between old-crop finishing and new-crop starting, and avocados from Jalisco help Mexico to be an even stronger year-round supplier.

He says Jalisco began harvesting new-crop “Mendez Hass” avocados for Canada and Asia in mid-May. The Mendez Hass grows between 4,000-5,000 feet above sea level. This “allows Mexico to achieve critical mass earlier in the season than when traditional ‘Hass’ from Michoacan was the only option,” says Cavaletto.

“Mexico’s proximity to the U.S. allows them to react quickly to the market. Their ability to increase or decrease harvest levels based on market performance keeps the freshest fruit in the pipelines at all times,” he says.

HARNESSING SALES

With avocados now a staple for some consumers year-round and an impulse buy for others, Michel recommends retailers be prepared to cater to both segments at any time.

“Larger displays help further drive those planned and impulse purchases and require less restocking,” says Michel.

Peter Shore, vice president of product management at Santa Paula, CA-based Calavo Growers, recommends increasing display space allocated for avocados during major tie-in events, with multiple displays, bulk fruit, bags and organics.

GETTING SHELF-SPACE RIGHT

Although retailer space for avocados varies throughout the year, according to promotional activity and seasonal availability, Fresh Del Monte’s Marquardt says it is important to expand the avocado section during key periods to meet increased demand.

Melissa Mackay, Fresh Del Monte’s vice president of marketing, believes there is a clear opportunity to leverage this demand for avocados during holidays and events through merchandising, marketing campaigns and in-store promotions.

“Retailers and suppliers often kick off promotional plans for these well in advance to capitalize on the heightened consumption during these events,” she says.

Jennifer Anazawa, director of commercial insights at Oxnard, CA-headquartered Mission Produce, argues that, while it’s true to say shelf space allocated to avocados varies from store to store depending on demand, the fruit contributes 7% of total fruit dollars in the U.S. (Circana), so they should be given, at the very least, the equivalent amount of space.

“For regions with higher demand, such as California, a retailer could make strong returns by allocating an even higher percentage of shelf space to avocados,” she says. “That said, to facilitate earning the highest returns on your avocado category, we recommend retailers meet the demands of shoppers with a complete assortment of avocado offerings. For many retailers, that generally includes two bulk SKUs, one bag and one organic offering.”

While merchandising varies, Terry Splane, vice president of marketing at the California Avocado Commission (CAC), recommends expanding and contracting avocado category merchandising space in alignment with appropriate demand periods.

The top three avocado purchase events, which also include the Fourth of July, require additional displays of avocados because consumer demand is so high. “Signage themed to the events draws attention and encourages incremental purchases because creating avocado dishes for entertaining requires multiple avocados and often complementary produce purchases,” says Splane.

“Retailers can highlight avocados with large, disruptive displays anywhere in the store, or cross-merchandised with fresh products and ingredients used for making guac to create ‘guacamole stations.’”

— Stephanie Bazan, Avocados from Mexico, Irving, TX

He identifies CAC’s targeted consumers as “avocado lovers” — the top 25% of avocado shoppers who account for a disproportionate two-thirds of avocado purchases, and are willing to pay a premium for quality, locally grown avocados. “Millennials with children at home index higher among this group, and our marketing reaches them and beyond,” he adds.

Similarly, AFM encourages retail partners to promote avocados with attention-grabbing displays, featuring recipes and tips. According to Bazan, such methods make the avocado shopping experience easier and more enjoyable for consumers.

“Retailers can highlight avocados with large, disruptive displays anywhere in the store, cross-merchandised with fresh products and ingredients used for making guac to create ‘guacamole stations,’” she suggests.

THE RIPENESS QUESTION

When it comes to avocados, ripe fruit consistently outsells green, according to Marquardt. With most consumers looking to enjoy their avocados soon after purchase, he says putting stage 3-4 ripeness on display is ideal.

But while this preference cuts across demographics, Fresh Del Monte’s Mackay says it remains particularly true of Hispanic consumers. In fact, according to 2023 Hass Avocado Board (HAB) research, 93% of Hispanic shoppers buy avocados, with over half “heavy or super-heavy” repeat purchasers.

Calavo’s Shore agrees. “Ripe fruit always outsells green fruit at retail,” he says. “Consumers are looking for high-quality fruit that is ready to consume today, tomorrow or the next day.”

However, Mission’s Anazawa says it is important to give shoppers options when it comes to ripeness. While some consumers prefer ripe-and-ready, others prefer avocados that ripen over the course of a week. Mission recommends stage three fruit, which ripens in two days, although it emphasizes the importance of distinguishing ripe fruit from harder fruit on display.

Based in Mission Viejo, CA, HAB promotes avocado consumption throughout the U.S., supporting the work of producer organizations such as AFM and CAC.

HAB’s senior business insights and data services manager, Alejandro Gavito, says education is key for shoppers to be comfortable when choosing their desired ripeness. “Teaching ways to gauge ripeness and offering ripening techniques could make it easier for shoppers to make their selection in-store and increase avocado purchases for retailers.”

According to AFM’s Bazan, over 70% of shoppers prefer to pick their own avocados, therefore having fruit available at different stages of ripeness is crucial. “Our recommendation is to offer both ripe/almost ripe avocados that yield to gentle pressure and have a darker color; and green avocados that are firmer and will be ready to eat in three to four days, so shoppers can pick those that meet their needs,” she says.

Bazan recommends supporting displays with educational signs on how to speed up or slow down ripening as required.

Likewise, CAC’s Splane advocates a two-ripeness merchandising approach, supported by CAC’s educational program for helping consumers understand how best to ripen avocados at home.

BEST BAGGED OR LOOSE?

For Marquardt, the best retailer programs offer a mix of both bulk and bagged avocados. The first option allows customers to select the type of avocado and stage of ripeness they need, while bagged avocados are very effective at increasing purchase size. In fact, bagged avocados have been Fresh Del Monte’s fastest-growing program for several years and are still gaining traction.

Similarly, Mackay says innovative packaging from Fresh Del Monte, such as assorted-size avocado packs, is helping cater to consumer needs and reduce food waste.

According to Villita’s Ybarra, the biggest growth his company has experienced in recent seasons has been in the bagged segment. “Bagged has grown every year,” he says. “Customers want to buy more than ever.”

Ybarra reveals that bagged avocados are a large part of a projected 1-3% sales growth for Villita in 2024.

Mission’s Anazawa agrees demand for avocado bags is growing nationally, noting that bagged sales have doubled over the past five years (Circana) and have contributed to overall category growth. However, she notes there are regional differences. In the Northeast, large avocados are more popular, while in California and Texas — more developed avocado markets — some retailers carry as many as three different bulk sizes in addition to bags.

“The way avocados are displayed in stores can vary regionally, reflecting consumer preferences and awareness of avocado origins,” says Mackay. “Consumers are becoming more discerning about the taste and texture differences of avocados from specific regions, such as Mexico and California.”

Although it’s true to say loose is holding its own, HAB figures demonstrate bagged has contributed significant growth to the avocado category in recent years, according to Gavito.

Bagged avocado retail dollar sales increased 68% from 2019 to 2022, and Gavito says HAB continues to see growth coming from the bagged segment.

Smaller sizes (4046s) in four- to five-count bags accounted for 54% of total bagged avocados volume in 2022, he adds. He notes, however, that in some of the biggest growth regions, such as California, some unique configurations are taking hold. In particular, the volume of the seven-count bagged option has grown 1,214% since 2019, primarily in California, the west and south-central regions.

CAC’s Splane agrees bagged avocado sales are at their strongest in California, adding that 60% of shoppers in the state bought bagged in 2022 compared with 49% outside of the state.

But whatever options shoppers choose, Mission’s Anzawa says it should be remembered avocados are a basket builder. The average basket value with avocados is $90, or 91% higher than those without (Numerator Insights), she says, adding that the fruit has a high purchase affinity with complementary produce items and snacking foods, meaning avocados boost value throughout a grocery retail space.