Convenience Rounds Out Guacamole Growth Prospects

Packaged guacamole sells because it’s quick, it’s easy and it’s good.

Originally printed in the May 2022 issue of Produce Business.

Guacamole offers retailers a range of merchandising opportunities for produce departments and can pull in sales based on impulse, regular use and party occasions — dollars that otherwise might go to the snack aisle.

When guacamole is considered by produce department pros, fresh packaged products are just as important as combining ripe and unripe avocados to balance options for shoppers’ preferences. Consumers consider purchasing guacamole for a wide variety of occasions, such as personal snacking, spontaneous gatherings, planned parties and meals.

Often an impulse purchase, fresh packaged guacamole needs a conspicuous placement in the produce department to garner purchases that otherwise would be made in the middle store. At the same time, mixes that make preparing guacamole easier and more convenient are another way to nudge a sale.

Displays and cross-merchandising that give shoppers easy serve, easy prep and made-from-scratch product choices address not only different shoppers, but different needs. Even the most determined home guacamole maker may have occasion to look for faster means to get the dish on the table, which can mean refrigerated packaged guacamole or mixes.

More consumption choices can enhance the ability to drive purchasing, as produce departments can use everything from point-of-sale material and website recipes to social media to old-fashioned table sampling, to suggest more ways to enjoy guacamole.

Guacamole helps expand avocado products in a supermarket. The popularity of guacamole in the Florida markets served by Freshfield Farms, says David Deloach, chief executive, is such that the supermarket operator only sells conditioned avocados in its two stores, one each in Orlando and Jacksonville, because customers are most likely going to use them in guacamole.

Grocery stores and supermarkets are offering customers more guacamole choices to build sales. Although it offers store-made guacamole at many of its stores, Fresh Encounter, Findlay, OH, also offers local and national brands as well, says David Rhodes, the company’s director of produce and floral.

Brooklyn Harvest in Williamsburg, Brooklyn, offers various merchandising and promotional initiatives to move both avocados and guacamole. Summer promotions are important for the store, particularly given its emphasis on fresh produce. So, although stone fruit and watermelon may get conspicuous seasonal placement, for sampling, there’s one item that surpass all others in popularity and, by extension, opportunity.

“In summer, it’s guacamole,” says Aridio Guzman, produce supervisor for Brooklyn Harvest stores.

MARKET IS HUNGRY FOR GUAC

The popularity of guacamole is gaining around the world, according to Research and Markets, a Dublin, Ireland-based market research firm, which states the global processed avocado market is likely to enjoy a compound annual growth rate (CAGR) of around 7.5% from 2021 to 2027.

MegaMex Foods, Orange, CA, makers of WHOLLY Guacamole, has seen elevated guacamole demand and consumption this year, according to Justice Davis, associate brand manager, who says in the latest six months, the category is up 14% in dollar sales. “Growth is primarily being driven by the classic/smooth products in terms of absolute change, but chunky/homestyle is growing at the fastest rate, which indicates that chunkier guacamole is on trend with guac lovers.”

WHOLLY continues to push its chunky products with an initiative known as ‘Get Chunky,’ and has seen “consistent distribution gains” the last year,” Davis adds. “Though all heat levels are growing, mild seems to be the most preferred. However, we understand that spicy consumers generally have strong loyalty and high repeat purchase rates.”

“The pre-packaged, ready-made guacamole category continues to grow,” says Jay Alley, vice president, Fresh Innovations, Rhome, TX. “You can see this by the multitude of brands that have entered the category since 2007. With the popularity of avocado, and with the acceptance of the ease and taste of ready-made guacamole, consumers continue to purchase and are more apt to try different flavors and styles.”

Alley says from the data they’ve seen, consumers do like spicy options, “but for the family purchasing guacamole, they prefer the homemade-tasting items that contain tomatoes, cilantro and onions. For Yo Quiero!, our top-selling items are our Original Guacamole and our Chunky, which is made with tomatoes, cilantro, onions and spices.”

WHAT’S DRIVING GROWTH?

The brand team at MegaMex Foods says several factors are driving the growth of refrigerated packaged guacamole in produce sections: Foremost, as consumers have become increasingly more comfortable with eating guacamole, the Mexican category continues to grow in both retail and food service. Then, the consumer need for convenience has reached the guacamole category and driven purchasing of packaged refrigerated products.

In addition, because consumers enjoy guacamole at gatherings, and because guacamole is a big favorite for Super Bowl and Cinco de Mayo parties, it has become more common in consumer homes, which has led to consumers seeing more ways to enjoy the treat, even on an everyday basis. MegaMex Foods’ Davis says products such as 2-ounce mini packages have become on-the-go options, while consumers purchase larger sizes for use as spreads and ingredients.

Concord Foods, Brockton, MA, provides guacamole mixes that make producing the end product easier, “which is why these mixes are so popular,” says Samantha McCaul, the company’s marketing manager. “Consumers can easily make perfectly spiced guacamole in minutes. All they do is combine Concord’s mix with two ripe avocados. Guacamole is used in so many recipes today, from the traditional dips and toppings to sandwich spreads. Yes, it remains popular during parties and special occasions, but it’s become an everyday recipe for many.”

She says Concord Foods Guacamole Mix has a shelf life of 18 months from the date of production, and a new organic mix will be available in June 2022.

At a time when consumers regularly look for new and novel variations, flavor is an important consideration. Early this year, Del Monte Fresh Produce relaunched its Homestyle Guacamole with new flavors: Jalapeño and Tomato, Classic Lime and Garlic, Mango and Lime and Black Bean and Corn. Each comes in 8-ounce trays, while Jalapeño and Tomato and Classic Lime and Garlic also come in packages of four 2-ounce trays.

While flavor is a main advantage of fresh refrigerated guacamole, MegaMex Foods considers other factors, such as package sizes, as important in WHOLLY Guacamole growth. MegaMex has a 15-ounce bowl for gatherings, 7.5-ounce for a family taco night or the 2-ounce mini that can work as a salad addition or as an after-school snack.

Alley agrees that multiple sizes address multiple opportunities.

“Yo Quiero! and most ready-made guacamole and avocado products come in three sizes: mini, around 2 ounces, cup, around 7.5 to 8 ounces and tub/party size, 14 to 16 ounces. Depending on the meal/eating occasion, each size fits its usage. Mini for a snack or a piece of avocado toast. The cup size is perfect to share for dinner or girls’ night in. And the tub is the right size for larger parties and tailgates,” he says.

PROMOTE DURING PEAKS, BUT PUSH YEAR-ROUND

Super Bowl and Cinco de Mayo remain critical sales times, and prompting shoppers to grab fresh guacamole when they’re in the produce department for those celebrations may generate additional sales right through the year.

“Yo Quiero! guacamole sees a huge sales lift during Super Bowl and Cinco de Mayo, but we continue to see growth year-round,” Alley says. “With consumers looking for ready-made guacamole and avocado products to eat throughout the day, we see continual sales lifts due to the popularity of the fruit.”

McCaul says that Concord products continue to get a boost from traditional guacamole use occasions even if they enjoy full-year demand.

Alley says produce managers have handled fresh packaged guacamole creatively.

“Produce managers do a great job merchandising their line of guacamole products,” he says. “We’ve seen that during peak buying times, retailers move the guacamole to refrigerated cases at the front of the store with chips and other items to help with sell-thru. Also, we’ve seen stores create chip and dip displays around guacamole to encourage incremental sales during non-peak buying times.”

MegaMex Foods’ Justice says retailers should consider that products such as fresh packaged guacamole should get different treatment depending on how they are sold.

“We recommend that guacamole be positioned next to other refrigerated dips and dressings within the produce space,” she says. “However, the digital and e-commerce space has opened a lot of opportunity for cross-merchandising. For example, we know that consumers love eating guac as a dip with chips and veggies, a dip which would be ideal for cross-promotional opportunities within the digital space.”

“Each ready-made guacamole brand does a great job promoting its own products,” Alley says. “At Yo Quiero! we utilize social media and digital ads to drive traffic into the stores to find and try our products.”

For its part, MegaMex sees social media as a big opportunity. As retailers leverage their social media platforms and digital capabilities to drive awareness around brands, WHOLLY Guacamole has good results participating in grocery and supermarket programs in store, in circulars and online that include recipes and special offers.

At Concord, McCaul says they’ve seen some “excellent displays at retailers with signage, recipes and cross merchandised products, such as tortilla chips. During events such as the Super Bowl, many retailers will utilize social media to promote avocados and guacamole mix.”

REGIONAL PREFERENCES

Although guacamole is popular throughout the U.S., consumption isn’t evenly distributed, so aggressive merchandising and promotion continue to be warranted.

“When it comes to regions, currently, we’ve seen an uptick in sales on the Eastern Seaboard,” Alley says. “And really, they are catching up to the rest of the country when it comes to consumption. They have the highest gain in avocado and ready-made guacamole in the country.”

Justice says the Southeast region has experienced the most growth in the last year, followed by the West (excluding California).

“California has the highest opportunity for growth within packaged guacamole, which can be attributed to consumers making their own guacamole at home,” she says. “For WHOLLY, we have room for expansion in the Northeast. However, our biggest challenge is to reach consumers who are still making guacamole at home due to the lack of perceived freshness of packaged. Our marketing tactics are aimed to educate consumers around WHOLLY’s brand promise.”

Scott Wiggans, produce director, Lazy Acres Natural Market, Santa Barbara, CA, demonstrates that Justice may have a pretty good case. He says the retailer offers refrigerated packaged guacamole in other parts of the store, however, in the produce department, it is made by Lazy Acres from the kind of avocados it favors.

“We make four different varieties of guacamole in-house using our jumbo organic avos,” he says. “The guac category is a huge seller for us in our chop shop refrigerated cases.”