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Joe Dugo looks back on Naturipe’s first year in the avocado business
“It was a typical start-up year and a very challenging market”
Naturipe Avocado Farms is officially just over one year old now. “The first year, we built out the operational side. We set up ripening facilities and bagging facilities as well as built our team,” says Joe Dugo with Naturipe Avocado Farms. In addition, last year was one of the highest markets ever seen, creating a perfect storm of no supply. “ It was a very challenging market, to enter with our new business, but being grower-owned, it offered us some advantages from which we were able to firmly establish ourselves.”
Four distribution facilities
Dugo looks back on 2017 as being a typical start-up year. Starting 2018, the company is marketing very aggressively to retail and foodservice. “We are forging ahead with our sales and we have distribution in Los Angeles, CA, Pharr, TX and Kennett Square, PA. We also have a facility in Florida that we use seasonally for Peru. We are bringing product into four ports right now, which is a significant advantage for us.”
Own production and packing houses
Naturipe’s avocado business model is the same as the company’s berry model. The business is owned by growers. Talsa is the company’s Peruvian avocado partner. Naturipe works with Baika in Chile and San Tadeo is the company’s Mexican partner. “We own 100 percent of our own production and packing houses, so we are not buying and selling fruit like most others do. We feel it is our differential advantage and provides a factor of stability into a market that is not stable,” commented Dugo. All of Naturipe’s avocado growers are second and third-generation growers. “They have been growing for 20 years but were packing under different labels and for different importers. Now, the focus is on building unified distribution around the Naturipe Brand and the Naturipe Way of being grower owned.”
2018 production looks promising
Mexico is producing right now, and the country has a big crop this year. “Although we don’t have a California deal, California’s crop will also be about double from last year. Altogether, 2018 is going to be much more stable,” Dugo said. It will be a good avocado year as prices will be lower and interest from consumers will be up. For Naturipe, Peru will start late April and harvest through August. Usually when Peru and California finish, markets tend to spike since Mexico is the only game in town. “Between September and January, we also bring in avocados directly from Chile. However, it’s a different market as it is all program business,” Dugo mentioned.
Peru and Chile are the fastest growing markets for Naturipe Avocados by far. “Our Chilean volume will triple in three to five years, and likewise, our volume from Chile is going higher.” The goal for Peru is to stretch the season with an earlier start and a later finish as Mexico has been such a challenge for them in the last few years. Mexico is a steady market for Naturipe and the company plans to venture into Colombia.
Shipping from across the globe
Naturipe ships its avocado’s to North America, Europe and Asia. “Asia is becoming a big market for us that we serve out of Mexico,” Dugo said. Peruvian fruit goes to Europe, the US as well as Asia. The Peruvian population doesn’t really consume Hass avocados. Just about everything they pack leaves the country, making them a large exporter. “I foresee North America becoming more and more important for Peru”. As their production grows, the US market will become more and more attractive to Peruvian growers. Chile, on the other hand, can internally consume a large percent of what they grow. This combined with strong established European and Asian business means that a smaller percent of their crop will reach the U.S market.
Europe is profitable for Peru
In the short-term, Dugo is not sure how much fruit Peru will send to the US this season. Lower prices are expected in 2018, so the US market may not be as attractive as it was in 2017. They may opt to ship more fruit to Europe where pricing is generally better. If the US market has heavy supplies of Mexican and California fruit, we may see less market fruit arriving. Importers will most likely stick to program business for their Peruvian avocados.
The feedback on Naturipe’s new avocado program has been very positive. “The trade knows Naturipe and our customers love the Naturipe avocado label. A lot of our customers were berry customers and have added our avocados,” finished Dugo.
For more information:
Naturipe Avocado Farms
Tel: (+1) 215-938-1782
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