“Demand for avocados is incredible,” said Mike Sanders, an avocado grower and handler from Southern California. Sanders manages 1,500 acres of avocado production in San Diego County, and he noted that demand has been as high as it's ever been. The reason for that increase has been due to several factors which include increased marketing efforts by the California Avocado Commission and Hass Avocado Board, changing tastes on the part of consumers and the increasing popularity of Mexican cuisine, in which avocados feature prominently. But a large reason for the surge in demand has had to do with the way handlers have been able to bring a steady influx of fruit to consumers throughout the year.
“The biggest thing that helped consumption was the importation of avocados,” said Sanders. “Before, you couldn't get avocados for four months out of the year, and then you had to deal with the high prices at the start and at the end of the season.” Those price fluctuations made it hard to get the product to consumers easily, and consumers weren't taking to avocados in large numbers partly because they didn't see them as a mainstay among the rest of the produce in the supermarket. When consumers were able to get avocados, they weren't guaranteed to get fruit that was in peak condition. That started to change when imports from Mexico and Chile rounded out supplies of fruit. With different waves of production coming from different countries, handlers could better supply retailers with quality fruit throughout the year. Combined with a strong marketing push to drive awareness of the product, demand began to grow.
“In the 1990's, there was a push to make sure all avocados were ripe and ready to eat,” said Sanders. “So we pre-conditioned the avocados, and making sure every piece of fruit is ripe has helped with movement.” Where Sanders was used to seasons where he moved 8 million pounds of avocados, he now sees movement in the range of 40 million pounds. Prices have also been good, but that hasn't always translated into great returns.
“Labor costs have gone up quite a bit,” said Sanders' associate, Chris Ambuul. “That's the thing I'm most concerned about.” But it's not the only concern Sanders and Ambuul have. They also have to deal with high water costs and California's regulatory minefield. Those are the things that have been keeping handlers like Sanders and Ambuul from turning a staggering increase in consumption, and generally good prices, into admirable returns. In fact, while prices and consumption have gone up, the margins for growers and handlers have remained the same. But rather than lament the current situation, Sanders thinks it's a great time to be in the industry because of the promise the market holds.
“We're selling a good, healthy item,” said Sanders. “It's just growing pains that we're going through as an industry, and we'll be great when everything settles if we get it right.” Getting it right means getting accustomed to larger amounts of fruit coming in and getting avocados to retailers and consumers in a fast manner. Sanders stressed that the demand for avocados is there, it's just a question of growing the fruit and getting it to consumers in a way that makes it profitable for everyone involved.
“There are cycles to the industry,” explained Sanders. “The market was not good seven years ago, but now we're shipping a lot more and prices are up.” Rising demand and rising prices spur growers, both in the US and abroad, to plant more acreage to feed a hungry market. With the health benefits of avocados drawing even more people to the fruit, demand will likely keep growing. The key to success will be to find ways to take advantage of that demand.
“Even in this tough economic period, the rising popularity of avocados has just been incredible,” said Sanders. “If you can just stay in the business to the point where prices cover your costs, then I think there's a very good future.”
For more information:
Mike Sanders
dms@ssgms.net
Chris Ambuul
chris@ssgms.net