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Retail sales of avocados increasing by 72 per cent each year in China

In the next three years, China could pass the United States and become the number one avocado consumer country in the world, according to major retail company Pagoda.

General Manager Peter Zhu told the World Avocado Congress in Colombia that for a young avocado country, demand in China is increasing so fast, retail sales of the fruit are increasing by 72 per cent each year. He recalled that back in 2016, the company formed a joint partnership with Lantao International and Mission Produce to form the Mr Avocado brand. Since then the product being offered to consumers has transformed dramatically.

"In 2016, the only avocados selling in Pagoda were green and hard," Mr Zhu said. "In early April 2017, we started to sell ready to eat avocados in all our stores, and by 2018, 89 per cent of the stock in Pagoda stores were ready to eat. Now in 2019, all 4,000 Pagoda stores only sell ready to eat avocados. No more green fruits."

He added that the trend is occurring in most of his high-end retail and online competitors, and everyone is selling ready to eat fruit. However, the introduction of the riper fruit has not come without its challenges; in the previous financial year (2018) Mr Zhu revealed sales were slightly down on the previous year, due to problems with consistency from the supplying countries.

"Some fruit that is shipped to China is not consistent," he said. "At the wholesale market, people ship too much, or put good and bad fruit together. So, for our ready to eat fruit, our (direct) costs are higher than at the wholesale market."

His concerns were echoed by Mr Avocado President and CEO John Wang, who says some of the fruit being imported has low dry matter, and inconsistencies within the cool chain process.

"Some people are shipping 17-18% dry matter to China, and that will never ripen," he said. "Another problem is black flesh. Once you open the shipping container, the cool chain is broken. In some cities, the temperature in summer can reach between 30-35 Celsius. In some second-tier cities, the distributors load the truck with other produce like bananas and apples. It can also take the avocados 4-5 days to reach the retailers and the temperature has been going up and going down. So, the consumer buying the fruit in the store, may be throwing up to 50-100% into the garbage, because the inside is black. This is very bad, and a shocking experience for China, who is a new lover of avocados. It's a very expensive fruit, and people want to try it, but not if 50% goes into garbage."

Both stressed the importance of everyone along the supply chain working together and professionally to grow Chinese avocado sales, and capitalising on the sharply increasing demand.

Mr Avocado has its own ripening centre in Shanghai, which has four ripening rooms, which can fit 80 pallets, or four containers. The company tries to do sourcing, logistics, importing, ripening and distributing all from the one location.

In 2018, Pagoda had 4,000 fresh fruit retail stores, and in five years that is expected to grow to 10,000 stores in China – in 20 provinces and 80 cities across China. Mr Zhu explained that quality and taste are the main focus areas for his company, and admitted avocados are a new experience for many Chinese consumers.

"For fresh fruit, there are two different types; one is the 'sweet-tasting' fruit, and the other is avocados," Mr Zhu said. "There are so many sweet fruits, but the only unsweet fruit (sold at Pagoda) is avocado. It is a healthy fruit that we want to promote big time in our Chinese stores. We want to do a lot of promotions with all our members and general customers to let them know what an avocado is and how to eat it. We want to give them the best experience with an avocado, but we need the education."

Mr Wang estimates that by 2021, China will be importing 70 container loads per week, and believes there is potential to grow that number to 700 loads per week in 15 years’ time, making the country the largest importer in the world. He says it has been a main objective for Mr Avocado to promote the ready to eat avocados, by using professional chefs to form local recipes, and create new interest.

"We have even hired people from Mexico to do tours of China," he said. "We have done some on-site supermarket promotions, and we have created a very popular video for Everything Fresh, which is the best home fresh delivery in China. So, Mr Avocado ready to eat will be sold in about 80 per cent of the top retailers across China."

Pagoda also has a number of value-added products, including Mr Avocado soy sauce, and soy sauce with wasabi, which is under a registered trademark.

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