Everyone wants to eat avocados. In the US alone, consumption grew by over 100% between 2010 and 2020, according to a study by Rabobank, and the sales evolution continues to increase. According to the Food and Agriculture Organisation (FAO) of the United Nations, at the end of this decade the US will control 40% of the world avocado imports, followed by Europe and, increasingly, destinations such as Australia, China and other Asian and Middle Eastern countries.
There is no doubt that one of the most important challenges of the sector involves increasing production. The problem is that on a global scale there are not many regions that have a suitable climate for this crop. And this year, specifically, the offer has been reduced in different sources as a result of the weather conditions (the phenomenon of La Niña in Peru, water shortages in Spain…) and other circumstantial factors that have repercussions on production and marketing, such as the shortage and increase in price of fertilisers due to the Russian invasion of Ukraine or the civil unrest in Peru.
The global avocado map is showing an increase in its worldwide offer, with new agents such as Australia and New Zealand. The forecasts indicate that in 2030 the global production will triple that of 2010, reaching 12 million tonnes.
According to the report ‘The international avocado market. Opportunities, challenges, offer, demand and trends,’ prepared by Rabo Finance, South America has become the second most important avocado supplier, after Mexico.
With a production of over 2.4 million tonnes in 2021, Mexico is the main avocado producer and exporter in the world, with 48% of the sales (5% less than in 2020). Currently, Mexican avocados are eaten in 51 countries, and their main destination is the US, with 1.28 million tones and a value of 2,473 million dollars.
In 2022, avocados were the third product in value for Mexican exports with 3,188 million dollars, according to data from the Secretary for Agriculture and Rural Development (SADER) of the Mexican Government collected up to November. Lager beer, with 5,585 million dollars and Mescal tequila with 3,982 million dollars were the only products ahead of avocado exports.
Following Mexico, Peru holds 22% of the world sales and is the first South American producer. 58% of its volumes are sent to Europe, over 300,000 tonnes in 2021, supplied over the 12 months, with the largest part between May and September.
The remainder of the Peruvian production goes to the United States (18%), followed by other Latin American countries (13%) and Asia (10%).
The large size of its plantations and the commitment to extend its commercial window is generating new opportunities for the Peruvian sector, which is exploring new markets.
In South America, the second producer in importance after Peru is Colombia, exporting 94% of its production to Europe, and which has experienced significant growth over the past 5 years that could mean it might take over the second place in a short time. To do this, it has to improve one of its weak points, the complicated internal logistics.
Chile, with a mature industry, exports 68% to Europe, 17% to other countries in Latin America, 8% to Asia and 6% to the United States. Amongst the barriers for the Chilean industry are the problems of drought and lower yield, which have derived in a low growth rate compared to other origins.
China, the ‘sleeping’ giant
In Asia, there is local offer and currently the largest demand for avocados lies in Japan (with a predominance of Mexican avocados) and Korea. China has not seen an appreciable ‘hunger’ for this product yet, but the demand is on the rise. In 2021, in spite of the COVID restrictions, it imported over 41,000 tonnes; a figure that is close to the 44,000 tonnes imported in 2018. The consumer profile is mainly female, under the age of 35 years and resident in top level cities.
According to a report by the USDA, Peru is still China’s main supplier with 26,000 tonnes in 2021 and 64% of the imported avocados, followed by Mexico and Chile, countries from which they imported 13,400 tonnes, while other countries (for example, New Zealand, Colombia, the Philippines, the United States) are considered as new backups. The latest to be introduced to this world is Kenya, which gained access to the Chinese market on the 1st of June last year. Kenya is the largest African avocado producer, with 84,000 tonnes of avocados exported to the world in 2021. “Marketers believe that Kenya could become a highly competitive source of fresh avocados if the quality of the fruit is good and the price is reasonable. In some trials carried out last summer in Shanghai, the Kenyan fruit arrived in better conditions than its Peruvian counterparts and with a price that is 15% lower,” the report by the USDA highlights.
Avocado consumption in China is strongly influenced by the importers and retailers, who play an important role in the purchase, distribution and marketing. Imported avocados have had a good reputation for more than a decade. The key to the success on this market lies in maintaining a higher quality control, constant supplies and reasonable prices.
Mr. Avocado, a joint venture by Mission Produce, Pagoda FruitStores and the distributor Lantao International, is the only shipper/receiver in China with a brand with fruit that comes from several producing countries. It is very successful in the marketing of imported, fresh, ready-to-eat avocados in China, mainly through its high range retail distribution network and it covers over a fifth of the total avocado market share in China.
In the case of the Mr. Avocado brand, they are packaged in transparent boxes containing 2, 4 or 6 pieces, depending on the consumer preferences in each region. The most popular size is 180 grams per piece, while 220 grams is considered a large fruit. The most popular retail package contains two pieces (160 g each) at 2.90 dollars per pack. In addition to the brand products, the distributors also handle unbranded avocados and often, they package them in their own installations.
As well as the increase of imported avocados, the Chinese national production of Hass is also growing, which started 6 years ago in Yunnan, (the largest avocado production area in China with 4,000 hectares cultivated from the end of September to the beginning of March) and it is expected that this will start speeding up soon. In Hainan, Guangxi and Guangdong some local varieties are being cultivated.
Forecasts indicate that Chinese fresh avocado production should reach 20,000 tonnes over the next five years. Although it is still beginning, it has room for improvement and it is limited by the availability of land suitable for growing the fruit, and by access to reasonably-priced water. The production costs, particularly of the land and the labour are increasing, the report states. In Yunnan, the avocado crops cost on average between 25,380 – 30,000 dollars per hectare.
A long history
Today, the avocado is one of the most highly appreciated fruits, both as a culinary ingredient and as a foundation for beauty products. Also known as ‘palta’ (Quechua), cura, aguacate (Spanish) or abacate (Portuguese), this popularity has multiplied thanks to its nutritional properties, which are highly beneficial to health.
Its origin dates back over 10 thousand years, in line with the vestiges found in a cave in Coxcatlán, Puebla, where remains of the Persea American Mill species were detected. However, its worldwide growth dates back only a few decades and its ‘explosion’ has occurred thanks to social media.
In Spain, there was very little consumption of this subtropical fruit until a few years ago, although the first mention of the avocado in our country appears in 1842 in the ‘Diccionario de Agricultura y Economía’ (Dictionary of Agriculture and Economy), where a reference is made to the fact that in 1572 there were avocados on the eastern coast of Valencia and Alicante.
In the book ‘Historia del Aguacate Español’ (History of the Spanish Avocado) by Julián Diaz Robledo, it is stated that the first box with avocados from the Spanish mainland “put on sale with a great commercial value in our country, was in October, 1960.” The fruit came from the Rancho California (Vega del Río Verde) in Almuñécar and they cost 120 pesetas/kg.
Social media and aspirational consumption
In Latin America, avocados are a staple in the shopping basket. On other markets, such as the Spanish one, this item has arrived relatively recently, but far from being a passing trend or fashion, it has clearly shown that it has come to stay.
As the dietician and food technician, Aitor Sánchez affirms in the video ‘Trends in nutrition for 2023’ on his Youtube cannel ‘Mi Dieta Cojea,’ “avocados managed to become fashionable when they had everything against them. Nobody could have predicted that they were going to be as successful in a context like ours. In Spain, they did not form part of our gastronomy, there were no typical reference recipes. Later on, there have been some imported ones, such as guacamole, which has seen a very high growth rate over the past 5 years. In addition, it is a fruit that is not as convenient to use as others are, such as the mandarin, and it is used more as an ingredient (in other dishes)”. Other barriers are its price and lack of knowledge about it. “It is more expensive than other products and you have to know how to handle it, learn when it is ripe. In spite of all this, the avocado has managed to become fashionable.” According to Aitor Sánchez, a good part of this boom lies in the “bombarding on social media” of “aspirational-type” content linked to avocados.
