Avocado toast, avocado face masks, and avocado desserts are only some of the latest trends in the U.S. growing the demand for the delicious fruit and Peru is ready to provide.
Marketing for Peruvian products has hit the streets of the U.S. capital, Washington DC. One of the authors of this commentary has seen posters promoting Peruvian avocados plastered on the sides of DC public transportation metro-buses, which show aPeruvian avocado, with the renowned Machu Picchu in the background and the phrase “Avocados from Peru” in large font.
A web address (avocadosfromPeru.com) links to a site maintained by the Peruvian Avocado Commission, headquartered in Washington DC. The commission is part of the Hass Avocado Board, an organization that has a membership of some 20,000 producers and importers from California, Chile, the Dominican Republic, Mexico, New Zealand, and Peru all involved in the U.S. Market.
A Growing Market for Avocados
The increase in demand and trendiness of the fruit has greatly affected the popularity of avocados, particularly in the coveted U.S. market (a 2014 USAID report explains that “the U.S. is a negligible avocado exporter”, so practically all of the 245,000 MT of domestic production is consumed domestically).
As an example of how this fruit has gone viral, at the time of this writing, there are 6,424,857 public posts under the Instagram hashtag “avocado” with posts including colorful recipes by health gurus, tutorials on how to implement avocado into a beauty regimen, and even avocado art. According to the Hass Avocado Board’s report on market trends, 52.2% of US households purchased avocados in 2016, a 0.5% percent increase from the prior year, and one that is expected to grow further during 2017.
While grocery stores continue to possess the main share of avocado purchase dollars at 73%, Wal-Mart has been the main growth driver in trends with +$10.7 million in incremental purchases and 28.9% of avocado-purchasing households buying from its stores during 2016. In the First Quarter of 2017 alone (ending on 3/26/17), avocados headed the list of top trending fruit.
The Peruvian-US avocado trade has grown rapidly in the last six years.
Peru has projected to ship about 150 million pounds of avocados to US markets during this June-August season, a number more than twice the amount of its 70 million pounds of shipments last year. An off-bearing year in California coupled with decreasing shipment volume from Mexico in recent years has allowed this increase. With more than 10,000 hectares of avocado farms along the coast of Peru, heavy rains due to El Niño in March were a big concern for growers. However, the damage, mostly done to roads and bridges, only set back the harvest by a few weeks. Even with the setback, Peruvian avocados will be welcome this season, as this year’s inconsistent Mexican avocado crop season ended in June.
Keep In Mind: Mission Produce
Mission Produce of Oxnard, California has been and continues to be, a pioneer in the Peru-US avocado trade. Following their initial import of Peruvian avocados to the US in 2011, they began planting 6,500 hectares of Hass avocados in Peru in 2012, and most recently, in 2015, Mission completed the world’s largest avocado packing facility in Chao, in Peru’s La Libertad region.
The joint venture between Mission Produce and the Gonzalez Group operates under the name Avocado Packing Co.; which has proven to be a win-win initiative. The $30 million packing house is massive, covering more than 12 acres. It’s packing capacity is even more impressive, as it has the ability to handle 30 tons of avocados per hour when operating at full capacity with 60% to 70% of the fruit destined for US markets.
In line with Peru’s commitment to sustainable projects (see the authors’ article “Peru and Green Energy”) the facility features an MAF Rodaoptical sorter, conserves energy by incorporates motion sensitive lighting, and will be LEED certified. There are plans to incorporate a second packing line sometime in 2017 that would increase packing capacity twofold, to 60 tons per hour.
A Competitive Market
As a final point, it is worth mentioning that apart from the U.S. market, Peruvian companies are also looking for other customers in other parts of the world. For example, the Peruvian daily La Republica reported in 2015 about Peruvian avocados en route to the big Chinese market. More recently, in mid-July, the daily Gestion explained how a potential free trade agreement with Australia will allow the import of eight Peruvian products, including avocados – the newspaper reported that the Australian avocado market is worth US$ 72 million.
In spite of these successes, Peru is not the biggest avocado exporter at the global level.
According to a March report by the Mexican daily El Financiero, Mexico has the largest production of avocados, followed by the Dominican Republic, Colombia, and then Peru, in fourth place. It is worth mentioning that Mexico’s place as the biggest global exporter, and its access to the U.S. market, may be in jeopardy, not due to anything wrong with the product itself but rather due to politics. Namely, U.S. President Trump has discussed the idea of a tax on Mexican imports, which would include avocados; and, as CNN Money explains “in 2017, the U.S. is expected to get about 80% of its avocado supply from its southern neighbor, according to Tom Bellamore, president of the California Avocado Commission. That’s 2.14 billion pounds of avocados.”
It’s unclear if Washington-Mexico City relations will deteriorate to the point that Mexican imports are taxed if they want to enter the U.S., but if such a situation does happen, avocado exporters like Peru could greatly profit.
In various articles for Living in Peru, the authors have covered some of Peru’s signature agricultural exports to the world (particularly the U.S. market), such as blueberries, quinoa and, now avocados. Indeed, agriculture and minerals continue to be the cornerstone of Peruvian exports, which means that the country’s economy is at the mercy of either a precious mineral (e.g. copper) drying up, or a massive weather pattern destroying crops. Thankfully, the latest El Niño in Peru did not significantly hurt the avocado crops, but a similar situation could occur in the near future.
For the time being, Peruvian avocado growers and exporters will continue to profit from U.S. consumers’ growing interest in this crop.
The Peruvian Avocado Commission’s feature of Peruvian avocados on Washington DC’s public transportation system, with the always-recognizable Macchu Picchu in the background, is just one example of the ingenious ways agencies are successfully marketing this crop in the U.S. When Americans eat avocados, they should think beyond California and Mexico, and think of Peruvian avocados.
Alejandro Sanchez Nieto is a researcher who focuses on geopolitical, military, and cyber security issues in the Western Hemisphere. Follow him on Twitter: @W_Alex_Sanchez
Brittney J. Figueroa is a recent graduate of the University of California, Santa Barbara with a Bachelors degree in Global Studies, and a Minor in Latin American Iberian Studies.
The views presented in this essay are the sole responsibility of the authors and do not necessarily reflect those of any institutions with which the authors are associated.