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OPN Connect Newsletter 280 · August 4, 2022

Avocado Prices Drop; Promos Should Be Forthcoming


Prices for both organic and conventional avocados have fallen significantly from their stratospheric levels prior to the July 4th holiday period—and there is the expectation that promotional pricing will remain in vogue throughout the rest of the summer, fall, and winter.

Patrick Lucy, president of Del Rey Avocado Company, said that while California’s organic avocado production “is pretty much done,” Mexico and Peru have solid supplies that will allow for promotions moving forward. He said the most popular sizes (40s and 48s) were still commanding an FOB price in the high $50s and into the $60s on organic fruitbut that was at least $20 lower than the typical late spring/early summer pricing.

Global Organics Aug 2022

Patrick Lucy, President, Del Rey Avocado

Prices for organic avocados have fallen each week for the previous month, and while pricing appears to have stabilized in early August, “there still should be room for it to come down in the fall when the sheer volume from Mexico kicks in,” Lucy said.

Representatives of the avocado industry in Mexico have indicated that the 2022/23 season, which began on July 1, could bring a volume increase of 25 percent over the previous 12 months, when volume fell short of expectations.

Chelan Aug 2022

Del Rey Avocado organic Hass avocado

“I expect that organic promotions will pick up after Labor Day,” Lucy said. “And there should be promotional opportunities throughout the fall and winter when avocado movement typically slows down a bit.”

Gahl Crane, sales director at Eco Farms, noted the drop in the FOB price on organic avocados over the past several weeks and said understandably the drop in the retail price is lagging. He said retailers typically work several weeks in advance, so it takes time for the current FOB price to be represented on the supermarket shelf. He agreed that Labor Day is a good estimate as to when organic promotions will return in good numbers.

Misionero Aug 2022

Gahl Crane, Sales Director, Eco Farms

“I expect that organic promotions will pick up after Labor Day. And there should be promotional opportunities throughout the fall and winter when avocado movement typically slows down a bit.” -Patrick Lucy

The Eco Farms executive keeps a close watch on the avocado ad activity around the country. During a big promotional week such as Super Bowl or Cinco de Mayo, he said as many as 10,000 stores around the country feature avocados on ad, with about 10 percent of that number advertising organic avocados. The very high retail price has kept promotional activity at a much lower level for many months, but Crane said it started to climb in July, and he is expecting many more retailers to join the game over the next month.

Cal-Organic Aug 2022

“We are going to need 7,000 to 8,000 stores on ad on a weekly basis this fall if we are going to move the volume that Mexico is projecting,” he said, “with about 800-900 stores promoting organic avocados.”

During a big promotional week such as Super Bowl or Cinco de Mayo, he said as many as 10,000 stores around the country feature avocados on ad, with about 10 percent of that number advertising organic avocados.

Crane reported that bags of smaller fruit should offer great opportunities for organic promotions over the next several months.

Rob Wedin, executive vice president of sales for Calavo Growers, believes the supply situation for organic avocados should allow for many promotable opportunities from now well into the spring of 2023. He noted that Mexico is anticipating a 25 percent increase in total volume, and that should equate to a similar increase in the volume of organic avocados. 

Vitalis

Rob Wedin, Executive Vice President of Sales, Calavo Growers

“We are going to need 7,000 to 8,000 stores on ad on a weekly basis this fall if we are going to move the volume that Mexico is projecting, with about 800-900 stores promoting organic avocados.” -Gahl Crane

Wedin said demand for organics is a bit stronger than conventional, so Mexico’s packers tend to run out of supplies in the late spring, which led to the very high organic prices in the March through June period of this year. But that is not an issue as the new crop is harvested beginning in September. Mexican packers and US distributors are more than happy to fill that organic demand early with solid pricing that is still promotable.

While avocados from the state of Jalisco in Mexico can now legally be exported to the US market, none of the three suppliers interviewed for this story believe that organic avocados from that region will make a big impact this year.

Wedin noted that Mexico is anticipating a 25 percent increase in total volume, and that should equate to a similar increase in the volume of organic avocados. 

Though all three companies have begun handling Jalisco fruit, it appears that Mexico’s packers in that region are concentrating on certifying conventional groves for export first. Crane said there are still many groves that need to pass the regulations mandated by the USDA. “We expect very limited volume of organic fruit from Jalisco,” he said. “It is still going to take some time for all the groves to be certified.”

Stemilt Aug 2022
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