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Avocados are going to be on ad all over the country over the next two weeks as Cinco de Mayo approaches. They make a great compliment to chips, beer and the margarita promotions that will proliferate.
But almost every single one of these promos will feature conventional avocados rather than organic ones because organic supplies are just too scarce. “We are in a demand exceeds supply situation on organic avocados,” said Rob Wedin, vice president of fresh sales & marketing for Calavo Growers Inc., Santa Paula, CA. “I just don’t recommend that my customers put them out there with promotional pricing.”
Robb Bertles, vice president of marketing for Mission Produce, Oxnard, CA, echoed those same sentiments. “There just aren’t enough supplies of organic avocados to support promotions,” he said.
Both avocado marketers said the fact is that even in this year of heavy supplies, avocados are a moving off the shelves in record numbers at solid prices, and even more so for the organic SKUs. The total amount of the green fruit available to be marketed in the United States leading up to the guacamole-friendly holiday is in the neighborhood of 65 million pounds per week. However, Bertels said “less than 10 percent of that, probably closer to 5 percent” is organic. Demand is simply greater than that.
Mexico’s 2017/2018 crop is winding down with at least 75 percent of its production already sold. Wedin said the ongoing demand-exceeds-supply situation most likely means a higher percentage of total organic volume has been sold. While California avocado growers are ramping up supplies toward their peak shipping weeks in May and June, Bertels said there just aren’t enough organic avocados to fill demand in a regular week let alone in a promotional one.
After getting some numbers from Mission’s in-the-field representatives, Bertels said, “Organic avocados represent about five to seven percent of the California crop; equaling roughly 16-20 million pounds for 2018. The industry has already harvested 7.3 million pounds, so there are 10-15 million pounds left for the season. Mexican organics are running out rapidly and crop will get lighter weekly and be done by the end of June; Peru has about 75 containers total. In the grand scheme of things, that is less than 1 percent of the total Peru crop.”
Currently a carton of organic avocados is selling at about a $10 premium over their conventional counterpart, according to Wedin, with the 48-size fruit commanding a price of close to $50 per carton.
There is no prospect for the situation to change anytime soon. Bertels said Peru will add some organic supplies to the mix when shipments to the U.S. market start sometime in mid-May, but the percentage of that production that is organic is probably less than what Mexico and California achieve. When Mexico’s new 2018/19 crop starts to mature in late summer, there could be a bump in supplies, but even that probably won’t keep up with the growing demand. Organic avocados don’t appear to offer much opportunity for promotion over the next several months.
For Cinco de Mayo, retailers looking for an organic play might have to stick to organic beer and organic chips.
