World Avocado Market Projection for 2030 - A Paradigm Shift
Summary
TLDRIn a webinar hosted by the Hass Avocado Board, Eric Amber, a researcher and publisher of Fruit Top magazine, presents an updated projection of the avocado world market up to 2030. Amber's analysis reveals a rapidly expanding market, with production outpacing demand, particularly highlighting growth in Latin America and the Mediterranean. He discusses the potential for increased consumption in the US and Europe and emphasizes the need for strategic promotion to unlock the vast opportunities in emerging markets. The presentation underscores the importance of sustainable practices and competitive pricing in the face of a predicted oversupply.
Takeaways
- 📈 The avocado market has seen rapid growth over the past decade, with an average growth rate of 10% per year, making it a significant player in the global fruit trade.
- 🌍 Latin America is the largest exporting region for avocados, accounting for over 80% of global exports, with Mexico being the leading exporter.
- 📊 The European market is more diversified compared to the U.S. market, which is heavily reliant on Mexican imports, while Europe has multiple suppliers.
- 📉 Despite an increase in volume, the avocado market has experienced a decrease in turnover from the 2021 season to the 2022-2023 season, indicating market pressures.
- 📚 Eric Amber's research and presentation provide a comprehensive analysis of the avocado market, including updated data and projections up to 2030.
- 🌳 There has been a significant increase in avocado orchard plantings, with an estimated 175,000 hectares gained in six years, tripling the rate of the previous period.
- 📊 The demand for avocados is growing, but not as quickly as supply. This discrepancy suggests a potential oversupply issue in the coming years.
- 🌱 New plantings and increased productivity are expected to lead to a substantial increase in avocado exports, outpacing demand growth.
- 💡 There is a significant opportunity for growth in the avocado market, particularly in regions like Europe and Asia, where consumption levels are currently low.
- ♻️ Sustainability and consumer expectations will become increasingly important, potentially impacting the market through regulations on carbon and water footprints.
- 🌐 The presentation highlights the need for continued investment in promotion and the development of new markets to balance the growing supply of avocados.
Q & A
Who is Eric Amber and what is his professional background?
-Eric Amber is a researcher at CIRAD and also the publisher of Fruit Top magazine. He has an agronomy and food processing engineering background. He worked for 10 years at a large French importing company specializing in food business before switching to CIRAD, where he has been in charge of a department specializing in international fruit trade for the past 20 years.
What is the current position of avocado in the international food trade in terms of volume and value?
-In 2021, avocado ranked eighth in volume with 2.5 million tons, accounting for 4% of the international food trade, which is estimated at 70 million tons. In terms of value, avocado holds the fourth position with a turnover of 6.6 billion US dollars in 2020, representing 8% of the world trade.
What was the growth rate of the avocado market in the last decade?
-Over the last decade, the avocado market has seen a dramatic change with an increase in trading volume. The base growth rate was around 160,000 tons per year, which is about three times the growth rate from the previous period, resulting in a market expansion by a factor of 2.6.
Which countries are the major exporters of avocados?
-Mexico is the leading exporter of avocados, accounting for 60% of the total volume, followed by Chile, Israel, Colombia, and Kenya. Other significant exporters include Spain, South Africa, the Dominican Republic, and Morocco.
How has the avocado export volume evolved in recent years for countries like Michoacan, Peru, Israel, and Colombia?
-There has been a significant increase in avocado export volumes for countries like Michoacan and Peru, with an increase of around 300,000 tons in just four years. Israel and Colombia have seen an increase of about 70,000 tons, and Jalisco and Kenya have seen an increase of around 40,000 tons.
What is the distribution of avocado exports among the leading markets?
-Approximately half of the world's avocado exports go to the US, and one third go to the European Union and the UK. This means that the remaining 20% of the world trade is absorbed by the rest of the world's population.
What are the challenges faced by the avocado market in Europe?
-The European market faces challenges such as a decrease in prices due to an increase in supply, especially during the summer avocado season. Additionally, there is a need for increased promotion and investment to build consumption in the region.
What is the current state of the avocado market in Asia?
-The Asian market has been slow to adopt avocado consumption, with only 5% of the trade, or 140,000 tons of imports in 2021-2022. However, there is potential for growth due to the large population with good to high income in countries like Japan and China.
What are the key factors that could impact the future growth of avocado demand?
-Factors that could impact future growth include a decrease in plantation rhythm, increased promotion and investment in consumption, addressing climate change and sustainability concerns, and meeting consumer expectations for local food and product image.
What is the projected growth rate for avocado production and demand according to Eric Amber's model?
-The model projects a significant risk of oversupply, with production increasing much faster than demand. The peak period during season 2023 to 2025 is expected to have a production that corresponds to twice the demand, with a progressive decrease from 2026 but still remaining heavy until 2028.
What actions are suggested to address the risk of oversupply in the avocado market?
-Suggested actions include decreasing the plantation rhythm, adjusting costs, reinforcing sustainability, investing in promotion, and exploring new markets to build consumption, especially in regions with high potential for growth.
Outlines
📚 Introduction to Avocado World Market Projection
The video script opens with Indian Escobedo, the Executive Director of the House Avocado Board, introducing a webinar featuring Eric Amber, a researcher and publisher. Eric is known for his work at CIRAD and his presentations at the Royal Avocado Congress. The webinar's focus is on the avocado world market projection up to 2030, with an update to Eric's previous study. The audience is encouraged to subscribe for more webinars, and John McGuigan, the Director of Industry Affairs, is also introduced. The presentation will cover the basics of the avocado market and introduce a new model for market prospects.
🌍 Overview of the Avocado Trade and Market Dynamics
This paragraph provides an overview of the avocado trade, highlighting its position as the eighth most significant in international food trade by volume and fourth by turnover. The market has seen rapid growth over the past decade, with a significant increase in trading volume and turnover. The main exporting regions are Latin America, the Mediterranean Basin, and Africa, with Mexico leading in exports. The market is bipolar, with the US and the European Union absorbing the majority of exports. The supply pattern differs between the US, which is heavily reliant on Mexican imports, and Europe, which has a more diversified supply. The presentation will delve into the market model for 2030 and address changes in the market.
📉 Market Trends and the Impact of Supply and Demand
The paragraph discusses the market trends in the avocado trade, noting a decrease in turnover compared to the previous season. It emphasizes the fast development of the market and the significant growth in trading volume over the past decade. The presentation will cover the evolution of the avocado trade, the economic and social impacts, and the potential for growth. It also mentions the updated information for the 2022-23 season and the importance of understanding market dynamics for stakeholders.
📈 Analyzing the Avocado Market Growth and Projections
This section delves into the specifics of the avocado market growth, with a detailed analysis of the world's orchards and the increase in planted areas. The presentation shows a dramatic increase in the rate of plantation, with a peak in 2023 and a projection of the world's orchards reaching around 500,000 hectares by 2022. The data indicates a more dynamic increase in production, with new orchards utilizing innovative and high-tech production systems leading to higher yields.
🌱 Factors Influencing Avocado Production and Yields
The paragraph examines the factors influencing avocado production and yields, such as the age of the orchards and the specific models of productivity increase for different countries. It discusses the importance of using data from the field and collaborating with the Avocado World to create profiles for each producing country. These profiles, available on respective websites, provide insights into the history, production systems, and future prospects of the avocado industry in various countries.
📊 Estimating Future Avocado Export Potential and Market Imbalance
The discussion shifts to estimating the future export potential of avocados and the potential market imbalance. The model projects a significant increase in production, outpacing demand and leading to an oversupply situation, especially during the peak period from 2023 to 2025. The presentation also addresses the need to adjust the plantation rhythm and the importance of considering sustainability and consumer expectations in future projections.
🛑 Addressing Climate Change and Sustainability in Avocado Production
This section highlights the critical impact of climate change and sustainability on avocado production. It mentions the potential effects of climate change on yields and the importance of considering carbon and water footprint regulations in Europe. The presentation also touches on consumer trends towards local food and the challenges of maintaining a competitive market while addressing sustainability concerns.
💡 Opportunities for Growth and Strategic Promotion in Avocado Markets
The final part of the presentation identifies opportunities for growth in the avocado market, emphasizing the need for strategic promotion, especially in Europe. It suggests that while there are concerns about oversupply, there are significant opportunities for increasing demand, particularly in regions with low current consumption levels. The discussion concludes with a call to action for the industry to invest in promotion and to explore new markets to capitalize on the growth potential of the avocado market.
🤝 Closing Remarks and Future Collaboration
The video script concludes with closing remarks from the hosts, thanking Eric for his insights and collaboration. They encourage viewers to subscribe for future webinars and to visit the House Avocado Board's website for updated reports and information. The presentation ends on an optimistic note, emphasizing the opportunities available in the avocado market and the importance of continued development and promotion.
Mindmap
Keywords
💡Avocado Market Projection
💡Eric Amber
💡CIRAD
💡Fruit Trade
💡Global Avocado Production Capacity
💡Avocado Exports
💡Market Dynamics
💡Sustainability
💡Promotional Budget
💡Oversupply
💡Consumer Behavior
Highlights
Eric Amber, a researcher at CIRAD and publisher of Fruit Top magazine, presents an updated avocado world market projection up to 2030.
The avocado market has seen an average growth of 10% per year, making it a significant player in the global fruit trade.
Avocado trade turnover has tripled from four billion to 6.1 billion between 2011 and 2022-2023.
Latin America accounts for over 80% of global avocado exports, with Mexico leading as the top exporter.
The US and the European Union, along with the UK, absorb 80% of the world's avocado exports, indicating a concentrated market.
Eric Amber's model predicts a significant increase in avocado supply, potentially leading to oversupply issues by 2030.
The presentation includes updated figures and a revised model to reflect new data and insights since the first edition in 2021.
The demand for avocados in the US is expected to continue growing, supported by promotional efforts and a natural increase in the population.
In Europe, the growth of avocado consumption may be hindered by low promotional budgets and the impact of inflation.
Asia presents a significant growth opportunity for avocados, despite currently accounting for only 5% of the trade.
The model suggests a peak in avocado production between 2023 and 2025, outpacing demand significantly.
Eric Amber emphasizes the importance of adjusting costs and reinforcing sustainability in response to a more competitive market.
The presentation calls for a decrease in the rate of new plantations to balance the market and avoid oversupply.
The potential impact of climate change on avocado yields is highlighted as a critical factor that could affect projections.
Consumer expectations regarding sustainability, including carbon and water footprint regulations, may influence avocado trade.
Eric Amber concludes by identifying opportunities for avocado market growth in the US, Europe, and Asia, despite the risks of oversupply.
Transcripts
hello everybody and thanks for joining
us today on the summer day of 2023 for a
conversation and presentation with our
friend Eric Amber
Eric is a researcher at sirad and also
publisher of fruit top magazine
I am Indian Escobedo and I am the
executive director of the house avocado
board and if you already haven't done so
please make sure to click the Subscribe
button so that you can get the latest
webinars from the house avocado board
also with me today is my colleague John
mcguigan he's the director of Industry
Affairs John
hello folks it's a pleasure to have with
us today a very good friend of the Haas
avocado board Mr Eric and bear who will
be sharing a presentation entitled
avocado World Market projection up to
2030 version 2.0
back in 2021 Eric and his team published
the first edition of this study which
was then entitled avocado about to
embark on a balancing act the world
prospects for the medium long term 2021
through 2028 this comprehensive article
about global avocado production capacity
is available on
www.passavocadoboard.com and today he'll
be presenting key highlights from that
article with updated figures that sir ad
has compiled since the article's first
publication it shows an even higher
supply curve capacity and Eric will
share data with us so we can learn from
it Eric
yes and by the way for those of you out
there that don't know uh Eric
um I I he he you can and he's he's now
famous because he did a great
presentation at the Royal avocado
Congress and of course his magazine gets
great pickup all over the world but um
Eric can you please give us just a quick
rundown of your background and
professional history so that those that
are watching this presentation know a
little bit about you
yeah sure thanks to giving me the Flora
Milano uh I am an agronomist and the
food processing engineer I work during
10 years for a big French importing
company specializing the food business
and then 20 years ago I switched for a
research center called cyrad where I'm
in charge of Department which is really
specialized in the international fruit
trade and to be more specific we are
specializing banana Citrus avocado mango
pineapple let's say all kind of tropical
fruits so that's more or less what we do
with a a magazine which is called free
trap and also some Weekly Newsletter
that try to help the the the the the the
the stakeholder of the industry to
understand better the market
that's great so that is fruit trap
magazine
um Eric thank you so much uh for your
introduction and if you wouldn't mind
sharing your screen and we will go ahead
and mute ourselves so that you can
share the latest an update uh updated
information
okay
did you see an ice cream
yes we do see it thank you okay so as
John told you we have developed two
years ago a model uh that tried to give
a vision of what could be the avocado
Market uh in 2030 uh we have work uh
these last years on the model and uh try
to get some new data some new input and
we are now proud of presenting version
two uh
it is possible to find it also in the
last edition of free top mega magazine
uh so you will see some some new
information regarding this Market model
the presentation will have two parts uh
quickly in the first part that will
remind you the basics of the world
avocado Market with some updated
information in fact uh I just finished
to have some some ideas about the last
season 22-23 so I included it in some
slide of this presentation and then in
the second part we will have a look
towards a new model and our New Prospect
for 2030.
let's begin now with some information
some very generic information about the
avocado trade uh so in 2021 uh this is
the last season for which we have a
complete data for all fruits I didn't
include also 2122 because it was a very
special season remember Mexican
production was down to of course it had
some big consequences on the on the
avocado trade so as you can see on this
table the avocado Market is quite a
moderate an average Market in the in the
food world as you can see it only come
in eight position with 2.5 million tons
four percent of the International Food
trade that is estimated at 70 million
ton in 2020. it is far below banana
apple and oranges the three liters
if we have a look to the information in
turnover you can see that the situation
is quite different indeed avocado come
in a much better position in fact in the
fourth position with 6.6 million uh
story sequences billion US dollar in
2020 eight percent of the world trade uh
just after banana grapes unhapple uh you
will see the updated information for the
avocado trade we are we we we should be
around 2.6 2.7 million ton in 20 to 23
and regarding the turnover I I think
that it's a good example of a uh the
topic of this presentation more pressure
on the market the turnover estimated for
the last season is around 6.1 billion
dollars so we have decreased the
turnover compared to season 2021
still going characteristic of the world
avocado Market it's of course it's
incredibly fast development and you can
see that since let's say 10 years 10 to
11 12 years the growth of the market has
changed totally you can see that on
these charts that do represent the
evolution of the avocado trade in
million tons we were increasing till
season 11 12 at the base of around 55
000 tons uh these last 10 to 11 years
the best as the base has been something
like three times that uh something like
160
000 ton by year so you see a dramatic
change uh of the of the of the of the of
the trading volume we gain the last 10
years a bit more than 10 10 years 11
years 1.6 million tons so we
multiplicate uh the market by 2.6 with a
growth rate an incredible growth rate of
10 percent by year compared to a base of
two person from the global fruit trade
in turnover we gained something like
four billions to reach 6.1 billion in 26
in 2223 so it means that we multiply the
turnover by something close to three uh
of course with huge economic and social
impact especially in the producing
chemistry
foreign
come from
again as you can see it's not updated
information in fact I have not only
considered Consolidated information for
2223 so it's information for season 21
or season 21 22. as you can see the the
the the the the the big export area is
with no surprise Latin America more than
80 percent of the world exports uh then
come the Mediterranean Basin and Africa
with something like six percent
if we have a closer look and try to see
who are the more exporting countries uh
again it's not a surprise Mexico is of
course a leader Mexico itself with 1.5
million tons is exporting 60 of the
total of the volume with of course
Michoacan but also Jalisco which is
developing and as developed firstly this
last year and is no above the hundred
thousand tons step
with something like six hundred thousand
ten again in 2122 then four player
around hundred thousand terms Chile
Israel Colombia and also Kenya all the
other ones are below 70 000 ton I'm in
Spain South Africa Dominican Republic
and Morocco
interesting to see also if we look at
the evolution of volts volume this last
four year that some country as well have
really been extremely Dynamic it's the
case for Michoacan and Peru you see an
increase of around 300 000 ton in the in
in only four years also Israel and
Colombia something like 70 000 ten and
Jalisco and Kenya something like 40 000
tons
in these uh fast developing exporter you
see that we have newcomers such as for
example Jalisco but also Colombia and
also Peru in fact 10 years ago Peru was
exporting 60 000 ten today it's 10 times
more Colombian Jalisco were even not
appearing in the rather 10 years ago so
a fast development for some players
where go all these volume it's very
simple because the avocado Market is a
bipolar Market we have roughly about
half of the world exports that go to the
US
one third that go to the European Union
and the UK
so it means that all the rest and the
the world seven billion people only
absorb 20 of the World Trade so do you
imagine the the potential of growth of
this Market
uh and if we quit Japan and Canada there
is only 30 percent going to outside the
four big the four leader leading Market
it represents only 350 000 tons mainly
in Latin Americans the rest of Asia I
mean uh Asia without Japan uh hundred
thousand ten each and also the girls
country and Eastern Europe around 40 to
50 000 and each
so it means that the World Trade remain
concentrated at 80 percent in the US and
in the European Union with UK and we
don't see any major move any major
growth driver for the moment so in the
future at least in the near future the
growth of the market will continue to
rely mainly on the US and on the
European market
last characteristic which is very
interesting regarding the avocado trade
is that we have a very different Supply
pattern of the two giant market I just
spoke about
in the U.S things are really simple the
US market is really very mexicanized in
fact because of fetal sanitary
regulation and also because it's a very
natural and easy to work market for
Mexican Traders uh it means that 90 of
the volume of the supply in the U.S rely
on Mexican foods the Panorama is totally
different in Europe as you can see we
have more than 10 Majors to player
Peru's leading with with around 35
percent of the volume but we have also
nine hover suppliers which are
representative let's say with volume
around five to ten percent of the global
Supply it is a good point at some
extents because of course it gives a
better resilience of the market I mean
in case of a drop of the production in
one country the over could compensate
but also and especially in this new
context of Greater of of a sharply
climbing Supply it's it's also a greater
exposition to to possible EX oversupply
so let's have a look now to the second
part of the presentation and the uh
let's let's speak about the model on all
the market could be in 2013. first and I
think that it's interesting to notice we
already see that the the Panorama has
begun to change Downstream and again we
see that mainly in Europe because Europe
is a very open-market subject to to to
to to to to catch the the changes very
quickly look at these charts that do
represent for the summer Avocado Season
in Europe so I mean the counter Seasons
Forest mainly supplied by Peruvian
fruits South African food Kenyan fruit
look at the evolution of volume it's the
orange bar and look at the evolution of
the price list it's it's a brown it's a
brown curve you see that volume have
continued to increase very significantly
indeed something like 50 000 turn by a
year however look at the prices we were
running till season 2017 at a nice price
of around 11 30 12 Euro but we have
reached last year 8.5 Euro and the
decrease has been tremendous these last
three years just to speak about what we
are facing for the moment the current
price in Europe is between five to six
euro per box because we are already
fluid with Peruvian Foods and if we have
a look to the World Market if we change
a little the scope of our analysis we
see that something is is is is is is is
is going on also uh you can see it on
the same same bar that stem chart that
do represent the volume traded worldwide
and you see that that continued to
increase quite significantly this last
year and look at the evolution of the
market in value in fact apart season 21
22 where we miss a lot of food from
Mexico the turnover of the World Market
has remained almost stable this last
year
so it gives us the the ID of trying to
forecast the market uh such changes were
too important uh and we we needed to do
something and I don't want to speak to
men to spend too many too much time
about
the methodology because it will be
boring
but I just wanted to underline two
points first our ambition is reasonable
this is a very complicated work to try
to to forecast the market in at the
10-year
period so our ambition is really
reasonable
uh slogans is about methodology is that
what what you will see is not a
statistical approach it's not a
statistic statistical model uh what we
wanted to do Israeli to work with data
from the field I mean what are the hack
reagents producing country what are the
yield what is a production system or
does it work how can it evolve in the
future uh if it could and if it could
influence for example the yield so it's
exactly what we have tried to do and we
have done that based on uh the
incredible work we have made thanks to
the asavocado Bob uh which we which
which we are collaborating on on a very
interesting project uh this project is
to try for each producing country it's
big producing country especially the one
who sent through to the us to have a a
midterm vision and to understand the
industry in those countries so we have
written with the help of the has avocado
World some little leaflet 20 25 Pages
where we try to give information about
the history the area of production the
production system the hackry age we have
done this work for Peru from Mexico for
chile for Colombia for California Spain
Portugal Morocco is in progress Greece
has just been released and we will
continue to welcome that on the future
all these profiles are available on the
as avocado called website and also on
the free trap website
so let's have a look now to the
differences between the version one and
the mode of the model and the version
two of the model
first we get the access to a more
precise information about hackry age in
some countries and also we have decided
uh to to use a new model of uh increase
of productivity of a younger child in
version one we we are using a let's say
a standard model for all countries in
this version 2 we try to use a specific
model to each country to take into
consideration that in some countries the
ultra reached its full potential at five
years for example in Peru but it's
Michoacan it's seven year so it changed
quite significantly the the the the the
the the the increase in the production
in the future
and also as I told you it's a very
Dynamic model we get new information
every day so we try to include this new
information and especially the new
acreage estimates thanks first to new
official data uh it's the case for
example in Peru uh pro has
released a new estimate last year with
ten percent ten thousand hectare more
also we included whole information we
get this last year for from the field
trip we have done in Colombia we
included 12 000 hectares more in Spain
to further nectares Morocco 3.5 Portugal
2.5 we also included the small exporter
that were not included in model one uh
it's not a big deal
independently prioritize 2000 Ecuador is
a thousand five hundreds Guatemala 605
6005 but all together it's 10 000 actors
so it gives us the vision of a larger
World Orchard an increase of around 40
000 hectare compared to version one
so it gives us a new map of the of the
avocado world at least for the for the
export variety so we estimate now the
word Orchard at around 500 000 hectares
in 2022 with three third in Latin
America around 9 000 in the
Mediterranean six percent in Africa four
percent in California
this new data show us a a an even more
uh Dynamic uh increase of your chart as
you can see on this chart that do
represent the evolution of the world
Orchards
we gain 175
000 hectares in six year time so it
means something like 30 000 hectares by
year just to compare in the former
six-year period I mean 2010 2016 we
gained a total of less than 60 for the
nectares so less than ten thousand
hectares a year so it means that we
triplicate this last year the rhythm of
a plantation the yearly rhythm of
Plantation
what are the results if we include this
new data in the model first let's have a
look to the annual growth of the world
planted area uh the projection of the of
the annual growth of the well planted
area
it is expressed in hectar in full swing
so I mean we use the small model of
Entry of production of a new workshop to
try to transform the global acreage in
uh let's say fully productive acreage
and it's what it's presented what you
see is the increase in acreage every
year so you see that we change totally
the Panorama we are we were running
around 10 to 12 000 hectares by year uh
before 2020 and we have quickly reached
a peak
visual 2023 at more than 30 000 hectares
and you see that we will remain
extremely heavy close to this rhythm in
the coming years and just beginning to
decrease in 29 and 2030 decreasing to 22
23 000 hectares why such an increase
just because all the players have
besides Chilean California
uh even Michoacan even if the the rhythm
of Plantation has decreased it is quite
significant however uh we have a sharp
increase of the newcomers such as
Colombia Peru Jalisco Morocco and we
continue to have a steady growth or even
an acceleration of the historical one
I mean Israel South Africa and Spain
so as you see we will have a peak uh
between 22 and 28 and maybe a Slowdown
afterwards what are what what is the
situation is we try to analyze the
export potential you see that the
increase is even stiffer why because we
curulate the increase in acreage and
also an increase in productivity because
in fact the new Orchards that are
planted are very Innovative there is
there is its micro irrigation its clonal
tree is high-tech production systems so
the accurate the yields is much better
and as you can see the result is that we
will change from a reason if around 120
150
000 ton by years since 2019 to something
close to 400 000 tons uh the coming
years decreasing slightly at the end of
the period but reminding extremely heavy
uh so as you can see the the hash
different with version one it's exactly
the same Trend but there are just more
more marked because of more hack reagent
plane and also more progressivity and a
higher Peak this is due to the new model
we take into consideration for the
universals
let's have a look now to the demand side
uh remember again I will go very quickly
regarding methodology just to remind you
uh that what we use is the average
growth of the last four year for all the
leading Market it's mean an increase of
the trade of something like 180
000 ton by years mainly thanks to 70 000
ton by years in the US and also
something like 70 000 ton by year by uh
for the European Union and also second
point is that we have we try to add a
critical critical approach of this data
trying to see uh regarding the the
consumption per capita is if this
increase makes sense or not it's exactly
what I wanted to show you now trying to
to analyze a bit if such an increase is
possible first in the US uh the case the
question makes sense because we have
already very high consumption in the US
we are around 3.6 kilo per capita in
2022 and remember
2022 is also a result the result of a
small Mexican crop so we have already a
a very strong consumption in the U.S
however we believe that the U.S market
will continue to develop a such a navy
base why
first because the tools to make uh the
consumption increase per year with a
huge promotion budget uh had is managing
something like 80 million dollars by
year that is spent in a very efficient
way thanks to the production
promotion system in place also there is
a very Dynamic Market segment which is
the small Putin Nets
second point which is very important
very important is that the potential
consumer are here I mean just because of
the natural increase of the population
we will have 30 million new consumer new
potential consumer in 2030 in the US
two-thirds of them over consuming
Hispanic people also a very important
point that has the has avocado both
studies show that the proportion of over
consumer is increasing very
significantly and it's very important
because this small range of the
population something like 28 percent of
the household are representing 70
percent of the sales and what is also a
very good signs is that more and more
non-hispanic people are entering into
this category
finally and this is maybe a very
important point is that there is still a
good potential of growth especially in
the east coast because there is a large
population which is still under
consuming as you can see the consumption
on the west is around 4.4 to even 4.8
kilo in California in the east coast we
are have everywhere between three to
three point five kilo per capita so we
decided to say that we will continue and
we validate the growth hypothesis of
something like 17 67
000 ton by year in the US
seminalize this for Europe however we
will not get will not come to the same
conclusion why we can first think that
because of the low conservation
especially compared to the US the
European Market has an ability to
increase very quickly in the future it's
true however it's it's it's we have some
weak point first the wow promotion
budget it's not it's a non-monetary
budget is still very low for the moment
we have two to three million uh uh Euro
uh to spend in promotion for more than
500 million people there are some very
good but there are some some much better
Prospect with new country entering into
the world system uh
and maybe very soon so it's a very good
news however for the moment the budget
is quite reduced also and this is
totally linked with the limited budget
we have regarding promotion we can see
that we have some markets that are not
growing any longer because of a very
close correlation between consumption
level on on the growth rate you can see
it
especially if you look at the Nordic
countries it's a purple curve you have
just here you see that they are within
the highest consumer per capita 2.3 to
2.4 kilo however the consumption has
been quite flat this last year we have
seen also quite a a a slowing down in
France this last year after reaching the
two kilo per capita Mark uh
also we have the UK Market as you can
see which is not extremely Dynamic
certainly because of the brexit effect
with the stability at 1.4 1.6 kilo
between 2018 and 2000 and 2021.
foreign
driver the main Prof the main growth
driver where till 2020 Italy uh and also
Germany till 2020. it's very important
because both countries have a large
population 60 more than 60 million
people in Italy more than 80 in Germany
and consumption level is quite low 700
gram in in Italy and 1.3 kilo only in
Germany
also there is something new that
appeared recently in Europe and its
inflation of course that affected very
significantly some Market especially the
novel one uh as you can see they switch
from a very slight increase to a
recession in 2022 again it's a purple
curve and also and it's a big difference
that it's some it's it's somewhat
worrying in Germany it's a record
remember Germany was one of the leading
if not the leading group drivers however
these last two years it has been totally
stable because consumers are extremely
susceptible to price increase over there
so for Europe which I we we we decided
to change a bit the hypothesis uh and to
take into account these uh reduction of
the growth due to the inflation due to
the captain effect we have on the market
we are consuming the best so we have
decided to reduce the 71 000 ton by year
by 55 stand by year During the period 23
reaching again only again only in 2025
71 turbo years
build market for which we we have a
close a close look and try to see what
could be the evolution of the of the of
the of the trade it's of course azure
Asia could be a huge Market because it's
60 of the world population however
regarding avocado it's only five percent
of the trade only 140 000 ton of import
in 2122
we have seen some nice move in Asia till
let's say season 1890 and then almost
nothing in fact uh the Japanese and the
Chinese leader are stable to Dawn this
last year with a very significant drop
in Japan certainly look link to also
inflation uh on uh inflation effect only
South Korea Singapore and Malaysia are
inclusive increasing slightly is what
you can see on this on the on the curve
however there are still some some small
market for the moment
the provisional data for 2223 as you can
see don't don't really change the thing
we have maybe a slight wake up of the
Chinese market however Japanese Japanese
is decreasing further
however we have decided to take into
consideration that there is a big growth
potential there why because there is a
large population with good to high
income in Japan we have 126 million
people uh with a with with the revenue
around 40 000 US Dollar by year in China
just if we consider uh the the share of
the population that you that have uh uh
uh uh good Revenue I mean revenue above
34 000 US dollar it's represent
according to a Maxine's day study
something like 100 million people Korea
is 52 million people with also a nice
purchasing power and as you can see on
the chart below the consumption in both
Market is quite limited uh in Japan we
are around 8 500 grams in China if we
only consider the 100 million people I
spoke about before it's 600 grants Korea
only 300 compared to 1.6 kilo in in
Europe and again around 3.6 kilo 3.7
kilo in the US
so on our study we decided to bet on the
growth on the midterm uh with uh let's
say uh globally an increase of 20 000
ton by year instead of what we calculate
that was around eight thousand times
so let's come now to a conclusion and
Let's cross the production it's a green
curve and we demand
you see that we are changing of world I
will say I mean uh we were almost on the
balanced Market till season 20 19 and
20. uh if we look with or with an
increase of the production and an
increase of the demand of something like
200 000 ton by year
however we are heading towards a very
significantly unbalanced Market in the
coming years the production is
increasing much faster than demand uh at
the peak period I mean during season 23
to 25 we should have a production that
correspond to twice the demand and then
a progressive decrease from 2026 but a
supply that will remain extremely heavy
till 2028.
if we change the scope and try to to to
to have a look to the accumulated Supply
and the accumulated demand uh don't
don't forget that the excess in Supply
is heading year after year it means that
we should
change from another Supply around 10
percent by year nowadays to something
close to 28 30 from 2026.
who is also an inversion before the
increase in volume was much quicker
during the summer season it's a yellow
curve uh instead of the winter season
it's it's a it's a
wrong curve and you will see that in the
future it will be the contrary so I mean
the increase in volume during the winter
season will be sharper than during the
summer one
let's conclude no uh first of all I want
to repeat again that there are some
uncertainties in in this kind of studies
so the model only shows the direction
it's very important
second point however the gap between the
additional Supply and the additional
demand is very large so rarely we
strongly believe that there is a
significant risk of over Supply maybe
something like 30 percent
second point and this is also a critical
point some parameters are impossible to
take into account but they may highly
impact the projection and especially of
course the climate change
it can impact really very significantly
this is a yield in some countries look
for example what took place this last
year in Colombia years were very poor
because of the two wet weather look at
what is going on also in some very dry
area such as for example the axarchia in
Spain where this area is suffering from
very very strong Yale losses because of
lack of water
also some new regulation and consumer
expectation regarding sustainability
should have an impact first the carbon
and water footprint regulation they
could enter into Force soon in Europe as
well as a state sustainability leveling
it means that will hold this volume be
allowed in the European market in this
context
also we can see it in Europe but I guess
maybe in the US we have a move of the
consumer to more local food will it have
an impact on the imported avocado
also the image of the product it's quite
a challenge in Europe where we have some
controversies that need to be addressed
with scientifically proven analyzing
so to conclude just three words the
first word is decrease decrease of the
plantation Rhythm we have some very
first positive sign in 2023 however 21
and 22 where workout breaking years of
Plantation
we have a strength and we don't have to
forget that in the avocado Market
remember the market is increasing by
around 10 percent by year it's
incredible in the food trade so we have
an attractive product uh we have a very
good current dynamic
we have huge margin of growth that are
not or underexpirated and rarely the
promotion model of the Hub is showing
the way
there is a great possibility of
developing the foreign Asian market the
local and regional market of the
producing countries are also
opportunities but I guess that in the
future Europe is is is also a market
that have to be kept in mind we have
their high potential uh again the
consumption is only 1.6 kilo per capita
compared to 3.6 in the US so uh
we we have some work to do there and
remember that Europe will be with the
states as the main growth driver in the
coming years but the third world also
has to be taken into consideration we
have to be prepared to a more
competitive market we need to adjust
cost and also to reinforce
sustainability because it will be part
of the competitivity especially in some
markets which are quite Advanced on that
I mean the European one remember that
the supermarket will choose cost
effective supplier offering the best
ecological and social warranty
I thank you very much for your attention
and if you have questions I will be very
happy to answer it
well that was very exciting uh and very
well thought out presentation Eric
um and I like the update that you did
from the first version
um I I have one one well one comment
first of all
I do want to commend you for as I said
last time you know for taking on this
challenge of trying to project
Global Production and demand and really
taking into consideration all the
factors that you are seeing from the
field because
like you said in your presentation you
know you're getting the data from the
field you're talking to people all over
the world
it's not just based on numbers and
charts and statistics obviously there's
some statistics and math in in your
model but
let me ask you uh you know
obviously after the world avocado
Congress presentation a lot of people
coming together there was a concern of
like
there's this huge growth coming do you
do you think
um
it's going to be what like what country
or what region is it that you're gonna
do you expect to see the highest growth
rate is it going to continue to be Latin
America or what are you seeing also in
Africa or other countries where would
you say that the this growth rate is
going to be coming from let's say
regionally
speaking and then if you have some
thoughts at the country level that would
be great to yes it's a very good
question Emiliano I think that uh if we
look at what has been planted these last
three years that has not entered into
production we have a clear vision of
what goes on uh in let's say the fact
five next years and uh that are very
simple in fact we have a lecture bunch
of five countries five areas where we
have something like 15 000 hectares
planted these last three years we have
Peru which is a bit above the 15 000
hectares planted these last three years
we have Colombia we have Jalisco and we
have Michoacan and also we have a part
of these Latin American country we have
Mediterranean all together the
plantation the last three years in
Israel in Spain in Morocco in Portugal
are around 15 000 hectares also so you
see we have this big bench that will
really lead the increase in the coming
news you spoke about Africa Kenya is
very complicated to have a clear region
so I will not enter into too much
details because it's really one of the
weak points Kenya we have really very
little statistic viable it's a bit
complicated and South Africa is
advancing but not at the same pace
yeah because I mean costs have to be a
major driver too right so you can't
I mean I suppose the production costs in
some of the northern hemisphere
countries especially in Europe like in
Spain and it's just going to go up
there's no question yeah and there is
also another point I mean you know that
has to be on the line
um we spoke about acreage but we'll hold
this hackerage transform into large
Productions that's a big question yeah
in somaria at least for example we see
that for the moment the Royals in
Colombia I not are not the one expected
we have some let's say Pioneer areas in
Samaria for example in Morocco we have
some internal areas that has been
planted quite far from the sea very hot
in summer very cold in Winter also in
Spain we have some areas which maybe are
not the most shootable so we have to see
in the future if uh all these new
projects are really turning into a
success of notes there are some some
some some some some consideration about
that and I guess in the version 3 of the
model
that I will prepare for the future I
will try to take that into consideration
it's it's it's it's almost impossible to
take that into consideration uh with
let's say very rational information but
we can let's say make some hypotheses of
decreasing yields for example in let's
say fragile or a bit sensitive areas and
it's what I will try to do in the third
version yeah that's interesting because
I've seen it too like people are pushing
to go to
find new areas where they could produce
and you know we've seen it in Peru going
far north et cetera maybe that's what's
at the end we don't really know if the
yields will be as high as as we've seen
in other places so that's a really good
point John do you have a question for
Eric yeah I I'd like to switch it over
to the demand side of the equation
um and we see where the markets are
right now and where the United States
and and Europe are and the Asian markets
have been slow to come to the party but
I think looking at this growth curve
um on on the demand side Eric where do
you think the future growth is the the
opportunity where do you see the
opportunity but I think more importantly
what are the resources and what are the
actions that are going to need to be
taken to fulfill that demand creation
look opportunity John I see them
everywhere
look even in the U.S where we have a
huge consumption uh 3.8 kilo 3.6 1.8
kilo per capita we continue to increase
at a very nice Pace we see in the east
coast some some margin of development so
in this U.S market we still have
opportunities in Europe again I strongly
believe around about Europe we have some
huge uh country with with a very nice
population which are almost which are
consuming very low volume of avocado uh
but the driver of course in Europe is
promotion uh definitely and we need to
to to to to to to put more budget into
the production into the promotion uh
producer I need to have invested a lot
in new acreage they have to to invest
now uh also and much more significantly
in promotion it's really a key point and
also again remember about what we
presented about the rest of the world uh
we have for the moment the main part of
the trade-off to Market we have seven
billion people in the world that do not
consume or consume very little avocado
so really we have a lot of doors to open
uh
and I think that there are some some
very very large opportunity for for the
avocado market so again these studies
may be a bit worrying but look at the
good side look at the increase in demand
we are 10 by your no over Foods or maybe
a bottle of blueberries as such an
increase a yearly increase of the market
we have huge opportunity on Avocado
Market but we have to to build now this
consumption and we have to invest to
build this consumption as you have done
in the US
well I like I like to think that we can
end this presentation on a very
optimistic note that the opportunity is
there in front of us
absolutely I agree with you John
um well Eric that's all uh that the time
that we have uh today I I want to thank
you very much for being with us and
sharing all of your knowledge and
insights John also thank you for being
with us today
and for those of you that are watching
please remember to just click the
Subscribe button uh so you can get
notified of future have webinars and
also come back and check on our website
has avocadoboard.com we're going to be
publishing uh all the uh fruit drop uh
reports on on on the different countries
I know we have plans for uh the coming
years to continue developing those and
renewing and basically updating those
country reports so make sure you check
on our website regularly
that's it for now Eric thank you very
much nice to see you have a nice summer
John thank you Eric we appreciate your
participation in your partnership it's
been grand
thank you very much it was a pleasure
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