Avocado - About to Embark on a Balancing Act

Summary

In a 2022 webinar, Eric Imbert from C-RAD and Fruit Drop Magazine discusses the avocado market's dynamics, focusing on production and demand forecasts from 2021 to 2028. Highlighting the market's rapid growth, Eric emphasizes the potential imbalance between increasing production, particularly in Latin America, and demand, mainly driven by the US and EU. He warns of a likely oversupply and stresses the importance of promotion to expand consumption, especially in Europe and emerging Asian markets. The presentation underscores the need for strategic planning in the avocado industry to balance supply and stimulate demand.

Takeaways

• 📈 The avocado market has experienced extraordinary growth over the past decade, with trade volumes increasing significantly faster than other food commodities.
• 🌍 Latin America is the primary exporter of avocados, with Mexico accounting for around 60% of the world trade, followed by Peru, Colombia, and other emerging players like Jalisco.
• 🛑 The 2021-2022 season was atypical due to a sharp decrease in Mexican production, leading to stagnation in world trade volumes.
• 📊 The US and the European Union (plus the UK) are the main markets for avocado exports, absorbing approximately 90% of the world's avocado trade.
• 📉 There is a growing concern of oversupply in the avocado market, with production increasing at a faster rate than demand, potentially leading to a surplus.
• 🌱 A significant increase in avocado plantations, especially in countries like Michoacan, Colombia, and Peru, is expected to continue boosting production in the coming years.
• 💡 The presentation highlights the importance of promotional efforts, particularly in the US and Europe, to maintain and increase avocado consumption.
• 🌡️ Climate change and its impact on avocado yields in various countries, such as Chile and Spain, pose a significant risk to the industry and are difficult to predict.
• 🌱 The rate of new avocado plantations has not slowed down, with an increase of up to 30,000 hectares in the 2021-2022 season alone.
• 🛑 The European market shows signs of saturation in countries with higher per capita consumption, suggesting a need for a more targeted promotional strategy.
• 🌏 There is a significant potential for growth in the Asian market and local/regional markets of producing countries, which could help absorb the excess production.

Q & A

Who is Eric Imbert and what is his professional background?

Eric Imbert is a researcher at CIRAD and the publisher of Fruit Drop magazine. He has worked for 20 years at the French research center CYRAD, where he was in charge of a department focusing on international fruit trade, particularly avocado, banana, and citrus. Previously, he worked for a French importer of fruit in water for about 10 years.

What is the purpose of the webinar featuring Eric Imbert?

The webinar features Eric Imbert to discuss and present his research on the world avocado market's prospects for the medium to long term from 2021 through 2028. His presentation is titled 'Avocado about to embark on a balancing act' and includes updated figures since his comprehensive article published in 2021.

What is the current state of the world avocado market in terms of volume and value?

The world avocado market is characterized by its dynamism and growth. In terms of volume, it is an average market in the food universe, with 2.5 million tonnes exported in 2021, accounting for less than 4% of international food trade. However, in terms of turnover, the avocado market is more significant, ranking fourth with around 6.6 billion USD in 2021, representing about 8% of the global fruit trade in value.

Which countries are the main exporters of avocados, and what is their market share?

The main part of avocado exports comes from Latin America, which is the area of origin for the three races of avocado. Mexico is the leading exporter with 1.5 million tonnes in 2021, representing around 60% of the world trade. Peru and Colombia are also significant players, with newcomers like Jalisco, Peru, and Colombia showing rapid growth in exports.

What are the primary markets for avocado exports, and how much do they absorb of the global exports?

The primary markets for avocado exports are the United States, which absorbs about half of the world exports, and Europe, including the European Union at 27 plus the UK, which absorbs about one-third of the global exports. Together, these four players account for 90% of the world trade.

What is the current situation regarding the world avocado orchard size, and how has it changed recently?

The world avocado orchard size is estimated to be around 415,000 hectares in 2021. There has been a sharp increase in the acreage of planting, with around 130,000 hectares planted between 2014 and 2021, compared to an increase of 55,000 hectares in the previous six years.

What are the main factors contributing to the growth of the avocado market?

The main factors contributing to the growth of the avocado market are the increase in acreage and yield improvements due to better production practices and the planting of new orchards with high production potential, such as clonal trees and innovative production techniques.

How does Eric Imbert's study project the growth of avocado production and demand until 2028?

Eric Imbert's study projects that the exportable production could reach around 5 million tons by 2028, which is twice the size of the world exports in 2021. The study also considers the growth of demand, particularly focusing on the U.S., European Union, and China, and suggests that there could be a significant oversupply due to production increasing much faster than demand.

What are the challenges that the avocado industry might face in the future according to the study?

The study highlights several challenges, including the impact of climate change on production, new regulations and consumer expectations related to sustainability, the trend towards local production, and the importance of maintaining a positive image of the product in the market.

What actions are suggested to maximize growth in avocado markets?

The study suggests that to maximize growth, there needs to be a focus on promotion, similar to the strategies used by the Hass Avocado Board in the U.S. This includes a significant promotion budget, consumer education, and investment in infrastructure, especially in markets like Europe and Asia.

What is the potential for growth in the European avocado market, and what factors might influence it?

The European market has a significant potential for growth, with an average consumption of 1.5 kilo per capita compared to the U.S. at 4 kilo per capita. Factors that might influence growth include increased promotion, consumer education, and infrastructure investment. However, challenges such as inflation and a lack of a strong promotional budget could impact growth.

Outlines

00:00

📚 Introduction and Presentation Overview

The video begins with Emiliano Escobedo introducing Eric Imbert, a researcher at CIRAD and publisher of Fruit Drop magazine, as a guest for a webinar focused on the avocado industry. Eric is set to present an updated analysis on the world avocado market's prospects from 2021 to 2028, following a comprehensive article published previously. The webinar is hosted by the House Avocado Board, and viewers are encouraged to subscribe for more content. Eric provides a brief background on his experience with international fruit trade, particularly avocados, bananas, and citrus.

05:01

🌍 Dynamics and Characteristics of the Avocado Market

Eric outlines the key characteristics of the avocado market, highlighting its dynamism and growth over the past decade. The market, which saw a significant acceleration in growth post-2011, has been expanding at an average yearly rate of 12%, much higher than the global food trade's 2% annual increase. The main exporters are from Latin America, with Mexico leading at 60% of the world trade, followed by Peru, Colombia, and Chile. The primary markets for avocado exports are the US, absorbing half of the exports, and Europe, accounting for about a third. The presentation emphasizes the economic and social impact of the avocado trade, especially in producing countries.

10:01

📈 Market Growth and Trade Analysis

The script delves into the origins of avocado export volumes and the significant growth in turnover over the past decade. While the US and Europe are the dominant markets, other regions like Eastern Europe, South America, and Asia are noted for their limited but growing trade shares. The market's growth is primarily driven by North America and the European Union, with other regions showing potential for future expansion. The presentation also discusses the challenges of the 2021-2022 season, marked by a sharp decrease in Mexican production and stagnation in world trade.

15:04

🌱 Avocado Production and Acreage Trends

Eric presents an analysis of global avocado production, including the total acreage dedicated to avocado cultivation and the significant increase in planting over the past few years. Latin America accounts for the majority of the world's avocado orchards, but there is a notable expansion in the Mediterranean and Africa as well. The presentation discusses the implications of this rapid expansion, particularly in Europe, where an influx of supply from various countries has led to fluctuating market prices.

20:05

📊 Projections and Methodology for Future Avocado Market

The script describes Eric's methodology for estimating future avocado production and export yields. He uses data from the ground up, focusing on acreage and yield factors, and avoids generic databases for more reliable information sources. The presentation includes an exploratory analysis under certain hypotheses to capture the main trends in production increase. The methodology involves estimating production area created by country and year, and projecting exportable production based on yield evolution hypotheses.

25:08

📈 Projected Growth in Acreage and Exportable Production

Eric shares the results of his projections, showing a significant increase in avocado acreage in full production and a marked growth in exportable production. The increase is attributed not only to the expansion of acreage but also to improvements in production practices and the planting of high-yielding orchards. The presentation forecasts that the exportable production will continue to grow, reaching around 5 million tons by 2028, more than doubling the size of world exports in 2021.

30:08

🛍️ Demand Analysis and Market Growth Projections

The script discusses the methodology used to project demand, which involves analyzing growth trends in key markets and considering consumption patterns. The US market is expected to continue growing rapidly, supported by promotional efforts and an increasing consumer base. However, doubts are raised about the European Union's ability to maintain the same growth rate due to budget constraints and market saturation. The presentation also considers the potential impact of inflation and the need for consumer education in markets like China.

35:09

🔍 Conclusions and Implications for the Avocado Industry

Eric concludes by comparing the growth of production and demand, indicating a shift from a balanced market to a potentially over-supplied one. He highlights the importance of considering factors such as climate change, new regulations, and consumer expectations in future projections. The presentation serves as a warning and a call to action for the industry to focus on demand-side management and promotional efforts, particularly in regions like Europe and Asia, to balance the expected increase in production.

40:10

🌟 Final Thoughts and Q&A Session

The video concludes with a Q&A session where Eric addresses questions about the highest growth rates in different regions and the potential for market decline. He emphasizes the continuous planting rates in most exporting countries and identifies specific countries like Michoacan, Colombia, and Peru as having significant growth potential. The session also focuses on strategies to maximize growth in various markets, with Eric stressing the importance of promotional budgets and consumer education to increase avocado consumption globally.

Keywords

💡Avocado Market

The avocado market refers to the global trade of avocados, encompassing production, export, and import activities. It is a significant agricultural sector with economic and social impacts, especially in producing countries. In the video, the market's extraordinary dynamism is highlighted, showing a sharp acceleration of growth from 2011 to 2012, with an average yearly increase of around 12 percent for avocado trade, compared to a 2 percent yearly increase for global food trade.

💡Export Volume

Export volume denotes the quantity of goods, in this case avocados, that are shipped from one country to another. The script mentions that the avocado market had an export volume of 2.5 million tonnes in 2021, ranking it eighth in international food trade by volume, but higher in terms of turnover due to its value.

💡Turnover

Turnover in the context of the avocado market signifies the total value of avocados traded globally. The script indicates that the avocado market's turnover was around 6.6 billion US dollars in 2021, placing it fourth among fruit trades and representing about 8 percent of the global fruit trade in value.

💡Market Dynamics

Market dynamics refer to the forces and trends that affect the supply and demand of a product, in this case, avocados. The video discusses the market's growth, driven mainly by North America and the European Union, and the challenges of maintaining this growth with the increasing production rates.

💡Production Acreage

Production acreage is the total area of land used for growing avocados. The script provides an estimate of the world avocado orchard size at around 415,000 hectares in 2021, with a significant increase in planting during recent years, indicating a potential oversupply in the coming years.

💡Export Yield

Export yield is the amount of avocados produced that is suitable for export. It is influenced by factors such as yield and yield evolution hypotheses by country. The script discusses estimating exportable production by multiplying the producing acreage by the export yield, which is crucial for projecting future market balance.

💡

💡Market Structure

Market structure refers to the organization of a market based on the number and size of firms, product differentiation, and barriers to entry or exit. The video suggests that the avocado market structure has begun to change, with production developing faster than demand, leading to potential imbalances.

💡Consumption Trends

Consumption trends are patterns of how and why consumers purchase and use products, such as avocados. The script analyzes consumption trends in key markets like the U.S. and Europe, noting the potential for growth and the importance of promotion in driving demand.

💡Promotional Budget

A promotional budget is the financial allocation for marketing and advertising efforts to increase awareness and consumption of a product. The video emphasizes the importance of a strong promotional budget, as seen with the Hass Avocado Board in the U.S., to drive consumption and counterbalance the rapid production growth.

💡Sustainability

Sustainability in the context of the avocado market involves environmentally sound, socially equitable, and economically viable practices. The script mentions new regulations and consumer expectations related to sustainability that could affect market access and the product's image.

💡Climate Change

Climate change refers to long-term shifts in temperatures and weather patterns. The video identifies climate change as a significant factor that can affect avocado production, potentially impacting yields in various countries and, consequently, the global supply.

💡Consumer Education

Consumer education involves informing and educating consumers about a product's benefits, uses, and value. The script highlights the importance of consumer education in markets like China and Europe, where increased knowledge can drive demand and help absorb the growing production of avocados.

💡Local Production

Local production refers to the cultivation and supply of products within the same region or country where they are consumed. The video discusses the trend towards local production as a potential factor that could impact the demand for imported avocados, especially in Europe where there is a movement towards local sourcing.

Highlights

Eric Imbert, a researcher at CIRAD and publisher of Fruit Drop magazine, presents on avocado market prospects from 2021 to 2028.

The avocado market has seen extraordinary growth over the past decade, with trade increasing by 1.5 million tons.

Mexico is the dominant exporter, accounting for 60% of the world's avocado trade, with Peru and Colombia as emerging players.

The US and the European Union, including the UK, are the primary markets, absorbing 90% of global avocado exports.

The study predicts a significant increase in avocado production, estimating around 5 million tons by 2028.

Acreage for avocado cultivation has sharply increased, with a doubling of planting rates in recent years.

The European market is experiencing a decrease in prices due to an influx of supply, signaling a potential oversupply issue.

The study emphasizes the importance of promotion and consumer education for avocado market growth.

The US market has a high potential for growth due to promotional efforts and a large budget from the Hass Avocado Board.

European Union growth may slow due to lower promotional budgets and market saturation in some countries.

China and other Asian markets are seen as areas with high potential for avocado consumption growth.

The study warns of an impending oversupply in the avocado market, urging action to balance production with demand.

Promotion and increasing consumption are key to mitigating the risk of oversupply in the avocado industry.

The presentation calls for a strategic approach to planting rates and market promotion to ensure sustainable growth.

The avocado industry must adapt to changing market conditions, with a focus on promotion to drive demand.

Transcripts

oh hello everyone and thanks for joining

us today on this fall day of 2022 for a

conversation and presentation with Eric

Amber Eric is a researcher at c-rad and

the publisher of fruit drop magazine

I am Emiliano Escobedo I am the

executive director of the house avocado

board and if you haven't already done so

please make sure to click the Subscribe

button so that you can get the latest uh

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 haasa

avocado board Eric imbert from syrad who

will be sharing a presentation entitled

avocado about to embark on a balancing

act and he'll share his presentation

World Market prospects for the medium

long term 2021 through 2028.

back in 2021 Eric and his team at searad

published a comprehensive article about

this topic and it's available at our

website

www.hosavocadoboard.com today he'll be

presenting key insights from that

article with some updated figures that

Seer hat has compiled since that article

was published in 2021

yeah and Eric thank you so much for

being with us today

um you know for those that are watching

today and don't know much about you you

or your work can you just please give us

a quick rundown of your background and

your professional history

sure yes thank you very much first

Emiliano on the John for invitation and

hello to everybody so American work I

work for 20 years for a French

investigation center that is called

cyrad I am in charge of a small

Department which is developing a survey

let's say about International fruit

trade with a great focus on Avocado

banana and also citrus uh formerly I was

how you work I have worked for let's say

10 years for a French importer uh fruit

in water

okay so that's great great experience

and we love all the work that you have

done for the has avocado board you know

all those great articles as John

mentioned there on the has avocado Board

website

if you haven't already seen them make

sure to check them out and there will be

more coming

um well Eric thank you so much

we now look forward to your presentation

so thank you very much Jen and Emiliano

for giving me the opportunity to present

this study which is describing the

possible evolution of the world avocado

Market I thank you especially because I

really think that this study is very

important for the stakeholder of the

industry why because we are very serious

indication that the market structure has

begun to change

indeed the production that was not

developing fast enough until until this

very last season to follow the

incredible increase of the demand

appears to go too fast now

so let's begin with the presentation uh

before uh presenting the study I think

it's quite relevant to have some sort of

underline the main characteristic of the

world avocado market so let's begin by

this short few slide introduction about

the characteristic of the world avocado

market and then we will go to the study

by itself

so first of all what are we talking

about when we speak about the avocado

Market in fact it's it's an average

Market in volume in the food Universe

with 2.5 million tonne exported in 2021

it's a little less than four percent of

the International Food trade as you can

see the avocado trade rank eight in

eight position uh in the full thread far

below banana apple oranges South Citrus

grape pineapple and pears

however as you can see also if we speak

about turnover the situation is quite

different because the position of the

avocado Market is much more relevant as

you can see it comes in fourth position

with around 6.6 billion US dollar in

2021 below banana grapes and apple and

it represent about eight percent of the

global filtrate in value

the main point to underline when we

speak about the avocado Market is of

course its extraordinary dynamism for a

very long period now of about 10 years

as you can see on this chart that do

represent the evolution of the avocado

trade worldwide we have a sharp

acceleration of the growth let's say

from 2011 to 2012.

we were before this period at around 55

000 tons increase by Year

from 11 and 12 we reach 180 000 turn by

year

uh it's mean then during this 10-year

period we gain the avocado trade gain

something like 1.5 million tons it has

been multiplied multiplied by 2.5 thanks

to an incredible growth rate when

compared to the other food we have an

average yearly increase for avocado for

the avocado trade of around 12 percent

by year in comparison the global food

trade has increased during the same

period by two percent by year

if we speak about turnover the increase

is even more marked as you can see it

has been multiplied by three uh 5

billion US dollar more in 10 years to

reach a little less than 7 billion US

dollar in 2021. of course with such an

enormous uh turnover the avocado Market

as a enormous economic and social side

effect especially in the producing

country

as you can see I haven't included the

information from 12 21 22 just because

it's a very a typical season

indeed we had a very sharp decrease of

the Mexican production during season

2122 and it led to a stagnation of the

World Trade at 2.5 million so this

season 21 22 it's not is not

representative at all for the analysis

let's have a look now from where do all

this volume come from

as you can see and it's not a surprise

the main part of the export come from

Latin America which is the area of

origin of the three races of avocado as

the rest of the world uh occupy a very

limited market share of around six

percent for the Mediterranean and also

six percent for Africa we have also some

limited volume exported from Oceania New

Zealand and also a bit Australia

when we look at the Expo by country you

can see that we have a player which is

especially relevant which is of course

Mexico with 1.5 million unexported in

2021 Mexico representer alone around 60

percent of the world trade

then come Peru and Colombia it's

interesting to see that Peru Colombia

and also Jalisco are relatively new

players there are newcomers just to give

you some statistics 10 years ago Peru

was exporting 60 000 ton uh in 2122 in

22 the season that has just finished

Peru will be certainly above 500 000 ton

Colombian Jalisco in 10 years ago were

even not exporting they weren't apparent

on the on the radar of the World Trade

so newcomer and a really fast growing

then come Chile with in fact a very low

crop in 2021 the normal export of Chile

are above 100 thousand ten and then

other area which are all below 100

thousand ten uh however if we look at

the data of the 20 20 21 22 season of

the export side it's interesting to see

that we have a very short development of

the military learning exporters

especially Israel the Israeli exports

last season were around 130

000 tons so a sharp increase of the

production also is taking place in the

Mediterranean

where do all these volume go so it's

very easy in fact because when we speak

about the avocado Market we are in fact

we have in fact two main markets the US

of course which is absorbing about one

half of the world exports and also in

Europe with Europe I mean the European

Union at 27 plus UK which is absorbing

something that of and then something

like one third of the global World

exports

if we if you had a Canada and Japan you

have 10 more so it means that uh all

these four player are actually being 90

of the World Trade the rest of the world

is extremely limited inside less than

two ten percent or around around 10

percent of the world trade only even if

the population is extremely strong uh

Eastern Europe is around 60 000 ten

South America 60 000 ton Asia also 60

000 ton with the Chinese market that

don't have so more than 35

000 ton Central America 45 on the gulf

country around 40.

so it's important to notice that the

World Market is based only on two pipe

and two pillar the US and European Union

if we speak about the dynamism of the

market also you can see that the

dynamism the engine of the market are

mainly North America and the European

Union this last season as you can see on

these charts that do represent the

growth the global growth of the market

and the share of This Global growth by

Harrier by by market you can see that 80

percent of the world growth has been

absorbed by North America the European

Union please UK so it means that we have

no for the moment powerful growth driver

that are susceptible to replace or or to

or to accompanize the the development uh

of the U.S and the European market

uh you see that Japan uh the the rate of

increase is very limited around six

percent by year China everybody speaking

of about China but the Chinese market is

uh increasing very very slowly three

percent Baylor the same for Latin

America and the same for the Persian

Gulf we have some Market which have

begun to take off such as Eastern Europe

and the over Asian market I mean Korea

and Thailand for example however they

are very limited in size so it means

that all the growth of the production

that will come in the coming year has to

be absorbed Again by the two leaders I

mean America North America and the

European Union

let's switch now to the study and let's

have a look to what could go on uh

regarding production and demand uh till

2028. you can find the role of the

analysis in the free drop edition of

September 2021.

first of all what is the situation

regarding the world avocado or child

just for export variety I mean has an

over exported green variety we estimate

in our study the size of the world

avocado Workshop around 415

000 hectares in 2021. no surprise again

as you can see Latin America is

representing 3 4 of your child

uh then come the Mediterranean with

around 938

000 actors then Africa seven percent

California and finally Oceania

what is very important and what is a

capital capital information regarding

the evolution of the of the production

in the coming year is the sharp increase

of the acreage of the planting we had

this last year as you can see uh the

planting During the period running for

14 15 to 2021 has been around 130

000 hectares 130 000 hectare in only six

years just to compare during the same

six year period between 8 and 9 and 14

15 the increase was around 55 000

hectares so it means that the rate of

planting has been multiplied by more

than two in the last years

and we already begin to feel the

consequences and especially in Europe

why especially in Europe because it's

Europe is a very open market uh we have

a around 12 supplying country above the

10 000 season Mark uh to supply the

European market compared to the US for

example with well of foods Michoacan and

now Mexico is representing the main part

of the supply so what can we see in

Europe first of all we can see an

increasing and uh and sharply decreasing

prices during the summer season is it's

what you can see in this small shop that

do represent the volume that are traded

during the summer season it's a yellow

bus and the evolution of the average

price is the rate curve as you can see

we have a total change regarding the

trends we were running a at the middle

of the last decade around 12 to 30 Euro

as an average price and as you can see

since 2020 prices the average price has

never ceased to decrease on our

expectation uh the first indication we

have for the 2022 season that has just

finished we confirmed the decrease with

a record low price at around 8.5 euro

per 4 kilo box

We Begin also to to to to have the same

indication even if less Mark when we'll

have a look to the winter season as you

can see the volume continue to increase

it's again the yellow bar however since

last season 21 22 where you we get a

great pressure from South America and

also for the very first time a great

pressure from from the Mediterranean

prices have decreased very significantly

and we are last season with an average

price which is within the lowest ever

recorded uh during the last 10 years

but let's have a look a bit more

globally and if we look at the World

Market and we try to see to see also the

evolution of the overview traded the

yellow bar again and the evolution of

the turnover we we see already this

change look we see that uh even we have

a sharp increase of the volume since

1617 indeed the market has gained a very

nice volume around 800 000 tons however

if you look at the turnover the growth

is much lower than in the past and we

only gain around 500 million dollar in

value so there is something happening

that's exactly why we decided to to to

to try to quantify the production

increase we know it's a very complicated

work so for that our ambition are let's

say reasonable what I will present you

today is just an exploratory analyze

under a certain hypothesis trying to

catch the main trends

let's a few words about methodology I

know it's boring to speak about

methodology but I guess it's important

because it's worth to understand the way

we have work

first of all very first point very

important for Wes we have worked with

data from the ground I mean acreage

yelled factors that may influence the

accurate and also the yield it's not at

all a statistical approach based on

prolounging the production trends

also something which is very relevant

for us is the information sources we

don't want to use the standard and often

bad quality generic database we use

firstly when it was possible the data

collected by your by ourselves and

especially thanks to a cyrad and has

avocado project we have developed since

1915 since 2019 sorry to draw quantity

country file sorry to try to see what

was the situation in the leading

exporting country you can find this

country file on the avocado World

website

when uh data collected by hostel were

not available we try to identify and get

access to the best information sources

available if any

we are quite satisfied with the

information and the quality of in the

information we get we have more than 80

percent of the information that we judge

uh at least acceptable we have some

issues regarding to Country Morocco and

Kenya because there is absolutely no

information available just a feeling of

professional but these those two

countries only represent five percent of

the world trade and we have also no

information for Ecuador Guatemala

Dominican Republic but that are quite

limited uh player regarding us

foreign

of the methodology was to estimate the

pro the producing are created by country

and by year for the period running from

21 to 28. the producing acreage is the

average of three in full stream plus via

create of yangtree so for that we had a

model of production rise of a new

Orchard in fact a global model to

simplify the analysis the analysis we

estimate the following Year Revolution

pattern uh the trees hunter in

production at three year with a 10 of

the full potential at Fourier they are

at 33 percent of the full potential 665

and full production at Android

the Second Step sorry and we also

extrapolate the acreage uh to 2025 uh

thanks to planting hypothesis during the

the period running from 21 to 25. step

two was estimating the exportation the

exportable production with a very simple

calculation in fact multiplying the

producing acreage by the export yield

taking into account yield and yell

Evolution hypothesis by country

let's have a look to the result now you

can see it on this slide that do

represent the increase of the actor in

Full production by year you can see a

total change in 1617 the increase was

around 11 to 12 000 hectares by year in

2021 from 2021 we are running between 19

to 20 000 hectares in full swing by year

why because it's very easy almost all

the players have about Chile on

California

a decreased Plantation of the plantation

rhythm in California in in Michoacan

sorry however still a nice increase

we have a very sharp increase of the

newcomers especially Colombia Jalisco

and also Morocco

and we have already a city growth or

even an acceleration of these historical

players such as Peru Israel South Africa

and Spain

what we can see also in our projection

is that this reason we recommend City or

even increase in the coming year to

reach a a maximum in 2025 at 30 and 23

000 hectares per year

let's have a look to our estimate of the

exportable production to the growth of

the exportable production

as you can see the increase is even more

marked indeed we were in 20 in 1617

around 120 140

000 exportable tons increase by year

from 2122 we will be around 270

275. why because we don't have only an

increase in the acreage but also in an

increase in productivity why because we

have an improvement on the production

practices in some country and also the

main part of the new Orchard that have

been planted this last year has a very

big production potential we speak about

clonal tree uh very Innovative

production techniques so for that we

decided regarding yes that for example

Michoacan will change from 10.5 to 11 10

by actors in Spain we estimate an

increase of 7.5 to 9 and in Colombia

from 9 to 11.5

so our estimate is that these increase

of the of the of the growth uh of the

urine growth of the of the world Trail

will increase even further in the future

to reach around 310

000 tons in 2024.

so uh 2028 enough snapshots so it's very

easy as you can see if he is according

to our hypothesis and our project our

projection the exportable production

should be somewhere around 5 million

tons so it's two times the size uh of

the World Export in 2021 regarding the

size of your child in full production we

should be around 440 000 hectares 1.5

the time of the star of the size of your

orchard in full swing in 2020.

let's switch now to our projection for

demand

what is the methodology we use in fact

we had no choice in this case and we had

to prolounge the last season season

Trends however paying a special

attention to the key Market

so in step one of the methodology we

calculate the growth of the world

exchange for the leading Market an

average of the last four season growth

this information is based on custom

statistics

and it only take into account the

Imports of the market so it means that

the the the the the local production of

the producing country commercialized

locally is not included we came to the

conclusions at the U.S market has

increased of around 70 000 ten during

this period seventy thousand ten by year

a bit less for the European Union 63 and

all the other Market below 10 000 tons

in step two of the methodology we have

decided to analyze the result taking

into an in fact a critical analysis

taking into account the key consumption

trends of those country the question was

does this trend appears to be possible

or not we have done this job for the us

because of course it's half of the World

Trade the European Union uh one one

third of the world world trade and also

China

let's have a look to uh What uh we have

seen first of all beginning by the US

Beginning by the US by with a very

simple season who is a very simple

question is the U.S market able to

continue to increase so fast with such a

an already High Country consumption by

Capital as you can see we are very close

we were very close in 2021 to 4 kilo by

capital

we are very optimistic about the

continuation of such a significant

growth why first of all because the

tools to continue to increase sharply

are here we have and if the U.S have an

enormous promotion budget thanks to what

these wonderful machines that is the hab

around 80 million dollars by year also

there is uh some very uh fast growing

segments such as the small fruit in net

also something very important is that

the potential consumer are also here

first of all because we will have an

increase of the of the number of of

consumer in the US just because of the

increase of the population uh which is

estimated by the official sources around

30 million new uh consumer uh in 20 uh

in 2030 uh within uh two-thirds of this

population

of Hispanic origin which is uh of course

a population which is over consuming

avocado also something very important

that has been shown by the HEB 3D is

that the percentage of over consumer is

increasing and it's very important

because even if these households are

representing 28 only of the global

result they are representing 7 20

percent of the sales also something

which is very encouraging that there is

more and more non-hispanic people

entering into this category

and also last but not least there is

still an enormous very good potential of

growth on the East Coast look at the map

that show the the consumption by origin

you can see that in the east coast we

are still running between two to three

kilo per capita compared to for example

to the West at more than four uh South

Central close to five and California

level eight

so we they see we decided to validate

the importance list of of conserving a

very strong growth in the U.S market

let's have also this critical analysis

for the European Union

the average consumption if is far lower

in Europe however we have serious doubt

about

an increase at the same rate as in the

past why we have also in Europe a nice

instrument to promote a via avocado

However unfortunately the budget is

still by far too low for the moment you

remember us has 80 million dollar for

330 million people in Europe we have 2.3

million euro does that mean with the

current exchange rate 2.3 million

dollars and only only and for more than

500 million people

also there is a very specific phenomenon

in Europe which is directly linked to

this lack of promotion is that we

observe the cap on the growth on the

mass developed market look at the growth

in the newcomers in the cons in the

country where consumption is already low

for example countries such as Germany

Italy and also east Europe the rate is

extremely strong around 20 by year

however look at the growth of the mass

developed Market of the continent France

for example another country consumption

is above two kilo per capita however the

growth rate if is far below than the

other Market eight plus eight percent by

year in France and also and only 12

percent in the Nordic country

so we have to take this into account we

have also uh something very special that

occur last season in 2122 is a new

challenge inflation of course these

challenges were for all the wealth

Market however we already see the first

effect in Europe in 2122 remember I

spoke about Germany at 20 percent During

the period 1520. last season Germany was

almost done or at least stable

uh

uh so uh what will be the consequences

in 2020 in 2023 in the context of 20

decrease of the supply we will see

however we can have serious doubt about

a very a continuation of a very strong

growth rate in Europe so regarding

Europe we we haven't uh kept uh the the

high potency is calculated on the

four-year average we have decided to

reduce the German growth at six percent

when passing the two kilo per capita

steps we also have decided to include a

recovery of the UK because we hope that

thanks to the end of The brexit Saga uh

the UK will recover

uh for the over we kept the last four

season growth rate that takes into

account the Slowdown of some market so

for Europe we have decided to shift from

the 12th percent increase by year uh to

an eight percent

24 to 28.

finally regarding the hypothesis we have

also decided to increase the growth for

China

you can see it's absolutely not what we

can observe for the moment you see on

the green curve that represent the

import of China

that the market hasn't increased at all

in 2020 the 2021 data show a recovery

but only at the level we had in 2018

however we consider that there is a high

potential because of cost of a large

population and also a large population

with good income

we also have to consider any investment

in infrastructure that are one of the

weak point of the of the of the Chinese

market some company has began to build

some cold storage some before opening

facility it will definitely help also we

have to take him into account the

investment in consumer education made by

the host same company so we decided for

China uh to to change the importances

your calculation by Twenty Thousand ton

increase by year During the period 2022

to 2028

let's have a look to the for all the

other Market we follow the calculation

based on the Four Season trends

the results

so globally we estimate that the average

that the World Trade should be around

3.6 million ten in 2028 with by market

an increase of about 500 uh thousand ten

in the US 400

000 ton in the UK and the European Union

and 400

000 for the rest of the world

let's come to the conclusion no and

let's have a look to the comparison of

the growth of the production and the

growth of the demand and you see that we

are changing of world we are shifting

from a balanced situation it's what you

can see in 2020 to a very unbalanced

situation in fact the Gap should be of

around 200

000 ton uh

yeah sorry the Gap would be around 80

200 000 ton from now on

production is increasing much faster

than the dinner now

so to conclude just a few words first of

all it's important to remain that it's a

very complicated studies a lot of

parameters have to be taken into account

there is lots of interest and certainty

our ambition is all is only to show

direction

however the Delta between the additional

Supply and the demand is very large so

the hypothesis of a major oversupply is

highly possible

also was to be what has to be

considerate is what can be really

counted but that can affect the

projection first of all the impact of

the climate change

it can really affect the industry in

some country over a long period look at

what we saw for years in Chile now

because of the growth what took place

this summer in Spain also uh and on the

contrary also the very abnormal high

rainfall we observe in Colombia this

last two years this last two years and

who are reducing very significantly at

the yield so it's the first parameter

which is impossible to take into account

into the projection but that should play

a significant role also we have also to

take into account the new regulation and

consumer expectation especially those

related to sustainability

uh

play a role regarding the access to some

Market

we could have for example in Europe

carbon or water footprint regulation

entering into force will hold the

supplier be adult to come to Europe in

such condition we have also to take into

account the move of the consumer to have

local production

if we speak about Europe we have a very

limited production local production in

Europe just Spain and also a little

Portugal and Greece so will this trend

affect the imported products and also

avocado in a market such as Europe

and also something which has to be

important is taken into account is the

image of the product we have some

polemics about the avocado and the

product is not defended enough in some

market for the moment and especially in

Europe

so to conclude uh I don't want to be

pessimistic this study is really a

warning but it's really it's still

really time to act first of all auto act

but first of all to decrease the

plantation needed needed it's it's

really very important we can say that

it's absolutely not the case for the

moment I have just finished the first

estimate about the planting in 2122 and

in spite of all the indication of a

changing Market the the planting rate

has increased last season up to 30 000

hectares

also we have to take into on

consideration the main strength of the

avocado Market the huge margin of

consumption growth that are existing

everywhere in the world in the foreign

Asian markets that are still for the

moment quite difficult to exploit

however also in Europe remember that in

Europe the average consumption is

around 1.5 kilo per capita only compared

to exact for two for an example uh close

to four kilo in the U.S also the local

and regional market of the producing

countries could be a solution

to conclude I think that the only

keyword is promotion

we have to continue the HIV action in

the USA and also to strengthen the

effort outside and especially in Europe

more budgeting is needed and also it's

important to notice that we have all the

the we have very strong evidence of the

avocado benefits which which can really

help less help help a lot thank you very

much for your attention welcome back and

Eric that was a fantastic presentation

analysis

um I really recommend you for taking on

the challenge of trying to project

Global Production and demand I'm I am

sure that a lot of people here in the

United States and frankly other

countries will appreciate all of your

insights that you shared with us today

um I have one question for you and then

I'm gonna turn it over to John for his

question

um my question is

what country or region

around the world do you will you see the

highest growth rate over the next five

years and is there any area that seems

to be going over you know the other way

around in terms of declining in

production whether it's acreage or you

know the production volume itself

that's a very good question Emiliano and

you know we just finished some kind of

update about the increase of acreage in

the world leading exporting countries

and I am afraid that the trend hasn't

changed at all I mean the main part uh

not to say all the exporting countries

are continuing uh have continued to plan

quite a lot of of avocado this last

years there are maybe two exception uh

Chile and California but regarding all

the rest of the world uh planting have

continued at a very big Pace these last

years with more specifically three

countries that have planted let's say

more than 6 000 hectares by year I mean

Michoacan I mean Colombia and also Peru

so the rate of growth of the world

Orchard is still continuous very to be

very very strong

and it means that in the coming years we

will continue to have a great

development of the production and that's

the main is that a major Freight of

course

thank you yeah it sounds like we have a

quite a bit of work to do on the demand

side for sure keep it up with production

John yeah Eric well that that leads me

to my question about demand and I guess

my question is in your professional

opinion What markets do you see that

have the highest potential for growth

but more importantly what resources and

what actions would it take to maximize

the growth in that in those Market areas

thanks John I I really think that this

is a big strength of the avocado Market

that the the the the potential of growth

is still enormous and I think that you

had the hab has shown the way I mean you

have built some kind of magic recipes to

to to to to uh to increase the

consumption a great promotion budget and

also a very strong pitch a pitch based

on scientific fact to show all the the

good point of avocado I mean the health

benefit of avocado and now also what you

are begin to develop regarding

sustainability and I think that it's

really really powerful uh and it will

definitely lead to an increase of

consumption in the World Market but what

is missing outside the US is the

promotion budget uh because if you look

at the consumption per capita there is

definitely big margin uh let's just

speak about Europe Europe is consuming

1.5 kilo in average per year where you

in the states are at 4 kilo per year

we have in Europe for example Italy

around 60 million people which is

consuming only seven 700 grams per year

Germany 80 million people consuming only

1.3 kilo so you see there is a big

margin of growth in Europe and also of

course outside Europe the Asian market

has just begun to discover avocado it's

true that from the moment the growth is

not really strong but thanks to more

education of the consumer more

investment in infrastructure there is

definitely a great future for

consumption of avocado in Asia also the

local market or the producing country

the regional market in South America

have also a great potential so I really

think that the problem is not to find a

growth is to find budget for promotion

that's that's really that's I mean we

agree with that we have seen tremendous

growth here in the United States because

of that promotion like you said it's the

magic recipe and it's not just for the

great guacamole recipes that we have on

our website but it's getting everybody

to chime in and to put put money into

the into developing the market

um

Eric thank you so much that is all the

time that we have uh for today John

thanks for being here also

um and thank you all for sharing you

know your knowledge and your insights

and for those of you that are watching

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we'll see you next time