Avocado - About to Embark on a Balancing Act
Summary
TLDRIn 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
- đ The avocado market has experienced extraordinary growth over the past decade, with trade volumes increasing significantly faster than other food commodities.
- đ 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.
- đ The 2021-2022 season was atypical due to a sharp decrease in Mexican production, leading to stagnation in world trade volumes.
- đ 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.
- đ 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.
- đ± A significant increase in avocado plantations, especially in countries like Michoacan, Colombia, and Peru, is expected to continue boosting production in the coming years.
- đĄ The presentation highlights the importance of promotional efforts, particularly in the US and Europe, to maintain and increase avocado consumption.
- đĄïž 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.
- đ± 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.
- đ The European market shows signs of saturation in countries with higher per capita consumption, suggesting a need for a more targeted promotional strategy.
- đ 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
đ 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.
đ 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.
đ 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.
đ± 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.
đ 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.
đ 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.
đïž 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.
đ 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.
đ 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.
Mindmap
Keywords
đĄAvocado Market
đĄExport Volume
đĄTurnover
đĄMarket Dynamics
đĄProduction Acreage
đĄExport Yield
đĄ
đĄMarket Structure
đĄConsumption Trends
đĄPromotional Budget
đĄSustainability
đĄClimate Change
đĄConsumer Education
đĄLocal Production
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
uh please remember to click the
Subscribe button so that you can get
notified about uh future Hub webinars
and that's it for today thank you and
we'll see you next time
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