World Avocado Market Projection for 2030 - A Paradigm Shift

Summary

In a webinar hosted by the Hass Avocado Board, Eric Amber, a researcher and publisher of Fruit Top magazine, presents an updated projection of the avocado world market up to 2030. Amber's analysis reveals a rapidly expanding market, with production outpacing demand, particularly highlighting growth in Latin America and the Mediterranean. He discusses the potential for increased consumption in the US and Europe and emphasizes the need for strategic promotion to unlock the vast opportunities in emerging markets. The presentation underscores the importance of sustainable practices and competitive pricing in the face of a predicted oversupply.

Takeaways

• 📈 The avocado market has seen rapid growth over the past decade, with an average growth rate of 10% per year, making it a significant player in the global fruit trade.
• 🌍 Latin America is the largest exporting region for avocados, accounting for over 80% of global exports, with Mexico being the leading exporter.
• 📊 The European market is more diversified compared to the U.S. market, which is heavily reliant on Mexican imports, while Europe has multiple suppliers.
• 📉 Despite an increase in volume, the avocado market has experienced a decrease in turnover from the 2021 season to the 2022-2023 season, indicating market pressures.
• 📚 Eric Amber's research and presentation provide a comprehensive analysis of the avocado market, including updated data and projections up to 2030.
• 🌳 There has been a significant increase in avocado orchard plantings, with an estimated 175,000 hectares gained in six years, tripling the rate of the previous period.
• 📊 The demand for avocados is growing, but not as quickly as supply. This discrepancy suggests a potential oversupply issue in the coming years.
• 🌱 New plantings and increased productivity are expected to lead to a substantial increase in avocado exports, outpacing demand growth.
• 💡 There is a significant opportunity for growth in the avocado market, particularly in regions like Europe and Asia, where consumption levels are currently low.
• ♻️ Sustainability and consumer expectations will become increasingly important, potentially impacting the market through regulations on carbon and water footprints.
• 🌐 The presentation highlights the need for continued investment in promotion and the development of new markets to balance the growing supply of avocados.

Q & A

Who is Eric Amber and what is his professional background?

Eric Amber is a researcher at CIRAD and also the publisher of Fruit Top magazine. He has an agronomy and food processing engineering background. He worked for 10 years at a large French importing company specializing in food business before switching to CIRAD, where he has been in charge of a department specializing in international fruit trade for the past 20 years.

What is the current position of avocado in the international food trade in terms of volume and value?

In 2021, avocado ranked eighth in volume with 2.5 million tons, accounting for 4% of the international food trade, which is estimated at 70 million tons. In terms of value, avocado holds the fourth position with a turnover of 6.6 billion US dollars in 2020, representing 8% of the world trade.

What was the growth rate of the avocado market in the last decade?

Over the last decade, the avocado market has seen a dramatic change with an increase in trading volume. The base growth rate was around 160,000 tons per year, which is about three times the growth rate from the previous period, resulting in a market expansion by a factor of 2.6.

Which countries are the major exporters of avocados?

Mexico is the leading exporter of avocados, accounting for 60% of the total volume, followed by Chile, Israel, Colombia, and Kenya. Other significant exporters include Spain, South Africa, the Dominican Republic, and Morocco.

How has the avocado export volume evolved in recent years for countries like Michoacan, Peru, Israel, and Colombia?

There has been a significant increase in avocado export volumes for countries like Michoacan and Peru, with an increase of around 300,000 tons in just four years. Israel and Colombia have seen an increase of about 70,000 tons, and Jalisco and Kenya have seen an increase of around 40,000 tons.

What is the distribution of avocado exports among the leading markets?

Approximately half of the world's avocado exports go to the US, and one third go to the European Union and the UK. This means that the remaining 20% of the world trade is absorbed by the rest of the world's population.

What are the challenges faced by the avocado market in Europe?

The European market faces challenges such as a decrease in prices due to an increase in supply, especially during the summer avocado season. Additionally, there is a need for increased promotion and investment to build consumption in the region.

What is the current state of the avocado market in Asia?

The Asian market has been slow to adopt avocado consumption, with only 5% of the trade, or 140,000 tons of imports in 2021-2022. However, there is potential for growth due to the large population with good to high income in countries like Japan and China.

What are the key factors that could impact the future growth of avocado demand?

Factors that could impact future growth include a decrease in plantation rhythm, increased promotion and investment in consumption, addressing climate change and sustainability concerns, and meeting consumer expectations for local food and product image.

What is the projected growth rate for avocado production and demand according to Eric Amber's model?

The model projects a significant risk of oversupply, with production increasing much faster than demand. The peak period during season 2023 to 2025 is expected to have a production that corresponds to twice the demand, with a progressive decrease from 2026 but still remaining heavy until 2028.

What actions are suggested to address the risk of oversupply in the avocado market?

Suggested actions include decreasing the plantation rhythm, adjusting costs, reinforcing sustainability, investing in promotion, and exploring new markets to build consumption, especially in regions with high potential for growth.

Outlines

00:00

📚 Introduction to Avocado World Market Projection

The video script opens with Indian Escobedo, the Executive Director of the House Avocado Board, introducing a webinar featuring Eric Amber, a researcher and publisher. Eric is known for his work at CIRAD and his presentations at the Royal Avocado Congress. The webinar's focus is on the avocado world market projection up to 2030, with an update to Eric's previous study. The audience is encouraged to subscribe for more webinars, and John McGuigan, the Director of Industry Affairs, is also introduced. The presentation will cover the basics of the avocado market and introduce a new model for market prospects.

05:02

🌍 Overview of the Avocado Trade and Market Dynamics

This paragraph provides an overview of the avocado trade, highlighting its position as the eighth most significant in international food trade by volume and fourth by turnover. The market has seen rapid growth over the past decade, with a significant increase in trading volume and turnover. The main exporting regions are Latin America, the Mediterranean Basin, and Africa, with Mexico leading in exports. The market is bipolar, with the US and the European Union absorbing the majority of exports. The supply pattern differs between the US, which is heavily reliant on Mexican imports, and Europe, which has a more diversified supply. The presentation will delve into the market model for 2030 and address changes in the market.

10:02

📉 Market Trends and the Impact of Supply and Demand

The paragraph discusses the market trends in the avocado trade, noting a decrease in turnover compared to the previous season. It emphasizes the fast development of the market and the significant growth in trading volume over the past decade. The presentation will cover the evolution of the avocado trade, the economic and social impacts, and the potential for growth. It also mentions the updated information for the 2022-23 season and the importance of understanding market dynamics for stakeholders.

15:03

📈 Analyzing the Avocado Market Growth and Projections

This section delves into the specifics of the avocado market growth, with a detailed analysis of the world's orchards and the increase in planted areas. The presentation shows a dramatic increase in the rate of plantation, with a peak in 2023 and a projection of the world's orchards reaching around 500,000 hectares by 2022. The data indicates a more dynamic increase in production, with new orchards utilizing innovative and high-tech production systems leading to higher yields.

20:04

🌱 Factors Influencing Avocado Production and Yields

The paragraph examines the factors influencing avocado production and yields, such as the age of the orchards and the specific models of productivity increase for different countries. It discusses the importance of using data from the field and collaborating with the Avocado World to create profiles for each producing country. These profiles, available on respective websites, provide insights into the history, production systems, and future prospects of the avocado industry in various countries.

25:05

📊 Estimating Future Avocado Export Potential and Market Imbalance

The discussion shifts to estimating the future export potential of avocados and the potential market imbalance. The model projects a significant increase in production, outpacing demand and leading to an oversupply situation, especially during the peak period from 2023 to 2025. The presentation also addresses the need to adjust the plantation rhythm and the importance of considering sustainability and consumer expectations in future projections.

30:07

🛑 Addressing Climate Change and Sustainability in Avocado Production

This section highlights the critical impact of climate change and sustainability on avocado production. It mentions the potential effects of climate change on yields and the importance of considering carbon and water footprint regulations in Europe. The presentation also touches on consumer trends towards local food and the challenges of maintaining a competitive market while addressing sustainability concerns.

35:07

💡 Opportunities for Growth and Strategic Promotion in Avocado Markets

The final part of the presentation identifies opportunities for growth in the avocado market, emphasizing the need for strategic promotion, especially in Europe. It suggests that while there are concerns about oversupply, there are significant opportunities for increasing demand, particularly in regions with low current consumption levels. The discussion concludes with a call to action for the industry to invest in promotion and to explore new markets to capitalize on the growth potential of the avocado market.

40:08

🤝 Closing Remarks and Future Collaboration

The video script concludes with closing remarks from the hosts, thanking Eric for his insights and collaboration. They encourage viewers to subscribe for future webinars and to visit the House Avocado Board's website for updated reports and information. The presentation ends on an optimistic note, emphasizing the opportunities available in the avocado market and the importance of continued development and promotion.

Keywords

💡Avocado Market Projection

The term 'Avocado Market Projection' refers to the predictive analysis of the future state of the avocado industry, particularly in terms of supply and demand. In the video, Eric Amber presents a detailed study on the avocado market's potential growth and challenges up to the year 2030, indicating a significant risk of oversupply due to rapid expansion of avocado orchards worldwide.

💡Eric Amber

Eric Amber is a researcher at CIRAD and publisher of Fruit Top magazine. He is the presenter in the video, sharing his expertise and findings on the avocado world market. His background in agronomy and food processing engineering, along with his role at CIRAD, lends credibility to his analysis and projections on the avocado trade.

💡CIRAD

CIRAD is a French agricultural research center for international development. In the script, Eric Amber mentions working at CIRAD for 20 years, where he is in charge of a department specializing in international fruit trade. The organization's research contributes to the data and insights presented in the avocado market study.

💡Fruit Trade

Fruit trade encompasses the business of buying, selling, and transporting fruits internationally. The video discusses the avocado market's position within the broader context of fruit trade, highlighting its growth and economic impact, especially in relation to tropical fruits like bananas, citrus, mangoes, and pineapples.

💡Global Avocado Production Capacity

Global avocado production capacity refers to the total amount of avocados that can be produced worldwide. The video script mentions a comprehensive article by Eric Amber that discusses this capacity, indicating a dramatic increase in avocado trade volume over the past decade.

💡Avocado Exports

Avocado exports are a significant part of the international fruit trade. The script identifies Latin America as the leading exporter, with Mexico being the top country, accounting for 60% of the total export volume. The discussion on exports helps to understand the distribution and market dynamics of avocados globally.

💡Market Dynamics

Market dynamics refer to the forces and factors that influence the supply and demand in a market. The video script uses the term to describe the rapid growth and potential oversupply in the avocado market, as well as the impact of various factors like climate change, consumer expectations, and sustainability regulations.

💡Sustainability

Sustainability in the context of the video relates to the environmental, social, and economic aspects of avocado production that ensure its longevity and responsible practice. Eric Amber mentions that new regulations and consumer expectations regarding sustainability could impact the avocado market, emphasizing the need for ecological and social responsibility.

💡Promotional Budget

The promotional budget mentioned in the script refers to the funds allocated for marketing and promoting avocado consumption. It is highlighted as a critical factor for driving demand, especially in regions like Europe where increased promotional efforts could boost avocado sales.

💡Oversupply

Oversupply occurs when the quantity of a product available in the market exceeds the demand. The video warns of a significant risk of oversupply in the avocado market by 2030 due to the rapid expansion of avocado orchards and the inability of demand to keep pace with production.

💡Consumer Behavior

Consumer behavior in the script refers to the patterns and preferences of consumers in relation to avocado consumption. It is discussed in the context of how changes in consumer habits, such as a shift towards local food in Europe, could impact the avocado market and the need to understand and adapt to these behaviors for future growth.

Highlights

Eric Amber, a researcher at CIRAD and publisher of Fruit Top magazine, presents an updated avocado world market projection up to 2030.

The avocado market has seen an average growth of 10% per year, making it a significant player in the global fruit trade.

Avocado trade turnover has tripled from four billion to 6.1 billion between 2011 and 2022-2023.

Latin America accounts for over 80% of global avocado exports, with Mexico leading as the top exporter.

The US and the European Union, along with the UK, absorb 80% of the world's avocado exports, indicating a concentrated market.

Eric Amber's model predicts a significant increase in avocado supply, potentially leading to oversupply issues by 2030.

The presentation includes updated figures and a revised model to reflect new data and insights since the first edition in 2021.

The demand for avocados in the US is expected to continue growing, supported by promotional efforts and a natural increase in the population.

In Europe, the growth of avocado consumption may be hindered by low promotional budgets and the impact of inflation.

Asia presents a significant growth opportunity for avocados, despite currently accounting for only 5% of the trade.

The model suggests a peak in avocado production between 2023 and 2025, outpacing demand significantly.

Eric Amber emphasizes the importance of adjusting costs and reinforcing sustainability in response to a more competitive market.

The presentation calls for a decrease in the rate of new plantations to balance the market and avoid oversupply.

The potential impact of climate change on avocado yields is highlighted as a critical factor that could affect projections.

Consumer expectations regarding sustainability, including carbon and water footprint regulations, may influence avocado trade.

Eric Amber concludes by identifying opportunities for avocado market growth in the US, Europe, and Asia, despite the risks of oversupply.

Transcripts

hello everybody and thanks for joining

us today on the summer day of 2023 for a

conversation and presentation with our

friend Eric Amber

Eric is a researcher at sirad and also

publisher of fruit top magazine

I am Indian Escobedo and I am the

executive director of the house avocado

board and if you already haven't done so

please make sure to click the Subscribe

button so that you can get the latest

webinars from the house avocado board

also with me today is my colleague John

mcguigan he's the director of Industry

Affairs John

hello folks it's a pleasure to have with

us today a very good friend of the Haas

avocado board Mr Eric and bear who will

be sharing a presentation entitled

avocado World Market projection up to

2030 version 2.0

back in 2021 Eric and his team published

the first edition of this study which

was then entitled avocado about to

embark on a balancing act the world

prospects for the medium long term 2021

through 2028 this comprehensive article

about global avocado production capacity

is available on

www.passavocadoboard.com and today he'll

be presenting key highlights from that

article with updated figures that sir ad

has compiled since the article's first

publication it shows an even higher

supply curve capacity and Eric will

share data with us so we can learn from

it Eric

yes and by the way for those of you out

there that don't know uh Eric

um I I he he you can and he's he's now

famous because he did a great

presentation at the Royal avocado

Congress and of course his magazine gets

great pickup all over the world but um

Eric can you please give us just a quick

rundown of your background and

professional history so that those that

are watching this presentation know a

little bit about you

yeah sure thanks to giving me the Flora

Milano uh I am an agronomist and the

food processing engineer I work during

10 years for a big French importing

company specializing the food business

and then 20 years ago I switched for a

research center called cyrad where I'm

in charge of Department which is really

specialized in the international fruit

trade and to be more specific we are

specializing banana Citrus avocado mango

pineapple let's say all kind of tropical

fruits so that's more or less what we do

with a a magazine which is called free

trap and also some Weekly Newsletter

that try to help the the the the the the

the stakeholder of the industry to

understand better the market

that's great so that is fruit trap

magazine

um Eric thank you so much uh for your

introduction and if you wouldn't mind

sharing your screen and we will go ahead

and mute ourselves so that you can

share the latest an update uh updated

information

okay

did you see an ice cream

yes we do see it thank you okay so as

John told you we have developed two

years ago a model uh that tried to give

a vision of what could be the avocado

Market uh in 2030 uh we have work uh

these last years on the model and uh try

to get some new data some new input and

we are now proud of presenting version

two uh

it is possible to find it also in the

last edition of free top mega magazine

uh so you will see some some new

information regarding this Market model

the presentation will have two parts uh

quickly in the first part that will

remind you the basics of the world

avocado Market with some updated

information in fact uh I just finished

to have some some ideas about the last

season 22-23 so I included it in some

slide of this presentation and then in

the second part we will have a look

towards a new model and our New Prospect

for 2030.

let's begin now with some information

some very generic information about the

avocado trade uh so in 2021 uh this is

the last season for which we have a

complete data for all fruits I didn't

include also 2122 because it was a very

special season remember Mexican

production was down to of course it had

some big consequences on the on the

avocado trade so as you can see on this

table the avocado Market is quite a

moderate an average Market in the in the

food world as you can see it only come

in eight position with 2.5 million tons

four percent of the International Food

trade that is estimated at 70 million

ton in 2020. it is far below banana

apple and oranges the three liters

if we have a look to the information in

turnover you can see that the situation

is quite different indeed avocado come

in a much better position in fact in the

fourth position with 6.6 million uh

story sequences billion US dollar in

2020 eight percent of the world trade uh

just after banana grapes unhapple uh you

will see the updated information for the

avocado trade we are we we we should be

around 2.6 2.7 million ton in 20 to 23

and regarding the turnover I I think

that it's a good example of a uh the

topic of this presentation more pressure

on the market the turnover estimated for

the last season is around 6.1 billion

dollars so we have decreased the

turnover compared to season 2021

still going characteristic of the world

avocado Market it's of course it's

incredibly fast development and you can

see that since let's say 10 years 10 to

11 12 years the growth of the market has

changed totally you can see that on

these charts that do represent the

evolution of the avocado trade in

million tons we were increasing till

season 11 12 at the base of around 55

000 tons uh these last 10 to 11 years

the best as the base has been something

like three times that uh something like

160

000 ton by year so you see a dramatic

change uh of the of the of the of the of

the trading volume we gain the last 10

years a bit more than 10 10 years 11

years 1.6 million tons so we

multiplicate uh the market by 2.6 with a

growth rate an incredible growth rate of

10 percent by year compared to a base of

two person from the global fruit trade

in turnover we gained something like

four billions to reach 6.1 billion in 26

in 2223 so it means that we multiply the

turnover by something close to three uh

of course with huge economic and social

impact especially in the producing

chemistry

foreign

come from

again as you can see it's not updated

information in fact I have not only

considered Consolidated information for

2223 so it's information for season 21

or season 21 22. as you can see the the

the the the the the big export area is

with no surprise Latin America more than

80 percent of the world exports uh then

come the Mediterranean Basin and Africa

with something like six percent

if we have a closer look and try to see

who are the more exporting countries uh

again it's not a surprise Mexico is of

course a leader Mexico itself with 1.5

million tons is exporting 60 of the

total of the volume with of course

Michoacan but also Jalisco which is

developing and as developed firstly this

last year and is no above the hundred

thousand tons step

with something like six hundred thousand

ten again in 2122 then four player

around hundred thousand terms Chile

Israel Colombia and also Kenya all the

other ones are below 70 000 ton I'm in

Spain South Africa Dominican Republic

and Morocco

interesting to see also if we look at

the evolution of volts volume this last

four year that some country as well have

really been extremely Dynamic it's the

case for Michoacan and Peru you see an

increase of around 300 000 ton in the in

in only four years also Israel and

Colombia something like 70 000 ten and

Jalisco and Kenya something like 40 000

tons

in these uh fast developing exporter you

see that we have newcomers such as for

example Jalisco but also Colombia and

also Peru in fact 10 years ago Peru was

exporting 60 000 ten today it's 10 times

more Colombian Jalisco were even not

appearing in the rather 10 years ago so

a fast development for some players

where go all these volume it's very

simple because the avocado Market is a

bipolar Market we have roughly about

half of the world exports that go to the

US

one third that go to the European Union

and the UK

so it means that all the rest and the

the world seven billion people only

absorb 20 of the World Trade so do you

imagine the the potential of growth of

this Market

uh and if we quit Japan and Canada there

is only 30 percent going to outside the

four big the four leader leading Market

it represents only 350 000 tons mainly

in Latin Americans the rest of Asia I

mean uh Asia without Japan uh hundred

thousand ten each and also the girls

country and Eastern Europe around 40 to

50 000 and each

so it means that the World Trade remain

concentrated at 80 percent in the US and

in the European Union with UK and we

don't see any major move any major

growth driver for the moment so in the

future at least in the near future the

growth of the market will continue to

rely mainly on the US and on the

European market

last characteristic which is very

interesting regarding the avocado trade

is that we have a very different Supply

pattern of the two giant market I just

spoke about

in the U.S things are really simple the

US market is really very mexicanized in

fact because of fetal sanitary

regulation and also because it's a very

natural and easy to work market for

Mexican Traders uh it means that 90 of

the volume of the supply in the U.S rely

on Mexican foods the Panorama is totally

different in Europe as you can see we

have more than 10 Majors to player

Peru's leading with with around 35

percent of the volume but we have also

nine hover suppliers which are

representative let's say with volume

around five to ten percent of the global

Supply it is a good point at some

extents because of course it gives a

better resilience of the market I mean

in case of a drop of the production in

one country the over could compensate

but also and especially in this new

context of Greater of of a sharply

climbing Supply it's it's also a greater

exposition to to possible EX oversupply

so let's have a look now to the second

part of the presentation and the uh

let's let's speak about the model on all

the market could be in 2013. first and I

think that it's interesting to notice we

already see that the the Panorama has

begun to change Downstream and again we

see that mainly in Europe because Europe

is a very open-market subject to to to

to to to to catch the the changes very

quickly look at these charts that do

represent for the summer Avocado Season

in Europe so I mean the counter Seasons

Forest mainly supplied by Peruvian

fruits South African food Kenyan fruit

look at the evolution of volume it's the

orange bar and look at the evolution of

the price list it's it's a brown it's a

brown curve you see that volume have

continued to increase very significantly

indeed something like 50 000 turn by a

year however look at the prices we were

running till season 2017 at a nice price

of around 11 30 12 Euro but we have

reached last year 8.5 Euro and the

decrease has been tremendous these last

three years just to speak about what we

are facing for the moment the current

price in Europe is between five to six

euro per box because we are already

fluid with Peruvian Foods and if we have

a look to the World Market if we change

a little the scope of our analysis we

see that something is is is is is is is

is going on also uh you can see it on

the same same bar that stem chart that

do represent the volume traded worldwide

and you see that that continued to

increase quite significantly this last

year and look at the evolution of the

market in value in fact apart season 21

22 where we miss a lot of food from

Mexico the turnover of the World Market

has remained almost stable this last

year

so it gives us the the ID of trying to

forecast the market uh such changes were

too important uh and we we needed to do

something and I don't want to speak to

men to spend too many too much time

about

the methodology because it will be

boring

but I just wanted to underline two

points first our ambition is reasonable

this is a very complicated work to try

to to forecast the market in at the

10-year

period so our ambition is really

reasonable

uh slogans is about methodology is that

what what you will see is not a

statistical approach it's not a

statistic statistical model uh what we

wanted to do Israeli to work with data

from the field I mean what are the hack

reagents producing country what are the

yield what is a production system or

does it work how can it evolve in the

future uh if it could and if it could

influence for example the yield so it's

exactly what we have tried to do and we

have done that based on uh the

incredible work we have made thanks to

the asavocado Bob uh which we which

which we are collaborating on on a very

interesting project uh this project is

to try for each producing country it's

big producing country especially the one

who sent through to the us to have a a

midterm vision and to understand the

industry in those countries so we have

written with the help of the has avocado

World some little leaflet 20 25 Pages

where we try to give information about

the history the area of production the

production system the hackry age we have

done this work for Peru from Mexico for

chile for Colombia for California Spain

Portugal Morocco is in progress Greece

has just been released and we will

continue to welcome that on the future

all these profiles are available on the

as avocado called website and also on

the free trap website

so let's have a look now to the

differences between the version one and

the mode of the model and the version

two of the model

first we get the access to a more

precise information about hackry age in

some countries and also we have decided

uh to to use a new model of uh increase

of productivity of a younger child in

version one we we are using a let's say

a standard model for all countries in

this version 2 we try to use a specific

model to each country to take into

consideration that in some countries the

ultra reached its full potential at five

years for example in Peru but it's

Michoacan it's seven year so it changed

quite significantly the the the the the

the the the increase in the production

in the future

and also as I told you it's a very

Dynamic model we get new information

every day so we try to include this new

information and especially the new

acreage estimates thanks first to new

official data uh it's the case for

example in Peru uh pro has

released a new estimate last year with

ten percent ten thousand hectare more

also we included whole information we

get this last year for from the field

trip we have done in Colombia we

included 12 000 hectares more in Spain

to further nectares Morocco 3.5 Portugal

2.5 we also included the small exporter

that were not included in model one uh

it's not a big deal

independently prioritize 2000 Ecuador is

a thousand five hundreds Guatemala 605

6005 but all together it's 10 000 actors

so it gives us the vision of a larger

World Orchard an increase of around 40

000 hectare compared to version one

so it gives us a new map of the of the

avocado world at least for the for the

export variety so we estimate now the

word Orchard at around 500 000 hectares

in 2022 with three third in Latin

America around 9 000 in the

Mediterranean six percent in Africa four

percent in California

this new data show us a a an even more

uh Dynamic uh increase of your chart as

you can see on this chart that do

represent the evolution of the world

Orchards

we gain 175

000 hectares in six year time so it

means something like 30 000 hectares by

year just to compare in the former

six-year period I mean 2010 2016 we

gained a total of less than 60 for the

nectares so less than ten thousand

hectares a year so it means that we

triplicate this last year the rhythm of

a plantation the yearly rhythm of

Plantation

what are the results if we include this

new data in the model first let's have a

look to the annual growth of the world

planted area uh the projection of the of

the annual growth of the well planted

area

it is expressed in hectar in full swing

so I mean we use the small model of

Entry of production of a new workshop to

try to transform the global acreage in

uh let's say fully productive acreage

and it's what it's presented what you

see is the increase in acreage every

year so you see that we change totally

the Panorama we are we were running

around 10 to 12 000 hectares by year uh

before 2020 and we have quickly reached

a peak

visual 2023 at more than 30 000 hectares

and you see that we will remain

extremely heavy close to this rhythm in

the coming years and just beginning to

decrease in 29 and 2030 decreasing to 22

23 000 hectares why such an increase

just because all the players have

besides Chilean California

uh even Michoacan even if the the rhythm

of Plantation has decreased it is quite

significant however uh we have a sharp

increase of the newcomers such as

Colombia Peru Jalisco Morocco and we

continue to have a steady growth or even

an acceleration of the historical one

I mean Israel South Africa and Spain

so as you see we will have a peak uh

between 22 and 28 and maybe a Slowdown

afterwards what are what what is the

situation is we try to analyze the

export potential you see that the

increase is even stiffer why because we

curulate the increase in acreage and

also an increase in productivity because

in fact the new Orchards that are

planted are very Innovative there is

there is its micro irrigation its clonal

tree is high-tech production systems so

the accurate the yields is much better

and as you can see the result is that we

will change from a reason if around 120

150

000 ton by years since 2019 to something

close to 400 000 tons uh the coming

years decreasing slightly at the end of

the period but reminding extremely heavy

uh so as you can see the the hash

different with version one it's exactly

the same Trend but there are just more

more marked because of more hack reagent

plane and also more progressivity and a

higher Peak this is due to the new model

we take into consideration for the

universals

let's have a look now to the demand side

uh remember again I will go very quickly

regarding methodology just to remind you

uh that what we use is the average

growth of the last four year for all the

leading Market it's mean an increase of

the trade of something like 180

000 ton by years mainly thanks to 70 000

ton by years in the US and also

something like 70 000 ton by year by uh

for the European Union and also second

point is that we have we try to add a

critical critical approach of this data

trying to see uh regarding the the

consumption per capita is if this

increase makes sense or not it's exactly

what I wanted to show you now trying to

to analyze a bit if such an increase is

possible first in the US uh the case the

question makes sense because we have

already very high consumption in the US

we are around 3.6 kilo per capita in

2022 and remember

2022 is also a result the result of a

small Mexican crop so we have already a

a very strong consumption in the U.S

however we believe that the U.S market

will continue to develop a such a navy

base why

first because the tools to make uh the

consumption increase per year with a

huge promotion budget uh had is managing

something like 80 million dollars by

year that is spent in a very efficient

way thanks to the production

promotion system in place also there is

a very Dynamic Market segment which is

the small Putin Nets

second point which is very important

very important is that the potential

consumer are here I mean just because of

the natural increase of the population

we will have 30 million new consumer new

potential consumer in 2030 in the US

two-thirds of them over consuming

Hispanic people also a very important

point that has the has avocado both

studies show that the proportion of over

consumer is increasing very

significantly and it's very important

because this small range of the

population something like 28 percent of

the household are representing 70

percent of the sales and what is also a

very good signs is that more and more

non-hispanic people are entering into

this category

finally and this is maybe a very

important point is that there is still a

good potential of growth especially in

the east coast because there is a large

population which is still under

consuming as you can see the consumption

on the west is around 4.4 to even 4.8

kilo in California in the east coast we

are have everywhere between three to

three point five kilo per capita so we

decided to say that we will continue and

we validate the growth hypothesis of

something like 17 67

000 ton by year in the US

seminalize this for Europe however we

will not get will not come to the same

conclusion why we can first think that

because of the low conservation

especially compared to the US the

European Market has an ability to

increase very quickly in the future it's

true however it's it's it's we have some

weak point first the wow promotion

budget it's not it's a non-monetary

budget is still very low for the moment

we have two to three million uh uh Euro

uh to spend in promotion for more than

500 million people there are some very

good but there are some some much better

Prospect with new country entering into

the world system uh

and maybe very soon so it's a very good

news however for the moment the budget

is quite reduced also and this is

totally linked with the limited budget

we have regarding promotion we can see

that we have some markets that are not

growing any longer because of a very

close correlation between consumption

level on on the growth rate you can see

it

especially if you look at the Nordic

countries it's a purple curve you have

just here you see that they are within

the highest consumer per capita 2.3 to

2.4 kilo however the consumption has

been quite flat this last year we have

seen also quite a a a slowing down in

France this last year after reaching the

two kilo per capita Mark uh

also we have the UK Market as you can

see which is not extremely Dynamic

certainly because of the brexit effect

with the stability at 1.4 1.6 kilo

between 2018 and 2000 and 2021.

foreign

driver the main Prof the main growth

driver where till 2020 Italy uh and also

Germany till 2020. it's very important

because both countries have a large

population 60 more than 60 million

people in Italy more than 80 in Germany

and consumption level is quite low 700

gram in in Italy and 1.3 kilo only in

Germany

also there is something new that

appeared recently in Europe and its

inflation of course that affected very

significantly some Market especially the

novel one uh as you can see they switch

from a very slight increase to a

recession in 2022 again it's a purple

curve and also and it's a big difference

that it's some it's it's somewhat

worrying in Germany it's a record

remember Germany was one of the leading

if not the leading group drivers however

these last two years it has been totally

stable because consumers are extremely

susceptible to price increase over there

so for Europe which I we we we decided

to change a bit the hypothesis uh and to

take into account these uh reduction of

the growth due to the inflation due to

the captain effect we have on the market

we are consuming the best so we have

decided to reduce the 71 000 ton by year

by 55 stand by year During the period 23

reaching again only again only in 2025

71 turbo years

build market for which we we have a

close a close look and try to see what

could be the evolution of the of the of

the of the trade it's of course azure

Asia could be a huge Market because it's

60 of the world population however

regarding avocado it's only five percent

of the trade only 140 000 ton of import

in 2122

we have seen some nice move in Asia till

let's say season 1890 and then almost

nothing in fact uh the Japanese and the

Chinese leader are stable to Dawn this

last year with a very significant drop

in Japan certainly look link to also

inflation uh on uh inflation effect only

South Korea Singapore and Malaysia are

inclusive increasing slightly is what

you can see on this on the on the curve

however there are still some some small

market for the moment

the provisional data for 2223 as you can

see don't don't really change the thing

we have maybe a slight wake up of the

Chinese market however Japanese Japanese

is decreasing further

however we have decided to take into

consideration that there is a big growth

potential there why because there is a

large population with good to high

income in Japan we have 126 million

people uh with a with with the revenue

around 40 000 US Dollar by year in China

just if we consider uh the the share of

the population that you that have uh uh

uh uh good Revenue I mean revenue above

34 000 US dollar it's represent

according to a Maxine's day study

something like 100 million people Korea

is 52 million people with also a nice

purchasing power and as you can see on

the chart below the consumption in both

Market is quite limited uh in Japan we

are around 8 500 grams in China if we

only consider the 100 million people I

spoke about before it's 600 grants Korea

only 300 compared to 1.6 kilo in in

Europe and again around 3.6 kilo 3.7

kilo in the US

so on our study we decided to bet on the

growth on the midterm uh with uh let's

say uh globally an increase of 20 000

ton by year instead of what we calculate

that was around eight thousand times

so let's come now to a conclusion and

Let's cross the production it's a green

curve and we demand

you see that we are changing of world I

will say I mean uh we were almost on the

balanced Market till season 20 19 and

20. uh if we look with or with an

increase of the production and an

increase of the demand of something like

200 000 ton by year

however we are heading towards a very

significantly unbalanced Market in the

coming years the production is

increasing much faster than demand uh at

the peak period I mean during season 23

to 25 we should have a production that

correspond to twice the demand and then

a progressive decrease from 2026 but a

supply that will remain extremely heavy

till 2028.

if we change the scope and try to to to

to have a look to the accumulated Supply

and the accumulated demand uh don't

don't forget that the excess in Supply

is heading year after year it means that

we should

change from another Supply around 10

percent by year nowadays to something

close to 28 30 from 2026.

who is also an inversion before the

increase in volume was much quicker

during the summer season it's a yellow

curve uh instead of the winter season

it's it's a it's a

wrong curve and you will see that in the

future it will be the contrary so I mean

the increase in volume during the winter

season will be sharper than during the

summer one

let's conclude no uh first of all I want

to repeat again that there are some

uncertainties in in this kind of studies

so the model only shows the direction

it's very important

second point however the gap between the

additional Supply and the additional

demand is very large so rarely we

strongly believe that there is a

significant risk of over Supply maybe

something like 30 percent

second point and this is also a critical

point some parameters are impossible to

take into account but they may highly

impact the projection and especially of

course the climate change

it can impact really very significantly

this is a yield in some countries look

for example what took place this last

year in Colombia years were very poor

because of the two wet weather look at

what is going on also in some very dry

area such as for example the axarchia in

Spain where this area is suffering from

very very strong Yale losses because of

lack of water

also some new regulation and consumer

expectation regarding sustainability

should have an impact first the carbon

and water footprint regulation they

could enter into Force soon in Europe as

well as a state sustainability leveling

it means that will hold this volume be

allowed in the European market in this

context

also we can see it in Europe but I guess

maybe in the US we have a move of the

consumer to more local food will it have

an impact on the imported avocado

also the image of the product it's quite

a challenge in Europe where we have some

controversies that need to be addressed

with scientifically proven analyzing

so to conclude just three words the

first word is decrease decrease of the

plantation Rhythm we have some very

first positive sign in 2023 however 21

and 22 where workout breaking years of

Plantation

we have a strength and we don't have to

forget that in the avocado Market

remember the market is increasing by

around 10 percent by year it's

incredible in the food trade so we have

an attractive product uh we have a very

good current dynamic

we have huge margin of growth that are

not or underexpirated and rarely the

promotion model of the Hub is showing

the way

there is a great possibility of

developing the foreign Asian market the

local and regional market of the

producing countries are also

opportunities but I guess that in the

future Europe is is is also a market

that have to be kept in mind we have

their high potential uh again the

consumption is only 1.6 kilo per capita

compared to 3.6 in the US so uh

we we have some work to do there and

remember that Europe will be with the

states as the main growth driver in the

coming years but the third world also

has to be taken into consideration we

have to be prepared to a more

competitive market we need to adjust

cost and also to reinforce

sustainability because it will be part

of the competitivity especially in some

markets which are quite Advanced on that

I mean the European one remember that

the supermarket will choose cost

effective supplier offering the best

ecological and social warranty

I thank you very much for your attention

and if you have questions I will be very

happy to answer it

well that was very exciting uh and very

well thought out presentation Eric

um and I like the update that you did

from the first version

um I I have one one well one comment

first of all

I do want to commend you for as I said

last time you know for taking on this

challenge of trying to project

Global Production and demand and really

taking into consideration all the

factors that you are seeing from the

field because

like you said in your presentation you

know you're getting the data from the

field you're talking to people all over

the world

it's not just based on numbers and

charts and statistics obviously there's

some statistics and math in in your

model but

let me ask you uh you know

obviously after the world avocado

Congress presentation a lot of people

coming together there was a concern of

like

there's this huge growth coming do you

do you think

um

it's going to be what like what country

or what region is it that you're gonna

do you expect to see the highest growth

rate is it going to continue to be Latin

America or what are you seeing also in

Africa or other countries where would

you say that the this growth rate is

going to be coming from let's say

regionally

speaking and then if you have some

thoughts at the country level that would

be great to yes it's a very good

question Emiliano I think that uh if we

look at what has been planted these last

three years that has not entered into

production we have a clear vision of

what goes on uh in let's say the fact

five next years and uh that are very

simple in fact we have a lecture bunch

of five countries five areas where we

have something like 15 000 hectares

planted these last three years we have

Peru which is a bit above the 15 000

hectares planted these last three years

we have Colombia we have Jalisco and we

have Michoacan and also we have a part

of these Latin American country we have

Mediterranean all together the

plantation the last three years in

Israel in Spain in Morocco in Portugal

are around 15 000 hectares also so you

see we have this big bench that will

really lead the increase in the coming

news you spoke about Africa Kenya is

very complicated to have a clear region

so I will not enter into too much

details because it's really one of the

weak points Kenya we have really very

little statistic viable it's a bit

complicated and South Africa is

advancing but not at the same pace

yeah because I mean costs have to be a

major driver too right so you can't

I mean I suppose the production costs in

some of the northern hemisphere

countries especially in Europe like in

Spain and it's just going to go up

there's no question yeah and there is

also another point I mean you know that

has to be on the line

um we spoke about acreage but we'll hold

this hackerage transform into large

Productions that's a big question yeah

in somaria at least for example we see

that for the moment the Royals in

Colombia I not are not the one expected

we have some let's say Pioneer areas in

Samaria for example in Morocco we have

some internal areas that has been

planted quite far from the sea very hot

in summer very cold in Winter also in

Spain we have some areas which maybe are

not the most shootable so we have to see

in the future if uh all these new

projects are really turning into a

success of notes there are some some

some some some some consideration about

that and I guess in the version 3 of the

model

that I will prepare for the future I

will try to take that into consideration

it's it's it's it's almost impossible to

take that into consideration uh with

let's say very rational information but

we can let's say make some hypotheses of

decreasing yields for example in let's

say fragile or a bit sensitive areas and

it's what I will try to do in the third

version yeah that's interesting because

I've seen it too like people are pushing

to go to

find new areas where they could produce

and you know we've seen it in Peru going

far north et cetera maybe that's what's

at the end we don't really know if the

yields will be as high as as we've seen

in other places so that's a really good

point John do you have a question for

Eric yeah I I'd like to switch it over

to the demand side of the equation

um and we see where the markets are

right now and where the United States

and and Europe are and the Asian markets

have been slow to come to the party but

I think looking at this growth curve

um on on the demand side Eric where do

you think the future growth is the the

opportunity where do you see the

opportunity but I think more importantly

what are the resources and what are the

actions that are going to need to be

taken to fulfill that demand creation

look opportunity John I see them

everywhere

look even in the U.S where we have a

huge consumption uh 3.8 kilo 3.6 1.8

kilo per capita we continue to increase

at a very nice Pace we see in the east

coast some some margin of development so

in this U.S market we still have

opportunities in Europe again I strongly

believe around about Europe we have some

huge uh country with with a very nice

population which are almost which are

consuming very low volume of avocado uh

but the driver of course in Europe is

promotion uh definitely and we need to

to to to to to to put more budget into

the production into the promotion uh

producer I need to have invested a lot

in new acreage they have to to invest

now uh also and much more significantly

in promotion it's really a key point and

also again remember about what we

presented about the rest of the world uh

we have for the moment the main part of

the trade-off to Market we have seven

billion people in the world that do not

consume or consume very little avocado

so really we have a lot of doors to open

uh

and I think that there are some some

very very large opportunity for for the

avocado market so again these studies

may be a bit worrying but look at the

good side look at the increase in demand

we are 10 by your no over Foods or maybe

a bottle of blueberries as such an

increase a yearly increase of the market

we have huge opportunity on Avocado

Market but we have to to build now this

consumption and we have to invest to

build this consumption as you have done

in the US

well I like I like to think that we can

end this presentation on a very

optimistic note that the opportunity is

there in front of us

absolutely I agree with you John

um well Eric that's all uh that the time

that we have uh today I I want to thank

you very much for being with us and

sharing all of your knowledge and

insights John also thank you for being

with us today

and for those of you that are watching

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also come back and check on our website

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publishing uh all the uh fruit drop uh

reports on on on the different countries

I know we have plans for uh the coming

years to continue developing those and

renewing and basically updating those

country reports so make sure you check

on our website regularly

that's it for now Eric thank you very

much nice to see you have a nice summer

John thank you Eric we appreciate your

participation in your partnership it's

been grand

thank you very much it was a pleasure