Avocado - About to Embark on a Balancing Act

Summary

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

Takeaways

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

Q & A

Who is Eric Imbert and what is his professional background?

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

What is the purpose of the webinar featuring Eric Imbert?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What actions are suggested to maximize growth in avocado markets?

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

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

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