Overlapping deals this fall offer marketing potential - The Packer

Overlapping deals this fall offer marketing potential

08/15/2013 03:14:00 PM
Jim Offner

Mission ProduceCourtesy Mission ProduceAvocados go down the line for packing at Mission Produce, Oxnard, Calif. Supplies are expected to be ample this fall.With sales continuing to zoom upward, along with prices, avocado marketers say they anticipate a busy fall season, with fruit from Chile, Mexico and California flooding the marketplace simultaneously at the start.

“Consumption is up, and it looks like that will continue,” said Chris Puentes, president of Fullerton, Calif.-based Interfresh Inc.

The Irvine, Calif.-based Hass Avocado Board reports sales increases in every region of the U.S. early in 2013. The most dramatic year-on-year increase in the first quarter was in the Great Lakes and Southeast regions, each reporting 31.3 million units sold. That represented a 36.3% increase in the Great Lakes Region and 31.3% in the Southeast.

For the first quarter 2013, the Great Lakes Region had the highest regional volume increases of more than 36%, or 19 points over the national average, according to the board. In dollars, the Southeast delivered the strongest trends, up 23% in the first quarter, outpacing the national average by 9 points.

Category units posted strong gains in first quarter for two consecutive years: up 21% in 2012 and 18% in 2013.

The Hass Avocado Board reported the category achieved strong sales growth in first quarter of 14%, building on 2012’s 5% sales increase.

Prices

As summer waned, prices were higher in 2013 than a year earlier. As of Aug. 12, according to the U.S. Department of Agriculture, two-layer cartons of hass avocados from the Southern District of California were $37.25-38.25 for sizes 32, 36, 40 and 48; $33.25-34.25  for 60s; $26.25-27.25 for 70s; and $21.25 for 84s.

A year earlier, prices were $22.25-25.25 for 32s and 36s; $24.25-26.25 for 40s; $25.25-27.25 for 48s; $21.25-22.25 for 60s; $17.25-19.25 for 70s; and $15.25-16.25 for 84s.

Mexico exceeded 1.1 billion pounds of avocados shipped to the U.S. for the first time. Combined with shipments from Florida, California and Mexico, along with the last remnants of Peru’s late-summer fruit, nearly 2 billion pounds of avocados will make its way into the U.S. market this year, according to the Hass Avocado Board.

Hass avocados account for about 95% of the market, according to the board.

Strong demand

It would seem the market is crowded, but not when one considers the “unprecedented” demand in the marketplace, said Rob Wedin, vice president of sales and marketing for Calavo Growers Inc., Santa Paula, Calif.

“We need good supplies to satisfy the demand that’s out there,” he said.

Official sales data probably accounts for only part of the category growth that actually exists, Wedin said.

“I know they do studies on who’s buying and things like that, but I think we’re making progress we haven’t seen on official reports yet,” he said.

Wedin said supplies should increase by 10% to 15% in September and maintain that level into November.

Dana Thomas, president of Index Fresh Inc., Riverside, Calif., agreed.

“We’ll have really good quality and good volumes that will create a lot of opportunities for customers,” Thomas said.

Florida optimism

In Florida, the outlook appeared bright as well, said Mary Ostlund, marketing director for Brooks Tropicals LLC, Homestead, Fla.

“Avocados are usually low volume one year, high volume the next, but these last couple of years have been more on the high side,” Ostlund said.

All producing regions are ready for an active fall marketing season, said Gary Caloroso, marketing director for Escondido, Calif.-based Giumarra Agricom International.

“During the fall, Mexico and Chile will supply excellent quality avocados to the U.S. while Peru will be active in the deal through September,” he said.



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