Organic avocados are generating interest among consumers and bringing higher returns for growers, marketers say.
“Organic seems to be growing,” said Bob Lucy, partner at Del Rey Avocado Co. Inc. in Fallbrook, Calif.
California organic volume accounted for slightly more than 5% of the state’s avocado crop in 2014, according to the California Avocado Commission.
Lucy describes his company as a “very big player” in the California, Mexico and Peru organic avocado deals. He said the company is seeing growth in all three regions.
The so-called “premiums” for organics are increasing, too, Lucy said.
“We’re basically estimating we’re going to do about 20% more on organic and we’re hitting that — actually, in some cases higher,” Lucy said.
One possible explanation: “We’re actually seeing a 35-40% markup.”
Retailers are getting involved in organics more than ever before, Lucy said.
“Your chains will have a conventional avocado and a bagged program on a smaller size and have an organic. It may not be a huge display, but there’s so many of those stores that the sheer volume of those stores is keeping the pull on organic very strong,” he said.
It adds up to more organic fruit moving off shelves, Lucy said.
“If they can sell a couple of boxes a week, do the math,” he said.
Eden Prairie, Minn.-based C.H. Robinson Worldwide Inc. noted positive trends in a category that accounted for only 2.2% of sales in 2013.
“Organic avocado sales in dollars and pounds were up more than 20% in 2013, nearly doubling that of its conventional counterpart,” said Jose Rossignoli, category general manager at Robinson Fresh, which offers bulk organic hass avocados under its proprietary Tomorrow’s Organics brand.
Robert Schueller, spokesman for Los Angeles-based World Variety Produce, which markets under the Melissa’s brand, said the price premium for organic avocados has been about 20% over conventional, although that can vary.
“Retailers have to think about who their prospective consumer is. Is that consumer seeking organics,” Schueller said.
The price premium is the reason the organics category isn’t for everybody, Schueller said.
Barrett Johnson, salesman with Fullerton, Calif.-based grower-shipper Interfresh Inc., said if a box of conventional size-48 avocados were fetching $40-48, an organic box might sell for $54-56.
“The organic deal is very good. It’s gotten very expensive,” Johnson said.
There are signs of further growth , Schueller said.
“In the produce department, it represents between 5% and 10%, and growing,” he said.
Schueller also noted that organic avocado sales have seen nearly double-digit annual growth.
“Sporting events seem to be what’s capturing weekend sales on organic avocados,” he said.
Mark Sandell, category director with San Francisco-based Purity Organic Produce and Pacific Organic Produce, noted the strength of the category.
“It’s moving well,” he said of sales activity at the end of July.
Organic sales used to be confined to major markets on the West Coast and, to some degree, on the East Coast, but that’s not the case anymore, Sandell said.
“It’s pretty much across (the U.S.) now,” he said.
The presence of Peruvian fruit in the summertime market has fed an increasing national appetite for organics, Sandell said.
“It’s a pretty good opportunity,” he said.
Supplies of organic avocados sometimes tighten, which can be a problem, some marketers say.
“A stronger supply base will be needed to meet the incremental increases in demand,” said David Fausset, salesman/category manager with Oxnard, Calif.-based Mission Produce Inc.
And, demand is growing, said Rob Wedin, vice president of sales and marketing with Santa Paula, Calif.-based Calavo Growers Inc.
“Demand for organics is clearly outstripping supplies,” he said, noting that volumes are lower in organic production.
Lower supplies lead to higher prices, but the demand continues unabated, Wedin said.
“Many retail customers and some restaurant customers have to have organics — especially retail,” he said.
Mexico continues to supply more organic fruit, Wedin said.
“The returns have encouraged Mexico to increase their organic supplies,” he said.