Mexican avocado foodservice sales on the rise again

Foodservice sales that plummeted during the pandemic are edging upward once again, but avocado importers say labor shortages are preventing the business from reaching pre-COVID-19 levels.

Foodservice sales dropped 20% to 50% during the pandemic for West Pak Avocado Inc., Murrieta, Calif., depending on chain or distributor, said Doug Meyer, senior vice president of sales and marketing.

Most restaurants have reopened for indoor dining, and many expanded their hours, but chain-specific labor shortages still are impacting a number of establishments. “Some are thriving while others are struggling,” Meyer said. Overall, foodservice business seems to be on the rise.

“Online app-based ordering for home delivery and curbside pickup and drive-through formats are driving the growth in sales,” Meyer said.

When the pandemic started, the industry saw a significant drop in foodservice business, with the exception of certain fast-casual chains, whose business models are sustained by takeout services, said Bryan Garibay, foodservice sales manager for Oxnard, Calif.-based Mission Produce. “Although it isn’t 100% back to normal quite yet, business has still increased this year as more openings and vaccinations occur,” he said.

While foodservice sales industrywide remain below pre-pandemic levels, Gary Caloroso, regional business development director for Los Angeles-based The Giumarra Cos., expects avocado foodservice sales to increase as more restaurants reopen.

Some restaurants that pared down their menus during the pandemic, cutting back on avocado options, are starting to expand their offerings once again and are restoring avocados to their rightful place, said Donny Lucy, vice president of procurement and East Coast sales for Del Rey Avocado Co. Inc., Fallbrook, Calif.
“We’re getting there,” he said. “It’s just taking time.”

Avocado foodservice sales “fell off a cliff” during the pandemic, said Phil Henry, president of Henry Avocado Corp., Escondido, Calif. He estimated that his foodservice business now is at 80% of what it was before COVID-19 hit.

Some restaurants have not been able to restore their menus to pre-COVID-19 levels because there is not adequate labor available to prepare all the previous menu options, he said.

Foodservice business dropped by two-thirds or more for at least six months during the pandemic for Calavo Growers Inc., Santa Paula, Calif., said Rob Wedin, executive vice president of fresh sales.

But business slowly is making a comeback, especially for “the more professionally managed segment of the foodservice business,” he said. 

The dropoff in foodservice sales caused an “unbalanced inventory” situation because it left nowhere for the company to sell its No. 2-grade avocados that typically go to foodservice, Wedin said.

Foodservice business “definitely has bounced back,” said Gahl Crane, sales director for Eco-Farm Corp., Temecula, Calif., the avocado division of The Oppenheimer Group, Vancouver, British Columbia. The extent to which the impact was felt varied by state and region, he said.

Texas and the Southeast did not see major drops in foodservice business during 2020, but the West Coast did, he said. Labor remains a stumbling block, however, as many workers have failed to return to foodservice jobs.

National chains and fast-casual restaurants seem to have weathered the pandemic the best, Crane said, many by increasing their takeout business.

Labor shortages are affecting the entire industry, said Garibay of Mission Produce.

“Restaurants are struggling to staff and train fast enough to keep up with growing consumer demand,” he said.

Avocados are used for much more than just guacamole at foodservice, suppliers say. “Avocado is sliced and diced on everything,” Garibay said.

“We’re seeing more and more creative combinations, and foodservice using them for tacos, in smoothies, in baking and dessert items, as a part of vegan dishes, in salads and dressings, and more.” 
Giumarra’s Caloroso agreed.

“We see restaurants offering avocados for a variety of menu items including for breakfast, appetizers, salads, sandwiches, entrees, dessert and beverages,” he said. 

No matter how they’re used, ripened avocados are preferred by foodservice operators. Wedin estimated that up to 70% of Calavo’s avocados are preripened to some degree, especially for foodservice customers.

The situation is similar at Mission Produce. “The majority of foodservice businesses prefer their avocados ripe and ready to go,” Garibay said.

“We are experts in the art of ripening and curate custom programs in order to provide fresh, ripe hass avocados every day.” Foodservice customers of West Pak Avocado also prefer ripened avocados, and the company offers custom ripening programs, Meyer said.