World avocado market

World avocado market

Eric Imbert CIRAD

This article belongs to the book “Cultivo, poscosecha y procesado del aguacate�

(Spanish version)

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2020

Marketing

World avocado market

Éric Imbert eric.imbert@cirad.fr Centre de coopération Internationale en Recherche Agronomique pour le Développement (CIRAD)

Index 1. World market –not top in terms of volume, but high added value ............... 2 1.1. A rapidly growing market ......................................................................... 4 1.2. A “testbed market” for good marketing practices ................................... 5 1.3. A bipolar world market ............................................................................. 6 2. World production and global big suppliers................................................. 11 2.1. The avocado, a minor fruit mainly produced in Latin America............... 11 2.2. Export varieties production approximately 3 million tons ..................... 12 2.3. World’s main export avocado production zones .................................... 13 3. Major challenges........................................................................................ 21 3.1. Rapid progress across the board in world production............................ 21 3.2. A paradigm shift and need for visibility .................................................. 22 3.3. Continuing to stimulate demand on the historic markets ...................... 23 3.4. Asia and the domestic markets the major markets of tomorrow .......... 23

Esta obra está bajo una licencia de Creative Commons Reconocimiento-NoComercial-SinObraDerivada 4.0 Internacional (CC BY-NC-ND 4.0)

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World avocado market

1. World market –not top in terms of volume, but high added value The avocado is not among the top fruits in the world fruit trade by volume. Worldwide trade in 2018-2019 was evaluated at approximately 2.2 million tons, excluding local production aimed at the domestic markets of the producer countries. The avocado occupies a modest 9th position in the fruit exports rankings by volume, far behind the top three, which are the banana (nearly 21 million tons), the apple (approximately 9 million tons) and the orange (approximately 6 million tons). They apparently represent nearly 3 % of the world fruit trade, evaluated at just over 70 million tons in 2018-2019 (Table 1).

Table 1. World fresh fruit trade by volume (million tons)

Global fresh fruit trade

71 millions tons

2018 - COMTRADE - CIRAD- million tons Ranking Product Volumes 1 Bananas 20,6 2 Apples 9,0 3 oranges 6,3 4 Grapes 4,3 5 Soft citrus 4,1 6 Pineapple 3,1 7 Pears 2,6 8 Peaches / nectarines 2,4 9 Avocado 2,2 10 Lemon 2,0 11 Mango 2,0 12 Kiwifruit 1,6 13 Plantains 1,4 14 Strawberries 1,1 Others below 1 m. t 8,5 Total 71,1

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share/total 29,0% 12,7% 8,9% 6,0% 5,8% 4,3% 3,7% 3,4% 3,1% 2,8% 2,8% 2,2% 1,9% 1,5% 11,9%

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The avocado’s position is radically different if we change the focus of analysis and look at trade in terms of value. With an estimated import turnover of 5.1 billion USD, it is hot on the heels of the leaders, in fourth position in the rankings just behind the banana (approximately 14 billion USD), the grape (approximately 9 billion) and the apple (approximately 8 billion) (Table 2). By way of comparison, this amount corresponds to the GDP of a country such as Mauretania or Togo. So, there are major revenue redistribution effects associated with its trade, especially since a significant proportion of exporter countries are ranked as “intermediate revenue” (GNI/capita from 1 036 to 12 615 USD/year), and production is often in the hands of “small or medium” growers.

Table 2. World fresh fruit trade by value (billions of US$)

Global fresh fruit trade

80 billions US$

2018 - COMTRADE - CIRAD- billion US$ Ranking Product Turnover share/total 1 Bananas 13,9 17,4% 2 Grapes 8,9 11,1% 3 Apples 7,9 9,9% 4 Avocados 5,1 6,4% 5 Oranges 4,8 6,0% 6 Tangerines, mandarins, clementines, satsumas 3,9 4,8% 7 Cherries 3,4 4,3% 8 Strawberries 3,0 3,7% 9 Fruit, fresh nes 2,9 3,6% 10 Blueberries 2,9 3,6% 11 Mangoes, mangosteens, guavas 2,7 3,4% 12 Peaches and nectarines 2,7 3,4% 13 Kiwi fruit 2,6 3,2% 14 Lemons and limes 2,5 3,2% Others below 1 m. t 12,9 16,1% Total 80,0

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World avocado market

1.1. A rapidly growing market The avocado market stands out for its exceptional dynamic. The growth in world trade, relatively modest until the end of the 2000s, literally exploded from the start of the following decade. Its tempo tripled, going from approximately 60 000 t/year to more than 180 000 t/year on average during the period from 2011-2012 to 2018-2019, the last figure currently available (Figure 1). An exceptional performance in a world fruit market where slack growth, or even flatlining, is more often the rule. To give you a proper idea, the world avocado market grew five times faster than the world fruit trade average over the period 2011-2012 to 20182019 (12 % per year, as opposed to 2.5 % per year). Only products such as the blueberry and other berries (raspberry) had comparable performances, though with much smaller markets in terms of volume.

Figure 1. Graph of evolution of world fresh fruit trade by volume

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1.2. A “testbed market” for good marketing practices This dynamic should be attributed to the operators working on this market, who have been able to generate this growth via two levers. On the one hand, a very powerful product promotion system has been set up in the USA. Faced with the gradual opening up of their borders to Mexican imports, Californian growers decided to co-develop their market with their competitors, instead of opposing them. Hence a mandatory parafiscal tax system levied on every box of Hass avocado on the US market, whatever its origin, was set up in 2003, under the control of the USDA. The funds collected (2.5 USD cents/pound) are managed by the Hass Avocado Board to set up research projects (specially to demonstrate the fruit’s health assets) and the product promotion actions, whether generic or specific to the various supplier countries. The large sums collected (more than 80 million USD in 2019) provide professionals with promotion budgets unrivalled in the field of fruit, to undertake massive actions. This system is hesitantly taking root on the other side of the Atlantic, with the formation of the World Avocado Organization in 2017, whose aim is to promote the avocado in Europe and China. However, since contributions are voluntary rather than compulsory, the budgets available are in no way comparable, although the scale of these markets is bigger.

The second lever used by professionals to stimulate consumption has been to revise the range. On the one hand, the supply has across the board focused on the Hass variety, more robust due to its woody epidermis and therefore better suited to mass trade. By way of example, this variety’s market share went from approximately 50 % at the start of the new millennium in the EU, to nearly 85 % in 2019. On the other hand, a major product innovation has been introduced: ripening of this climacteric fruit to varying degrees in special chambers. This process was developed in the USA by the San Diego-based company Henry in the

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1980s. It made this product more reliable for the consumer, optimizing the taste experience and increasing impulse buys. By way of illustration, the typical assortment in the French supermarket sector has gone from a single reference at the end of the 1990s (green variety or Hass avocado, loose, with haphazard maturity), to four references today, more varied and higher quality (pre-ripened loose Hass, ready-to-eat Hass in a 2-piece tray, pre-ripened very small Hass in a 4 or-5 piece tray, and an entry-level reference of small green or Hass variety avocados, unripened and in net bags).

1.3. A bipolar world market Despite its formidable expansion, the avocado market is to this day based on just two mainstays: the USA and the European Union. These consumption mega-centers alone take in just over 80 % of international trade. The markets behind them in the rankings are a long way back in terms of volumes. According to the 2019 Customs figures, Canadian imports are around 90 000 t, Japanese imports around 65 000 to 75 000 t and Chinese imports around 50 000 t (Figure 2). Eastern Europe outside of the EU-28, the Arabian Gulf countries, South America and Central America all import approximately 40 000 t.

Figure 2. Main avocado import markets

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USA: the number one, still rapidly growing The USA is by far the world’s number one market. Its imports approached 1.1 million tons in 2018-2019, a figure representing approximately 50 % of world trade. Despite these impressive volumes, this market is still rapidly growing (more than 12 % per year on average for the past decade), thanks in particular to the colossal promotion efforts mentioned above. On top of these figures, it also has large-scale local production, from California (highly variable harvest, fluctuating between 100 000 and 170 000 t in recent seasons). Average consumption, which reached approximately 3.5 kg per capita in 2019, varies greatly between regions (Figure 3). It is at its highest in the West (more than 7 kg in California, an approximately 4.3 kg in the rest of this zone), but is much lower in the East and even more so in the center of the country (2.5 to 3.0 kg in the East, and barely more than 2 kg in the Great Lakes or Plains regions). The regions where numbers of inhabitants of Hispanic origin are biggest are also the highest consuming, with the avocado rooted in the diet of this section of the population.

Figure 3. Avocado consumption in the USA. Evolution in 2019 compared to 2018

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The supply is based on a limited number of supplier countries. On the one hand, drastic sanitary protection measures govern access to the market, with only origins holding APHIS accreditation (Animal and Plant Health Administration Service) being authorized to enter. On the other hand, MichoacĂĄn, the Mexican State which dominates world production, is a natural local supplier, with a colossal export capacity. So, it reigns supreme over this market, especially since most companies distributing the avocado in the USA are based in this State. The supply is topped up

by Chile and Peru.

Figure 4. Avocado imports in the USA (total and by origin)

European Union: a rapidly growing neo-market The world’s second market, the EU-28 is distinctly more modest in size, with imports of approximately 750 000 t in 2019. Nonetheless, its growth is even more rapid than on the US market: + 18 % per year on average between 2015-2016 and 2018-2019! Just as in the USA, there is significant local production (approximately 100 000 t in Spain, and some much more limited volumes, especially in Portugal and Crete). Consumption also

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varies greatly between geographic zones. The Scandinavians are top of the charts in Europe in terms of consumption per capita (2.2 to 2.6 kg).

France, which is in second position with approximately 2.2 kg per capita, is the historic and number one market in terms of volumes consumed (approximately 145 000 t). It is followed by the United Kingdom (1.6 kg), which is also the number two market by volume. Germany, which has only recently discovered the product, has become a major market within a few years. The consumption level per capita nonetheless remains limited (approximately 1 kg). Highly populous countries, such as Italy, and the eastern EC, which has nearly 100 million inhabitants, are still extremely under-developed markets (Figure 5).

Figure 5. Avocado consumption and growth of the main EU-28 markets

The market supply is based on a wide range of supplier countries. Chile, Mexico and the Mediterranean (Spain, Israel and Morocco) dominate the winter season, which runs roughly from September to April. Peru,

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Southern Africa and Kenya are the leading suppliers during the counterseason, which extends from April/May to September (Figure 6).

Figure 6. Avocado imports (total and by origin) in the EU-28 market during the winter (top graph) and summer seasons (bottom graph)

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2. World production and global big suppliers 2.1. The avocado, a minor fruit mainly produced in Latin America It is difficult to know the exact world avocado production level, as the statistical data of certain major countries are very rough. According to our estimate, made by cross-referencing the various existing reliable sources, it is approximately 6 million tons. The avocado is down in 22nd position in the rankings of the main fruit products, far behind the leaders (the banana with 116 million tons, the watermelon with 104 million tons and the apple with 86 million tons). So, the avocado represents less than 1 % of a world fruit harvest estimated at more than 860 million tons. The world avocado industry’s center of gravity is situated near the zone of origin of the three races that make up the species, i.e. Latin America, which is still home to three-quarters of production. Africa comes a long way back with 11 %, followed by Asia (9 %) and the Mediterranean (4 %) (Figure 7).

Figure 7. Avocado production by geographical area

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2.2. Export varieties production approximately 3 million tons Production of varieties of interest to the international trade, now represented above all by the Guatemalan race cultivar Hass, and topped up by some additional volumes of hybrids, primarily Guatemalan x Mexican race (Fuerte, Ettinger, Pinkerton, etc.), represents approximately 3 million tons, i.e. 50 % of the total. Some big avocado producer countries, cultivating varieties not wanted by the international trade due to their large size or fragility of the fruit (especially the West Indian races), are completely or nearly completely absent from the list of international trade suppliers. This is the case with the big Asian producers (Indonesia with a harvest of 400 000 t, China with a harvest of 130 000 t), some African countries (Rwanda with more than 160 000 t, Cameroon with more than 70 000 t, etc.), and to a lesser degree, certain Latin American countries with a small presence on the international scene despite enormous production (the Dominican Republic, the world number two producer with more than 640 000 t, Brazil with more than 200 000 t) (Tables 3 and 4).

Table 3. Leading avocado (export varieties) producing countries - 2017/2018 and 2018/2019 campaigns Avocado production- Export varieties - 10 leading world producers Average 17/18 and 18/19 - FAO Profesional sources * estimate (exported volumes) Ranking 1000 t 1 Mexico 1990 2 Peru* 304 3 Chile 218 4 SAR 144 5 IsraĂŤl 117 6 California 112 7 Spain 92 8 Australia 82 9 Kenya* 64 10 Colombia* 35

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Table 4. Leading avocado (all varieties) producing countries - 2017/2018 and 2018/2019 campaigns Avocado production - All varieties - 10 leading world producers Average 17/18 and 18/19 - FAO Profesional sources Ranking 1000 t 1 Mexico 1990 2 Dom.Rep 641 3 Peru 486 4 Indonesia 387 5 Colombia 321 6 Other HS 238 7 Brazil 224 8 Chile 218 9 Kenya 214 10 Rwanda 162

2.3. World’s main export avocado production zones Latin America Latin America reigns practically supreme over these export volumes, controlling nearly 85 % of production. On its own, the world number one, Mexico, provides two thirds of the world harvest of these varieties. It is followed by Peru, a new supplier which has made explosive progress over the past decade, Chile and a newcomer making strong progress, Colombia. The supply is topped up by Brazil and the Dominican Republic, while small-scale production is starting to emerge in particular in Guatemala and Ecuador.

Mexico: an undisputed number one, on solid foundations Mexico had plenty of assets to be a leading light on the world avocado market. Starting with the roots, since the country is the cradle of one of the three races from which all the varieties cultivated today originate.

Furthermore, it is from a Mexican vernacular language, Nahuatl, that the

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avocado takes its name. It also enjoys cultivation assets, with in particular especially suitable pedoclimatic conditions in the central part of the country: rich and well-draining volcanic soils, temperatures aiding excellent photosynthetic functions and avoiding frost risks, and good availability of high-quality water. With such a potential and such a long pedigree, it is no surprise that the country plays such a predominant role in the world avocado industry, controlling nearly a third of production (with approximately 1.6 million tons), and two-thirds of exports (very close to the 1-million tons mark in 2015-2016). While Mexico is important for the avocado, the avocado is also important for Mexico, with the sector now a heavyweight of its economy. The country’s 18 000 growers and forty or so packing stations generate nearly 100 000 direct jobs and an export turnover which should be more than 3 billion USD in 2019. The Mexican cultivation area is by far the world’s biggest. Evaluated at more than 235 000 ha in 2019 according to official statistics, it represents between 55 and 60 % of the world’s Hass planted area. Its expansion dynamic is as exceptional as its extension: 12 000 ha per year on average between 2010 and 2017. It is concentrated mainly on the volcanic belt running across the center of the country, from the Gulf of Mexico to the Pacific Ocean. Michoacán, the only State authorized to export to the USA, is by far the country’s leading production area, with nearly three-quarters of total surface areas. It is also the region where the expansion of the cultivation area is greatest. Jalisco, the province adjoining Michoacán, where the production system is very different, comes in second position (26 500 ha in 2019, according to professional sources), with just over 10 % of total surface areas. This State has been the other growth engine of the Mexican avocado industry since the mid-2000s. The States following it in the rankings are the State of Mexico (approximately 10 000 ha), Nayarit (7 600 ha), Morelos (5 800 ha) and Guerrero (4 600 ha). There is significant expansion in some of these States.

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Peru: a new producer making giant strides forward Within less than a decade, Peru has become the world number two Hass avocado exporter, with volumes bound for the international market exceeding 350 000 tons in 2019. This success story is based on a hypercompetitive production model, in large part thanks to the highly particular pedoclimatic conditions prevailing on the Peruvian coast and the irrigation infrastructures set up since the mid-1990s. The cultivation area, which covered in total more than 38 000 ha at the end of 2019, should continue to expand, though at a more moderate tempo in the coming years. It is concentrated mainly in the 2 000 km coastal strip running from Chiclayo in the north to Arequipa in the south. There are four distinct major zones, with different production systems. From north to south, we have the Olmos irrigated area (Department of Lambayeque), the Chavimochic irrigated area (Department of La Libertad), the low valleys of the Departments of Lima, Huaral, CaĂąete, Chincha and Ancash, and the Sierra (the western foothills of the Cordillera, mainly in the south of the Departments of Huancavelica, Arequipa, Cuzco, Ayacucho and Ica).

Chile: a cutting-edge industry facing new challenges The Chilean avocado industry, which was the first to blaze the trail to the US market, is the world number three, with export volumes of around 150 000 t per season. It fundamentally relies on its high adaptability. First of all, it has been able to make the most of the restrictive pedoclimatic conditions (climate, water availability, soil), thanks to top-flight technical know-how, setting a precedent in Latin America. It then managed to reinvent itself in commercial terms when the US market, on which it had been built, closed up. Since the last decade, it has faced major new challenges, with the appearance of a recurrent structural drought, which has really tested its structure, and strong competition gradually coming to prominence, both in its new European core market and in the USA. Its

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adaptability and the renowned post-harvest quality of its production are precious assets, more than ever. Its cultivation area, estimated at approximately 26 000 ha in 2020, is concentrated in the central part of the country, over approximately 500 km between VicuĂąa in the north (mid-north of Region IV) and Peumo (north of Region VI). These zones have a Mediterranean climate, thereby limiting the frost risks, and are endowed with surface or underground water resources (river valleys descending from east to west from the Cordillera). The Aconcagua Valley is the main production center (approximately 40 % of surface areas), with plantations situated both in the mid-valley zone (Quillota, La Cruz, Ocoa) and further upstream (San Felipe, Los Andes, Putaendo). The Maipo/Mapocho valleys are in second position (approximately 25 % of surface areas). Region IV comes in 3rd position, with approximately 15 % of surface areas (River Elqui, LimarĂ­ and Choapa valleys). The La Ligua/Petorca region, previously a big player, has seen a dramatic decline for lack of sufficient irrigation water (absence of retention infrastructures, low river flow speed, with the source too low to receive snow meltwater). Region VI reportedly makes up just under 10 % of surface areas.

Colombia: the emergence of a new giant Colombia, still practically an unknown on the international market 2015, is in the process of joining the leaders. Exports should pass the 50 000-t mark in 2019-2020, a figure still a long way from expressing the real potential of its cultivation area, which has exploded in recent years.

Surface areas in cultivation reportedly reached 18 000 ha in 2019, bearing in mind that more than 10 000 ha of land has been purchased by local or international groups to plant Hass in each of the coming years. The pedoclimatic conditions are well-suited to cultivating this variety on the strip between 1 600 and 2 400 m in the Andes Cordillera. Water is fairly abundant, and the restoration of political peace has finally created a

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favorable climate for investment, and has freed up a lot of previously unfarmed land because of the presence of the Guerrillas. Furthermore, the country enjoys a favored geographic position, from which it can very easily serve the USA, and, under good conditions, Europe.

Brazil: scaling up, particularly in Minas Gerais Better known until recent years for its production of West Indian race avocados, Brazil is starting to position itself as a significant player on the world Hass market. Its exports approached the 10 000-t mark in 2019, almost entirely aimed at the European Union market. The cultivation area comprises approximately 3 200 to 3 300 ha. It is concentrated mainly in the São Paulo region, and in the more recently developed Minas Gerais region, where there is a strong expansion dynamic.

Africa Africa is the number two export varieties production zone. Three main countries provide an export level of approximately 130 000 t, i.e. 4 % of world trade. There is emerging production in countries such as Mozambique.

South Africa: the continent’s historic leader, reawakening South Africa is the continent’s number one producer country, with its harvest comprising Hass and green varieties fluctuating between 120 000 and 180 000 t. It is also the world’s fourth biggest exporter, with rapidly rising volumes, at around 60 000 to 95 000 t in recent seasons. South Africa is a historic player on the European counter-season avocado market. In the face of the Peruvian competition’s rise on this outlet, on which they remain 95 % dependent, South African professionals are seeking to increase their competitiveness and diversify their customer portfolio (Asia, USA and also the local market). The cultivation area, of approximately 19 000 ha in 2019, has been rapidly expanding for the past

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few years. Its center of gravity is situated in the north-east of the country.

Approximately 60 % of the national harvest comes from Limpopo province (Tzaneen region, Levubu valley). Mpumalanga province comes in second position, packing in approximately 30 % of national production (Crocodile River valley). The rest of the country’s production is situated further south, mainly in the cooler region of KwaZulu-Natal, with its later production calendar, and planting has been carried out in recent years in zones even further south (Western Cape and Eastern Cape).

Kenya: upscaling and structural change Kenya is the only origin exporting large volumes (55 000 to 75 000 t per year), whose production base is still in large part based on small subsistence growers. The industry was able to react to the developing European demand by increasing its certification level and refocusing its supply on Hass, while diversifying its outlets, especially to the Arabian Peninsula. The cultivation area was estimated at 7 500 ha in 2020, mainly concentrated on the plateau of the country’s south-west quarter (Midlands and Highlands), where agricultural potential is high. Recent years have brought particularly big increases in surface areas, triggering a profound transformation of the production base, with the appearance of a large number of high-tech medium-sized orchards.

Tanzania: an origin for the future The young Tanzanian industry, built on an original model comprising both some medium-sized plantations and a large number of small subsistence growers, is developing, and plays a major socio-economic role in the Kilimanjaro and Mount Rungwe regions, and more recently in Iringa.

Exports, aimed practically exclusively at the European market, are around 8 000 t. Surface areas of commercial plantations, estimated at approximately 1 400 ha in 2020, are seeing considerable expansion.

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Mediterranean The Mediterranean is practically level pegging with Africa, with exports of approximately 125 000 t. Israel and Spain are the historic leaders, though Morocco is now a player of note. Portugal and Crete also have increasing production, though the level is still limited.

Spain: Hass cultivation extending outside AxarquĂ­a The Spanish avocado industry, set up in the early 1970s, ships approximately 50 000 to 60 000 t per year, and produces approximately 100 000 t. Spain is the only country in Europe and the European Union to produce significant volumes, thanks to the particular climate conditions of the Andalusian coast, where the majority of the 13 500 ha present in the Peninsula is situated. This origin is one of the major players on the EC market, where it focuses its shipments, given the comparative advantages it holds in terms of customs and logistics. Development of the sector, limited in the traditional zone of MĂĄlaga/Granada due to lack of water and land reserves, is more significant in new production areas, though the climate constraints there are greater (Cadiz, Valencia and Huelva).

Israel: a pioneering origin, but exhibiting rapid growth A pioneering origin, Israel is in the top twelve producer countries, with its average harvest of 100 000 t still on the increase, and still largely comprising green varieties. With its focus on export, this country plays a significant part in the EC market supply during the winter campaign, where it has made a big contribution to introducing the product. Annual exports are around 50 000 to 70 000 t. The cultivation area is still seeing considerable expansion, particularly for Hass. The majority of Israel’s 10 000-hectare cultivation area is situated on a coastal strip approximately 25 km wide, extending from Tel Aviv to the Lebanese border. The rest of

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the cultivation area is concentrated in the north-eastern valleys (Upper Galilee, Jourdan valley) and north-west Negev, a more recently developed zone, with a hotter climate (semi-arid).

Morocco: a young and rapidly growing industry After entering the international avocado scene, a decade ago, Morocco remains a modest player, with exports of between 10 000 and 20 000 t in recent campaigns, practically exclusively aimed at the European Union.

The cultivation area, estimated at approximately 6 000 ha, is concentrated in a small coastal zone in the north of the country, with a temperate microclimate (between Kenitra to the south and Larache). It is developing at a moderate but steady rate.

Oceania New Zealand: out to conquer the Asian markets New Zealand, the only significant Hass exporter country in the Asia-Pacific zone, has within the space of a few years become one of the top ten operators on the world avocado market, based on development of the Australian market. Production, of around 30 000 to 40 000 t in recent years, is based on a cultivation area of approximately 3 800 hectares, concentrated for climate reasons in the northernmost part of the country (Bay of Plenty, Mid and Far North regions). The industry, comprising a wide production base very much structured around Avocado New Zealand, has implemented an ambitious plan to become a central player on the rapidly developing Asian markets, taking advantage of its logistical & phytosanitary assets, and a policy of excellent quality.

Australia: supplying the local market Although barely visible on the international scene, the Australian Hass avocado industry is the world number six, with production significantly

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increasing, at approximately 85 000 t in 2018-2019, which was sold practically entirely on the domestic market. The industry has set itself the objective of basing its future growth on an import-substitution policy, thanks to the very wide production calendar that this continent-country enjoys, and on developing a diversification export activity to the high added-value Asian markets (approximately 4 000 t exported in 2019).

California A pioneering and innovative origin in many fields, both technical and marketing, the Californian avocado industry to this day remains the world number four in terms of cultivation area, with approximately 20 000 ha.

Production, which mainly comprises Hass and fluctuates between 100 000 and 180 000 t, is sold primarily on the domestic US market. The Californian industry has since the early 1990s been faced with growing competitiveness problems, in a context of rampant urbanization and recurrent drought, which has considerably shrunk its area. The production system and structure have mainly remained traditional, while the costs of the main production factors have exploded to become the highest in the avocado world. Nonetheless, the shrinkage trend during the 2000s has given way to stabilization, with the production zone situated north of Los Angeles holding up better than the area to the south, where agricultural water availability is highly restricted.

3. Major challenges 3.1. Rapid progress across the board in world production The world market supply should see a very considerable increase in the coming years. On the one hand, there are new giants appearing.

Professionals from Colombia and Jalisco have been able to build industries within a few years boasting a cultivation area of close to or

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more than 20 000 ha, and set to feature prominently in the rankings of the world’s main exporters. Furthermore, the cultivation areas of traditional market supplier countries are also exhibiting strong dynamics.

Surface areas expanded by an average of 9 000 ha per year between 2013 and 2017 in Michoacán, with a net slowdown trend setting in since 2018.

Average growth was approximately 3 000 ha per year between 2017 and 2019 in Peru. The cultivation area is increasing by 500 to 1 000 ha per year in Morocco, Spain and Australia, and by 1 000 to 2 000 ha per year in South Africa, Kenya and Israel. Finally, emerging industries are developing not only in Portugal, but also Brazil, Tanzania, Ecuador, Mozambique and Guatemala.

3.2. A paradigm shift and need for visibility It is hard to put a precise figure on the exact extent of these expansions.

In a study published in late 2018, FRUITROP estimated that the world cultivation area could increase at an average rate of approximately 21 000 ha per year by 2025. Assuming an average yield of approximately 11 t/ha, the additional production for the market to absorb would be around 230 000 t per year. This rate corresponds approximately to the world’s annual growth in demand in recent years. Hence the market, hitherto structurally under-supplied, appears to be at a turning point, or at the very least getting close. So, it seems very important to conduct more indepth prospect studies relating to the evolution of world production, to prevent any potential over-supply crisis.

Figure 8. Avocado production and world market growth

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3.3. Continuing to stimulate demand on the historic markets We should emphasize that the world market at present is still reliant on two mainstays, namely the North American market (USA & Canada) and the European Union. They have absorbed 95 % of the growth in world production in recent campaigns. It is vital to continue to invest in developing demand on these crucial markets. We can be reasonably optimistic as to the evolution of the US market, especially thanks to the sales stimulation role that the enormous promotion budgets available will continue to play. Over-consuming regions will continue to exhibit a significant growth dynamic (increase of more than 400 g per capita in California between 2017 and 2019, while consumption per capita is around 7 kg). Furthermore, there are still big growth reservoirs in a large part of the country (East Coast and Centre), where the consumption level is well below the national average, and the product’s penetration rate is only 40 to 45 %. The growth trajectory seems more uncertain on the EC market. However, the potential is there. Consumption on the leading markets (Scandinavia, France, United Kingdom) is still a long way off the average level observed in the USA. Furthermore, there are still some very populous countries which are still very under-consuming, and making rapid progress (especially Germany and Italy). However, there are perceptible threshold effects (Scandinavian markets tending to level out in recent years). Unlike in the USA, the promotion budgets remain clearly insufficient to effectively support demand in Europe.

3.4. Asia and the domestic markets the major markets of tomorrow Asia represents enormous growth potential. However, the export figures show that this reservoir is only opening up very gradually, and is proving hard to tap into, both because of its distance from the world’s main production centers, and the difficulty in introducing what is often a strange product. These markets, which represent only approximately 7 %

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World avocado market

of world trade, grew by only 16 000 t per year on average between 20142015 and 2018-2019. The potential is there, and some exporters have expressed a desire to contribute to their development. However, continued investment is needed so that these markets can in the medium term play a major role in the balance of world trade. The domestic markets of producer countries are also major areas for development.

Chile has set the example: the excellent work of the “Comité de Palta” has helped build a consumption center of 65 000 to 70 000 t, taking in approximately a third of the country’s production. A similar work is in progress in South Africa and Peru, under the auspices of SAAGA and Prohass. Furthermore, the processing market, still underdeveloped at present, must not be neglected.

3.5. Promotion and prudence must remain the watchwords The world avocado market is at a turning point. Demand is there to enable trade to continue to grow at an exemplary rate, while ensuring growers, often small or medium-sized, at least decent revenue.

Nonetheless, there are two pitfalls on the horizon. The planting rate, which has considerably gathered pace in recent years, must be rational and controlled. Furthermore, the consumption promotion actions must be stepped up on the European and Asian markets. The product has major appeal potential, thanks in particular to its remarkable health assets, which are starting to become increasingly well-known thanks to the work conducted in particular by the HAB. Few fruits have such a precious resource for conducting powerful and persuasive communication campaigns. It is time to harness these assets more fully, now that the professionals have the means.

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