Organic Mexican avocados play an important role
Organic avocados continue to play an important role in the business plans of the major U.S. avocado importers.
“We have a very large percentage of organic avocados out of Mexico,” said Gary Caloroso, business development director for The Giumarra Cos., Los Angeles.
“More customers are asking for organic,” he said.
The organic category also is significant at McDaniel Fruit Co., Fallbrook, Calif., said Rankin McDaniel, owner and president.
“Demand for organic through McDaniel’s distribution network in the U.S. continues to see a nice growth curve,” he said.
Organic fruit accounts for 5% to 10% of the avocados at Calavo Growers Inc., Santa Paula, Calif., said Rob Wedin, vice president of sales and marketing.
Organic volume increases slightly every year, he said.
“The importers have identified that there is really good organic demand for vegetables and fruits in the U.S.,” he said.
Phil Henry, president of Henry Avocado Corp., Escondido, Calif., estimated that organic avocados account for 7% to 10% of the company’s Mexican fruit.
“Organic demand has been getting stronger,” he said.
The company sells organic product to mainstream supermarkets that also sell conventional fruit, but the firm also sells to specialty stores that focus on organic and natural foods.
Jared Bray, who handles sales and business development for Murrieta, Calif.-based West Pak Avocado Inc., seemed very pleased with the firm’s organic avocado program.
“Organics are incredibly exciting right now,” he said. “The organic market is strong, and there is a lot of organic fruit available.”
Organic sales continue to grow year over year, he added.
“I can’t recall a year when we haven’t seen double-digit growth in the organic category.”
Most of Calavo’s organic avocados also go to supermarkets, Wedin said.
“Foodservice likes them, but they seem less likely to pay the premium,” he said.
There are a handful of restaurants that want organic avocados, he said, but they are mostly “new wave” eateries.
Grower-shippers agree that producing organic avocados costs more than producing conventional fruit, but opinions vary about the difference in price.
“The gap between conventional and organic sold at retail actually has closed a little bit,” Caloroso said. McDaniel agreed.
“The gap between the costs of the two has become less,” he said. But he added that there are times during the year when demand for organic outpaces the supply, and “the spread between conventional and organic fruit can become pretty big.”
Wedin said that, although there was a time when the gap was quite narrow, it has increased in the past three to four years.
There is a “significantly larger premium” today than there was eight to 10 years ago, he said.
But he said that premium is not consistent.
“Sometimes it’s quite wide, and sometimes it’s quite narrow,” he said.
Whether organic avocados are more profitable for retailers “depends on their model,” Caloroso said.
“If they have consumers who are more prone to buy organic product, it can be (more profitable),” he said.
But for retailers who have more value-oriented consumers, organic isn’t as important.
Importers see continued growth in the organic avocado category.
“There is no indication that demand is going to change,” Henry said.
Wedin said he believes that “the primary driver is the higher returns” to growers.
“As long as these premiums exist, you will find more growers wanting to grow organically,” he said.
Demand for organic avocados and organic produce in general will continue to grow, McDaniel said, though he was not sure at what rate that growth will be.
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