UC Davis: Avocado promotion programs have increased demand
A study commissioned by the Hass Avocado Board found that promotion programs have been a worthwhile investment for producers and importers of the fruit.
Researchers at the University of California, Davis, determined that the programs from 2013-2017 have been “highly effective” in expanding U.S. demand for avocados.
Richard Sexton, Charlotte Ambrozek and Tina Saitone, all members of the department of agricultural and resource economics at UC Davis, authored the report.
“We found a positive and statistically significant elasticity of retail sales with respect to promotion expenditures in both a panel econometric model focused on local market areas and weekly data and a model of aggregate retail sales in the U.S. estimated with monthly data,” the researchers wrote.
Sexton, Ambrozek and Saitone found the benefit-cost ratio for the industry ranged from 1.6 to 3.6.
“With total HAB and member association promotion expenditures over the five-year review period totaling $293.3 million, our results suggest that, ceteris paribus, industry profits increased in a range from $469.3 million to $1,055.9 million,” the researchers wrote.
Sexton, Ambrozek and Saitone noted in the report that their conclusion should not come as a surprise to anyone familiar with the industry.
“The hass avocado success story in the U.S. in terms of the rapid increase achieved in per capita consumption, while maintaining stable or increasing real prices to producers and importers, has made avocados the envy of the produce industry, as others try, most without notable results, to emulate avocados’ successes,” the researchers wrote. “Our analysis and its predecessors demonstrate that the activities of the Hass Avocado Board and its member associations have played a fundamental role in this success.”