Retailers around the U.S. raised prices, stopped promoting and sourced fruit from other countries when an avocado growers strike in Mexico last November caused supplies to tighten severely. As prices jumped, retailers found that many shoppers continued to buy, but the disruption caused some buyers to consider their options for sourcing long-term.
“The strike was painful in the moment, but avocados are such a high-penetration item in households,” said Michael Schutt, produce merchant for West Sacramento, Calif.-based Raley’s. “There is always a demand, so as long as there is a supply, we find that the business is less elastic. Customer behavior shows that they will likely modify their purchase by quantity or frequency before leaving the category altogether.
“When you look at the supply ‘pie’ with regard to avocados, Mexico is still the single biggest producer,” Schutt said. “However, all of the turbulence the last couple of seasons has caused me to delve deeper into what the long-term outlook is for other avocado-producing countries, such as Colombia.”
Vic Savanello, regional vice president of produce and floral for Grand Rapids, Mich.-based SpartanNash, described a similar takeaway from last year’s disruption.
“The strike didn’t have any long-term effects in the category, but it did make many in the retail community take a step back and look at alternative sourcing,” Savanello said.
Kevin Byers, produce merchandiser for Seattle-based PCC Community Markets, said the strike not only created higher prices but also resulted in the market being flooded afterward with overripe fruit.
“It took the industry some time to get back on schedule,” Byers said. “Keeping everything moving is important. When it halted, it caused a lot of grief throughout the supply chain. When it comes to prices I don’t think they will ever get back to down to what they once were.
“We are not changing our sourcing too much, but I think other growing regions have been able to capitalize and grow their share in the U.S. market,” Byers said.
Price Mabry, produce sales manager for the Gulf Coast division of Association Wholesale Grocers, said his company made some changes as a result of the strike.
“In our facility alone we are down 5,000 cases year to date,” Mabry said. “What we found was that we were not aligned with the right partner. When product got tight we had (purchase orders) not being filled. I think you have to partner with suppliers that will source product out of Peru if needed.
“What we have done since is partnered with a new supplier who has a reputation of proving fruit 52 weeks a year,” Mabry said. “We are using the flush in the market.”
Jeff Cady, director of produce and floral for Williamsville, N.Y.-based Tops Friendly Markets, said the company hasn’t changed how it sources.
“We are getting better at dealing with it as unfortunately it's becoming more commonplace,” Cady said. “The only thing it stops us from doing is promoting. Customers who want avocados will buy avocados regardless of retail.”
Scott Bennett, produce sales and merchandising manager for Itasca, Ill.-based Jewel-Osco, said that although the strike did affect unit movement, the company prefers to source from Mexico.
“We try not to veer away from Mexico on avocados,” Bennett said. “We feel that’s the right avocado for our customers. When it became really tight, really really tight, I think we went to one other source, and as soon as we could we got back out of that source and went back to Mexico.
“There’s good avocados out there from other regions, other countries, but our customers are used to that avocado, and we try to be consistent on quality, flavor, texture, all that kind of stuff,” Bennett said.