With a significant expansion in supplies from Mexico during the 2015-16 season, Bloomington, CA-based Index Fresh Inc. also grew its sales and procurement staffs, added a compliance officer and started to dip its toes into the fair trade movement.
Vice President of Sourcing Giovanni Cavaletto said the firm’s Mexican avocado volume increased by 30 percent last year and now represents 70 percent of the company’s total avocado shipments. This year, it is anticipating a 15 percent increase in Mexican supplies.
For the past 20 years, Index’s business model has involved partnering with Mexican packers to produce the packs and specifications that the company needs. “We work with packers in both Michoacán and Jalisco,” said Cavaletto. “Both states have fit into our strategy.”
Currently only Michoacán groves and packers are allowed to ship fruit into the United States, though some Jalisco packers are poised to follow suit as soon as U.S. and Mexican officials agree on the protocol. In the meantime, and for several years now, Index has sold and shipped the Jalisco fruit to its customers in Asia and Canada.
Cavaletto said the increased supplies from Mexico are the result of the work by its procurement team, which continues to expand in an effort to find new sources for the company’s customers. And as volume increases so does the need for new customers which has led to the addition of several new sales people.
That same increase in volume caused Index to locate a compliance officer in Mexico to make sure all of the certifications are done in a timely manner. Of course, there are the basic certifications that allow the fruit to be shipped into the United States. There is also the food-safety compliance standards that need to be met and certified as well as the organic and fair trade certifications.
Cavaletto said the fair trade certification is the newest wrinkle and was added because of requests from several U.S. customers. The certification covers several areas including social responsibility, fair wages and community involvement. The product costs more to produce and Cavaletto said it does command a premium…even when the market is sky high like it was in October.
“You’d be surprised,” he said. “It’s just like organics. A lot of people have said it is difficult to get a premium for organics on an item that has a high cost anyway, but organics have held their own.”
Speaking to The Produce News several days after the work stoppage had ended in Mexico, Cavaletto said trucks were being loaded and sent to the United States at a clip approaching 1,000 loads per week, which would equal 40 million pounds. “At this rate, it will take about 12-15 days to fill the pipeline,” he said, adding that Mexico has budgeted for about two billion pounds to the United States this year, and they are going to do everything they can to meet that budget.