As with the avocado industry as a whole, Calavo Growers Inc. in Santa Paula, CA, expects a significant growth in volume over the next 12 months vs. the prior year, with increased availability of product from Mexico, California and other sources.
“The big thing for us is we are continuing to add more and more customers to our ripe program,” Rob Wedin, vice president of fresh sales for Calavo, said in an interview with The Produce News. “There is nothing that increases sales velocity more than ripe avocados at retail, so that is a real positive.”
Also, “our bag business is continuing to grow,” he added. “It was just a couple of years ago we were excited that we got to a million bags one month. Now we are consistently over 1.5 million consumer bags every month. I think it is more than 10 percent of our business.”
The ripening program and the consumer bag program are “pretty important for us,” Mr. Wedin said. “They are our primary sales vehicles.”
The company is now “adding value to more than 45 percent of the boxes that we sell” through one or the other of those programs, he said. So nearly half of the avocados that Calavo ships “are either being ripened or bagged, and both of those tools are volume drivers” with the ripening “being number one for sure.”
Customers who go on a ripe program enjoy sales increases, Mr. Wedin explained. “We just had one of our retailers report to us that when they changed to the ripe program, their volume increased four-fold and their shrink reduced significantly. That is in the Northeast, where demand is growing faster than any other place in the country. But those are pretty shocking numbers.”
Category statistics show that multiple purchases of avocados by consumers in the supermarket “are way up,” he continued. “A lot of those are purchases that are made in bags. Instead of picking up two avocados, people are picking up [one bag containing] four avocados or five avocados.”
In order to build sales at retail, “obviously you would like retailers to have as many displays and as big a display space as possible,” Mr. Wedin said. But of course, “everybody wants more space,” so retailers need a reason to increase the space allotted to a particular commodity.
“You’ve got to give them some vehicles to drive the sales they need for that space they are allocating,” Mr. Wedin said. Fortunately, “we’ve got some vehicles” that will do that. In addition, “we’ve got a popular product.”
In 2011, the total aggregate volume of avocados available in the United States over the course of the year “went down for the first time in 10 years,” Mr. Wedin noted. But looking ahead, “when we couple a good Mexican crop with a much-improved Chilean crop and especially a much-improved California crop, we are going to see a growth year for avocados in 2012.”
In fact, that growth “has already started” with the beginning of the new 2011-12 Mexican crop. “Definitely by November 1, I think, this next 12 months will begin exceeding the last 12 months pretty significantly.”
Mexico “is definitely beginning to hit its stride,” he continued. “They are not at their maximum, but they are really starting to step up their numbers pretty good.”
With Mexico “continuing to increase its volume,” Calavo’s current focus is on Mexico, Mr. Wedin said. “I think we are going to see a fairly steady increase of volume all the way to Christmas or New Year’s,” then see a little slowing around the holidays, then “build again toward the end of January,” joined by fruit from a good California crop “going into March.”
Mexico’s quality on early fruit has been “much better this year, partly because we have been more strict with the maturity process,” he said. “Now we are going to start coming into higher volumes” and getting into the point in the season where “we get that flavor that avocados are so popular for.”
Calavo’s Mexican avocados arrive in the United States within less than 36 hours of when it is packed, he said. Once in the United States, it is distributed from one of three Calavo facilities.
“We are shipping avocados heavily out of our California, Texas and New Jersey facilities” in roughly equal quantities. “That is where our ripening rooms are, and that is where the baggers are.”