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Calavo’s ripe and bag business continues to grow as avocado volume increases

“We are definitely growing” in avocado sales, said Rob Wedin, vice president of fresh sales and marketing at Calavo Growers Inc. in Santa Paula, CA. “We are combining our focus on sales of avocados from Mexico and California avocados, and both sources have a good crop. Both sources have a larger crop than they have had for some time.”

Along with that growth, Calavo is seeing increased volume in its ripe program not only in absolute terms but also as a percentage of total volume, he said. The company is also seeing an increase in its consumer bags business as well as in increase in demand for hand-packed two-layer trays.

001CalAvosCalavoRobWedinRob WedinAggregate avocado volume in the U.S. market from all sources was down in 2011 after several years of sustained growth. But since 2011, there has been a 35 percent increase in avocado volume in the United States, Mr. Wedin noted. This year, the California crop is particularly large “especially here north of Los Angeles,” he said.

For Calavo, this year’s California harvest got started in late February. “In the old days, we used to start the middle of December, so we are taking two and a half months off of a 10-month crop,” compressing the marketing season by 25 percent, he said.

While marketing factors have much to do with the California harvest starting later than it did some years ago when there were fewer competing producing regions in the U.S. market, “fortunately” there are benefits for the later start, Mr. Wedin said. “We get that much more flavor, and we give the fruit a chance to size up, too.”

As the California season gets under way, avocados from Mexico will continue to have a freight advantage going to the East, but California will have a freight advantage in western markets, he said. “The avocado commission that we donate heavily to is focusing its advertising on the West, so we are looking to really have just a fantastic selling season to western retailers and western foodservice operators.”

Calavo, which has an avocado packing plant in Temecula, CA, as well as its main facility in Santa Paula, expected to bring the Temecula plant online soon and to keep it open “for more than six months, probably,” Mr. Wedin said. That “gives us an opportunity to ripen more fruit and actually hand pack more fruit. Hand packing is kind of making a comeback, and we have not shied away from that at all.”

Size 48 avocados are the “primary target” for hand packing, he said. Sometimes size 60 fruit is also hand packed. “Forties and larger don’t seem to need that attention quite as much,” Mr. Wedin said, “although we do have some customers that like it that way, and if they order it, we will pack it that way, and we are trying to do it as efficiently as possible.”

A large percentage of Calavo’s California avocado production is now U.S. Department of Agriculture Good Agricultural Practices certified, so that when demand for GP certification starts to increase, as is anticipated, “we feel like we are in a good position to do a good job of meeting GAP demand,” Mr. Wedin said.

Avocados are “kind of in the second tier” with regard to food-safety concerns, he said, “so customers aren’t being too demanding yet. But I believe that is coming, and we are going to be ready to meet it.”

Through most of the California season, Calavo will be handling avocados only from California and Mexico. Chile had a small 2011-12 crop that was essentially finished and Chilean fruit would not be in the market again until late summer, Mr. Wedin said. “We have not taken avocados from Peru. We feel that our focus is going to satisfy demand if we continue to focus on Mexico and California, so it is a North America-based situation. What we are trying to focus on is freshness and efficiency, and when you don’t have to load boats and you don’t have to be two or three weeks on the water, we believe everyone gets more satisfaction.”

New on sales at Calavo this season is Stephan Eckel, who has been in the industry for 21 years, Mr. Wedin said. Mr. Eckel was previously at Chiquita and prior to that at Giumarra. He will be on the sales desk here in Santa Paula four days a week and in Temecula one day a week.”

The company hoped to hire two more additional sales people shortly. “We are still looking,” he said.

With the California season just getting started, “obviously we want to do a good job,” Mr. Wedin said. Although Calavo is a publicly traded company, “a lot of the people who own the company have California avocados, so we are getting ourselves organized to take a crop that we think is significantly larger than last year and do a good job with it. In order to do that, we need strong promotions, strong ripening programs and good bag programs focused on the western markets, so that is what we are working on.”

The focus will be on flavor and freshness, “and we will be really rolling here by the end of March,” he said. “We will see increasing volumes in April, May and June, probably peaking in June, July and August. The crop size will determine how long we are going to be going, but we are pretty sure we will have good supplies of fruit into September and October.”