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Ripe and bagged fruit driving Calavo’s avocado sales

Over the past decade, Calavo Growers Inc. in Santa Paula, CA, has continually added ripening rooms around the country and beefed up its bagging capabilities at each of its packing facilities.

These twin efforts have enabled the company to increase its sales of pre-conditioned fruit as well as value-oriented bagged avocados. Both of those retail offerings are on-trend in the avocado business.

Rob Wedin, vice president of fresh sales and marketing for the company, said both trends result in avocados being sold at a faster clip. He said ripe avocados create quicker turns at retail and more sales opportunities.

“When consumers are buying bagged avocados, they are talking home four to six at a time, which also means more sales,” Wedin noted, adding that it also means a great ring for the retailer, not to mention very high dollar sales per display space area.

Calavo-De-Mexico-Aerial-ViewAn aerial view of Calavo’s packinghouse in Mexico.With regard to ripe fruit, Wedin revealed that more than 50 percent of the avocados sold by Calavo are pre-conditioned. And a sizable amount of non-pre-conditioned fruit sold by the company is purchased by large retailers and wholesalers who have their own ripening rooms. Add it all together, and a significant percentage of avocados sold in the United States are sold “ripe tonight,” or at least ripe in the next day or so.

Research has long revealed that the selling of ripe avocados is a very effective way to increase sales. Marketers have been touting the idea for three decades, but Wedin said it has really caught on over the last decade. He guessed that 15 years ago, only about 10 percent of the fruit sold by Calavo was pre-conditioned. Today the company has ripening rooms in multiple locations, including California, Texas, Florida and New Jersey. “And we are continually scouting out new locations,” he said.

The Calavo executive said that the firm believes it currently has sufficient ripening capacity to handle demand, but that demand is growing and it’s a foregone conclusion that more strategically placed facilities will be needed in the future.

As it has for the last several years, Calavo continues to hope that avocados grown in the Mexican state of Jalisco are given the opportunity to be sold in the United States. Currently, only fruit grown and packed in Michoacán, the Mexican state that produces about 60 percent of the country’s total avocado crop, can be certified for U.S. export.

Jalisco has passed all the technical tests for certification by both the United States and Mexico, but it is well known that political and trade considerations are holding up final approval. Several years ago approval appeared to be on the verge of being granted just as trade issues between the two countries erupted. Today, experts believe that final certification is largely dependent on the ratification of the new tri-lateral trade agreement among Mexico, the United States and Canada.

Without getting into the politics of it, Wedin said the opening of Jalisco would allow Calavo to fully utilize its new packing facility in that state and more efficiently pack and sell the avocados it grows in Jalisco. Currently, those avocados can be exported to some countries such as Japan and Canada, but cannot be shipped to others such as China, Korea and the United States.

The U.S.-Mexico-Canada Agreement was signed by representatives of all three countries in November of 2018. Recently, there has been some optimism that the U.S. Congress will soon take up the matter, with ratification a distinct possibility. Canada and Mexico are expected to concur once the U.S. Congress acts. That ratification can’t come soon enough for Calavo.