Coronavirus impacts avocado season with drop in foodservice sales

avocadocovid The fresh fruit and vegetable industry has done relatively well in the first half of 2020 considering that the novel coronavirus has completely upended our economy. But there have still been many challenges and hurdles to try to overcome.

“No section of our economy has escaped COVID unscathed,” said Giovanni Cavaletto, vice president of sourcing for Index Fresh, Bloomington, CA. “Avocados have done better than most, but we have felt the impact. Consider that in the dead of winter — before Covid — we were selling 50 million pounds per week (in the United States) for $50 per case. Right now, we are selling 45 million pounds per week in the mid-$30s range. There has been an impact.”

Cavaletto said the most obvious factor was almost the complete loss of foodservice business in the March/April time frame. Avocados are a great seller at foodservice with that channel consuming a lot of fruit on a weekly basis. The numbers tell the story with an average of 57.5 million pounds of avocados shipped during the first 11 weeks of 2020 being cut in half on a weekly basis during the last couple of weeks in March and the first couple in April. Supplies did rebound and they have been excellent for the first half of the year but moving that volume has come at a price as Cavaletto pointed out.

“But the good news is the fruit is moving,” he said.

Again, the numbers bore that out. In the first six months of the year, almost 1.4 billion pounds of avocados were shipped in the United States, with the volume in June being especially heavy, averaging more than 61 million pounds each week.

Rankin McDaniel Sr., president of McDaniel Fruit Co., Fallbrook, CA, said in mid-July that the market price had dropped in the past month and he opined that the coronavirus is part of the problem. “Foodservice has been off,” he said. “We did see a rebound in foodservice sales but that has leveled off,” he said of the partial reopening of restaurants and then the closing down again, especially across the Southwest.

McDaniel said it is clearly difficult to maintain the market price when the volume is peaking, and the number of potential customers is less than optimum.

Another impact of the coronavirus pandemic has been a sharp rise in bagged business. Many different commodities in the produce department have noted a huge increase in the sale of packaged products and avocados are no different. Bob Lucy, president of Del Rey Avocado Co. Inc., Fallbrook, CA, said consumers like the opportunity to get in and out of a store quickly. A bag with four or five avocados in it – and typically value-priced – allows shoppers to make a quick purchase and go home with their weekly supply without rummaging through a bulk display that others have also picked through. The sale of bagged avocados has been a trend for several years and coronavirus seems to have accelerated that retail option.

Donny Lucy, a vice president at Del Rey, believes both the coronavirus and the more moderate price of avocados this year have resulted in extra demand for California fruit. He noted that in 2019 California had a very short crop (220 million pounds) and received a significant premium for its fruit. He said there were periods when there was a $20 gap between California avocados and some offshore fruit. At that price differential, retailers tend to promote the offshore fruit and many consumers reach for the cheaper option. With the market price f California fruit being down as much as $30 per carton this year because of greater supplies, the gap is less of an issue.

He added that the coronavirus also has many consumers and retailers looking for domestic supplies across the board. For much of the past four months, retailers have been focusing on keeping their shelves stocked and not as concerned with special promotions and displays. Lucy said that initially the foodservice business was off 80-90 percent. “It has started to comeback but I’d say we are only at about 60 percent of normal,” he said, adding that the fast food and fast casual restaurants are once again buying avocados but the restaurants specializing in in-store dining are not.

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