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The European market potential for avocados

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The supply of avocados is increasing fast, but the European market still has room for growth and can absorb the higher volumes. The healthy nature and multiple uses of avocados result in a strong consumer demand for avocados. Fruit businesses can free-ride on the promotion of avocados, but to join the success in trade your supply must be consistent and of high quality.

1. Product description

Avocados (scientific name: Persea americana) are classified into four main types: Guatemalan, Mexican, West Indian and hybrids. Commercial varieties include:

The Hass avocado, a Guatemalan race with pebbled black skin, is the main planted variety today. There are new Hass varieties available, such as Lavi Hass, Lamb Hass and Gem Hass. These Hass sub-varieties help extend the supply season.

Harmonized System (HS) code

08044000 Avocados, fresh or dried

Commercial varieties

  • Hass (Guatemalan)
  • Fuerte (hybrid)
  • Ettinger (hybrid)
  • Pinkerton (hybrid)

Minor commercial varieties

  • Reed (Guatemalan)
  • Ryan (Mexican/Guatemalan)
  • Zutano (Mexican)

Figure 1: Examples of avocado varieties

Examples of avocado varieties

Top: Benik, Hass, Nabal. Bottom: Ettinger, Fuerte, Pinkerton
Source: OECD (2004), Avocados, International Standards for Fruit and Vegetables, OECD Publishing, Paris

2. What makes Europe an interesting market for avocados?

The European demand for avocados is growing. Higher volumes in the market will continue to drive up consumption, but production and supply volumes make the avocado market unpredictable.

Avocado will be the second best-selling tropical fruit in the world in 2030

According to the Agricultural Outlook 2021-2030 report from the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO), avocado is expected to become the second-most traded major tropical fruit by 2030, after bananas. It will overtake the export volume of both pineapples and mangoes. A growing global demand and major investments in production are at the base of this expansion.

Although avocado has the lowest production among the major tropical fruits, the growth outperforms the other fruits. The global production volume is expected to reach 12 million tonnes, three times more than a decade ago. In Mexico, the world’s largest avocado producer, there was a decrease in volume in 2020. But in the long-term Mexican supplies may increase by 5.2% on an annual basis to fulfil the growing demand in the United States. Countries such as Peru, Colombia and Kenya continued their growth with double digits, with most of their exports being destined for the European market.

The United States and the European Union are expected to remain the largest importers. According to OECD/FAO these regions will be responsible for 40% and 31% of global imports in 2030 despite the growing trade with other regions such as China and the Middle East. For growers and exporters it will be important to focus on specific regions where demand has room to grow, but also to diversify their markets, anticipating on markets becoming less concentrated.

Europe can absorb growing volumes of avocados

Avocado has been the most dynamic fruit in the past years, characterised by an insatiable demand and an unbalanced supply. Europe is also able to absorb more avocados. This happened during the production peak in 2018 and again to some extent in 2020.

After a peak in volumes in 2018, the leading suppliers, Peru and South Africa, both saw their export potential decline in 2019 and as a result the overall price was higher. In 2020, the COVID-19 pandemic broke out, which initially led to a sudden increase in demand. This demand was mainly fulfilled by retailers since restaurants were closed due to the lockdowns. Once the Peruvian season started, the massive supply made prices drop again to a level lower than in the past five years. Due to these lower prices, consumption stayed strong. All together imports grew to a volume of 700,000 tonnes and a value of almost 1.7 billion euros (see Figure 1).

The advantage of avocados is that they are programmed (contractually planned) by retailers and their promotions can help sell additional volume. This way a much larger volume can be pushed into the market and boost consumption. This is what happened in 2018 and again in 2020, but with a price difference of 30% as a result. Despite the strong demand for avocados, there is a limit to Europe’s ability to keep up with the speed in which avocados are being cultivated for export across the world.

Supply volumes have a major influence in stimulating European imports. In the next years you will see import volumes increase further, but you can expect new price drops when there is too much supply. These drops will be noticeable especially during the Peruvian season, but other suppliers from Colombia, Mexico and Kenya are also reaching volumes that can over-supply the market later in the year. New markets, in and outside Europe, will be necessary to make a growing supply sustainable. In the long term (>3 years), avocados will become a standard product for retailers in most European countries with higher volumes throughout Europe, but also with a slower growth rate.

Tips:

  • Combine your export to Europe with the development of new markets outside Europe, for example in Asia. Diversification will help you spread trade risks and make you less dependent on one region. Make sure you have access to new target markets by checking if your country has a phytosanitary agreement with that country – contact your local food safety authority.
  • Make sure to offer a sufficient volume with at least weekly full-container shipments, as importers favour larger producers to guarantee supply certainty. However, do not prioritise quantity over quality. In the end, wholesalers and retailers demand good quality products and trustworthy suppliers.

Figure 2: European import of avocados (import EU-27 + UK with non-European origin)

European import of avocados

Source: Eurostat / Market Access Database

Still room for growth in consumption

Avocados are appreciated because it is a unique and healthy product (oleaginous or oil containing fruit) with many culinary applications. But compared to other high-demand regions, European consumption is still underdeveloped.

The average consumption in Europe is approximately 1.33 kg per capita. In the United States this is 3.8 kg and in Canada 2.5 kg. Mexico, the world’s largest avocado producer, even consumes 6.5-7 kg per capita. According to Cirad’s Fruitrop Magazine the consumption of avocados in Europe has grown by 11% from 2019 to 2020. Scandinavia and France have the highest consumption rate per capita, but the recent growth is most notable in countries where consumption is still relatively low such as Germany, Italy and Eastern Europe.

The differences in consumption within Europe and the gap with developed consumer countries such as the United States and Canada show that there is much potential for growth. However, with current growth rates, market maturity could be reached within five to eight years and consumption will become more stable. According to the World Avocado Organization (WAO) the avocado consumption in Europe can reach the same level as in the United States in the next eight years.

Tip:

  • Make sure that the expansion of your production is in line with market demand by keeping an eye on market developments on the European avocado market and beyond, for example on Freshplaza, Fruitnet, FruiTrop, and FreshFruitPortal.

3. Which European countries offer most opportunities for avocados?

France is the leading end markets for avocados, while Scandinavian countries have the highest consumption per capita. Although the growth in some of these leading consuming countries is slowing down, Germany, Italy and Eastern European countries still have lots of potential in the coming years. Many of these countries are either supplied by traders in the Netherlands, or by Spain which more and more is fulfilling the role of international distributor.

Table 1: Estimated avocado consumption in Europe in 2020

 

Consumption in tonnes

Population (2020)

Consumption per capita

Change 2016-2020

Change 2019-2020

Netherlands*

23243

17,4

1,34 – 2,41

 

 

Belgium

13165

11,5

1,14

23%

0%

Denmark

16374

5,8

2,81

22%

-4%

Finland**

7746

5,5

1,41

   

France

144015

67,3

2,14

22%

4%

Germany

104452

83,2

1,26

119%

23%

Italy

26840

59,6

0,45

107%

19%

Norway

14833

5,4

2,76

16%

6%

Poland

18826

38,0

0,50

123%

10%

Spain***

114599

47,3

1,61 - 2,44

100%

11%

Sweden

21566

10,3

2,09

13%

8%

Switzerland

18836

8,6

2,19

32%

17%

United Kingdom

100913

67,0

1,51

5%

-2%

Calculated consumption based on import, export and production statistics, sources: ITC Trademap, Eurostat, and compared with data of Cirad / Fruitrop.
* Netherlands: not reliable due to transit function and partly based on data Cirad / Fruitrop
** Finland: based on data 2018
*** Spain: based on data 2019 and data Cirad / Fruitrop

The Netherlands: your main trade hub for avocados

The Netherlands is the main trade hub for avocados in Europe. You will find several major avocado importers in the Netherlands, where avocados are ripened and from where they are distributed to many European destinations.

The Netherlands is responsible for half of Europe’s avocado imports. But the country is also the largest non-producing exporter of avocados in the world. Large volumes are re-exported to Germany, France, the United Kingdom, Scandinavian countries and many others. Dutch traders have become specialists in avocado ripening, packing and logistics. They are also used to working with different sustainability requirements of European retail chains.

Because of the leading role in avocado trade, the Dutch market is familiar with avocados and has a large consumer market. With a relatively small population of 17 million people it is among the top consumption countries in Europe. However, there are some discrepancies in trade statistics which may have altered the calculated consumption. Despite the differences in the registered imports, statistics confirm the leading role of the Netherlands as a trade hub for avocados.

The Netherlands will remain a main trade hub for avocados but over time its function may become more logistical and less commercial as other avocado specialists emerge throughout Europe.

Source:

Imported avocados from non-European suppliers in 2020:

ITC Trademap (based on UN Comtrade)

306,005 tonnes

Market Access Database (based on Eurostat)

373,011 tonnes

Tips:

  • Meet with potential buyers by presenting yourself at fairs like Fruit Logistica or Fruit Attraction. You can also search for importers beforehand on the Fruit Logistica virtual market place.
  • Consider using the established trade routes and find an importing partner in the Netherlands, since the Netherlands has become the most dominant transit country for avocados for the European market.

France: Your largest destination for avocados

France is the largest destination market for avocados in Europe with a focus on high-quality avocados. Potentially you can find decent margins when you can fit your product into the major retail chains.

France imported 171,000 tonnes of avocados in 2020, and had a calculated local demand of 144,000 tonnes. Although France offers the largest market for avocados in Europe, consumption growth has been slower than the European average (see Table 1). This can be attributed to the fact that France is a more mature market with an annual consumption of over 2 kg per capita. Regular price increases also slow down the growth in avocado consumption. Despite the higher prices, organic avocados are taking an increasing share of the market.

In supplying the French market Peru overtook Spain again, with 41,000 tonnes versus 39,000 tonnes. Mexico, Israel and Kenya complete the top five. A local or regional product (from Spain) is highly preferred, but there is a year-round demand. Spain and Israel are not necessarily the most economic sources for avocados. Price is less of an issue for a number of buyers that focus on quality and local products, including organic.

Tips:

  • Find buyers that supply larger retailers in France and be prepared to commit to extra quality requirements. Prices and margins are likely to be better on average when working with retail contracts compared to the traditional wholesale markets.
  • Check organic and conventional avocado prices in French import, wholesale and retail on the Market News Network of FranceAgriMer (in French). 

Germany: Provides most growth perspective

Germany is in full development. Promotion of health benefits and discount offers are important drivers for a fast-rising avocado market. This makes it an interesting country for exporters.

Germany is probably the country with the most growth perspective besides Italy. Germany has the largest population in Europe and is still developing its avocado market. Currently, the consumption is just over 1.2 kg per capita and rising. Avocados are praised because of their health benefits and the German consumption is expected to catch up with other northwest-European markets. In 2020, Germany surpassed the demand in the United Kingdom and became the second-largest consumer market for avocados.

Total imports in 2020 increased to 119,000 tonnes, 22% more than the year before. Favourable consumer prices and the additional attention for healthy eating during the COVID-19 pandemic contributed to growth. Only air-freighted avocados that are common in wholesale channels experienced more difficulties due to the pandemic lockdowns. Supermarkets more than compensated for the loss in wholesale. Germany is the home country of discount retailers such as Lidl and Aldi, which often take the lead in offering promotions in avocados. At the same time a retailer like Lidl is known to be one of strictest when it comes to pesticide residues, which can be a barrier for avocado exporters. Germany also has the highest sales revenue for organic food in Europe, making it an interesting market to explore for organic avocados.

Tips:

  • Maintain Lidl standards for supplying the German market, which is known as being one of the strictest. This means the pesticide residue level of your avocados must be a third of the European allowed limits.
  • Focus on the facts when presenting your product such as the results of a laboratory analysis. German purchasers are not very sensitive to emotional sales arguments.

United Kingdom: Important consumer but with increasing economic pressure

The United Kingdom is among the largest markets for avocados (see Table 1), but with high standards and increasing price pressure. As a supplier you must be competitive and well organised at the same time.

The United Kingdom imported 122,000 tonnes of avocados in 2020. This was slightly more than in the previous year. Like in France, consumption in the United Kingdom increased fast until 2016. Rising costs and prices due to Brexit (the United Kingdom leaving the European Union) and COVID-19 has tempered recent fruit sales, and there is an increasing awareness of the sustainability aspects of avocado orchards such as their water use. Nevertheless, the consumption of avocados will continue to increase and a growing interest in plant-based diets will keep up the demand.

The United Kingdom remains one of the principal markets for avocados, but expect continuing pressure on prices, while the quality and certification standards remain one of the highest.

Tip:

  • Be flexible with your volume and prices to remain active in the United Kingdom. There may be trade shifts due to increased administrative burden of EU import. This may provide opportunities for non-EU suppliers, especially when you are in a similar supply season as Spain – the main European producer of avocados.

Spain: Complements production with import

Spain is a producer, consumer and also an emerging trade hub for avocados. For an exporter Spain is an interesting target country, because it is likely you will find a broader market than just Spain itself.

Spain is the main producer of avocados in Europe with 99,000 tonnes in 2020 according to Eurostat. Other sources present somewhat lower numbers of 81,000 tonnes during the 2019/2020 season and 61,500 tonnes in 2020/2021. For that reason, the consumption rate in Spain is difficult to estimate. Either way, Spanish traders also purchase more and more avocados from abroad to complement their own production season and comply with international supply contracts. This makes Spain Europe’s second-largest exporter of avocados after the Netherlands.

Most of the 157,000 tonnes of imported avocados came from Peru and Mexico. But there is also an increase in imports from Morocco (17,000 tonnes in 2020) which overlap with the Spanish season. This confirms the Spanish demand for re-export. Most of the avocados traded from Spain have France as their destination (53,000 tonnes), followed by the Netherlands and Germany (21,000 and 14,500 tonnes respectively).

In the years to come you can expect Spain to become a larger consumer of avocados, but more importantly, it will also play a bigger role in the European avocado supply.

Tip:

  • Use Spanish avocado importers and traders mainly to strengthen your position in France and southern Europe. Visit the Fruit Attraction trade fair to get in contact with Spanish avocado companies.

Italy: An emerging country for avocados

Italy is still emerging as an avocado country. The potential of its large population and underdeveloped consumption should be a reason for exporters to maintain a focus on Italy.

The avocado consumption in Italy is very small in comparison with the population size (450 g per capita) and far behind the European average. In Italy consumers hold on to traditional fruit and vegetables and ‘new products’ such as avocados take time to be introduced. Green skins and smaller sizes (12-14) are popular, but people are getting more used to the Hass variety as well.

Despite the traditional consumers, Italian traders are optimistic about avocados, and with reason. The import volume was nearly 29,000 tonnes in 2020, an increase of 18% compared to the previous year. Most of the import is realised through the Netherlands, France and Spain. The consumption in 2020 is estimated to have doubled in five years’ time. Although Italy’s current import is not among the five top in Europe, the potential of its avocado market must be counted among the ones with the highest potential.

Tip:

  • Take advantage of the potential growth of avocados in Italy and start building relations with importers. Italian companies are normally most focused on their internal market. So to meet them you must go there. A popular gathering place for Italian fruit companies is the Macfrut trade fair in Rimini.

Avocado consumption is boosted by its reputation as a healthy fruit, product promotion and the innovation in ready-to-eat avocados. Due to the increased attention, sustainability has become an important factor in the avocado trade.

Ready-to-eat fuels consumption

The consumption of avocados has been supported by new developments such as ‘ready to eat’. Ripening helps provide convenience and quality at the same time. Consumers are prepared to pay a premium price for high-quality ‘ready to eat’ avocados, because it is a safe and an easy choice. For exporters it is important to check the fruit maturity well before shipping.

The experience in fruit ripening is rising quickly and the technology is being optimised, although there is still room for perfection. Companies offer fruit ripening as a service or large fruit suppliers implement their own ripening facilities. Examples of specialist ripeners are Nature’s Pride and LBP (service provider) in the Netherlands and Ripenow in the United Kingdom.

Recently, in 2018, the German discount retail chain Lidl opened one of the largest ripening facilities of Europe in the Netherlands. From here they will service their distribution centres in the Netherlands and Belgium for avocados, bananas and mangoes. New technologies such as Avos by the company Experience Fruit Quality, a portable solution and non-destructive way to test the quality of avocados, will contribute to an optimum fruit quality for ready-to-eat avocados.

The ‘ready to eat’ trend is particularly strong in the United Kingdom and the Netherlands, but many countries in Europe are following. It will continue to develop further and help boost the consumption, but as an exporter you must always be aware of supplying the right uniform quality.

As an exporter you can best capitalise on this trend by focusing on importers with ripening facilities and supply avocados with an acceptable dry matter content.

Tip:

  • Supply avocados with a minimum dry matter content of 23%, especially when destined for ripening. You can find more information on buyer requirements for avocados in the CBI study ‘Entering the European market for avocados’.

Sustainability has become a precondition

Environmental and social issues are becoming more and more important in the supply of fresh fruit and vegetables. This is also the case for avocados. To stay in business you must work on a sustainable and responsible production.

There are increasing concerns about water resources, deforestation and supply chain transparency. These concerns touch Peru, Chile, Mexico and Brazil, among others. Because avocados are a popular fruit in health food media, negative attention resonates in the public sphere. Although it has had little impact on the general consumption so far, it can influence the sourcing preferences and certification pressure of buyers. Marketers of avocados will have to prove to consumers that their products are produced sustainably – this is a tendency that will only become stronger in the long run.

Avocado exporters have taken steps to improve their sustainability. Companies such as the Chilean Subsole have implemented several projects to confront different environmental issues, including the management of water, soil, energy and waste. Still, as an exporter you must be able to prove your good practices and convince importers and retailers in Europe.

A large number of retailers and importers are committing to social standards such as Sedex Members Ethical Trade Audit (SMETA), or initiatives such as the Sustainability Initiative Fruit and Vegetables (SIFAV). For example, together with SIFAV, the company Eosta has increased the transparency in Kenya in Living wages in practice. Social and environmental standards and certifications such as GlobalGAP, GRASP, SMETA and BSCI have become a precondition for the import of fresh tropical fruit such as avocado.

Tips:

  • Promote sustainable agriculture and proactively show your actions to reduce water usage. Pay extra attention to this in water-scarce regions.
  • Get certified and implement standards. See the SIFAV Basket of Standards for relevant social and environmental standards, but also try to think creatively and undertake activities to guarantee a sustainable production and sustainable water use.

Attention to the health factor of avocados

Avocado has gained a good reputation for its health benefits. In the future you will continue to see avocado grow as a healthy product but you can also profit from the increasing demand for organic-certified avocados.

Consumers in Europe are becoming more aware of health issues and pay more attention to their diet. Avocado fits well in this trend thanks to its good fats, fibre, vitamins and minerals. It also serves specific consumer groups that prefer a plant-based diet, such as vegans, vegetarians and flexitarians. All these aspects are used in the promotion of avocados and contribute to the increasing consumption throughout Europe. Health is also the reason that the COVID-19 pandemic gave a positive impulse to the consumption of healthy fruits such as avocados.

Thanks to the increased attention to health and the environment, the interest in organically produced avocados is growing. The current supply does not fully satisfy market demand due to the difficulty of producing organic avocados. Organic avocados can be an opportunity for growers that are able to produce according to the strict European guidelines for organic production.

Tip:

Promotion, innovation and branding improve consumer experience

The promotion of avocados has reached extreme levels. It explains why avocados followed a strong upward trend, but it is also a reason to be cautious as food hypes never last forever. As a supplier you can best add to the promotional strength of avocados by providing a positive background story about the origin and the growers of your product.

Figure 5: Example of Italian branding of ‘creamy, organic avocado with soft pulp’

: Example of Italian branding of ‘creamy, organic avocado with soft pulp’

Image by ICI Business

Branding and promoting can contribute to consumers’ experience and quality perception. Avocados have great promotional value and are unique in the fresh sector for their level of innovation. While importers create ready-to-eat or organic avocado brands, trying to link their brand to quality, retailers try to steal the show with all kinds of variations:

The Western obsession with avocados has become so strong there are nowadays even restaurants dedicated to avocados as a main ingredient: the franchise restaurant The Avocado Show started in Amsterdam and Brussels, and the Avobar launched in London.

Tips:

  • Create and communicate the story of your product (what promise does it deliver?) and be consistent with your supply. Avocados benefit from their promotion, but your contribution as a supplier is limited and your actions must be targeted at your buyer.
  • See the CBI Trends in fresh fruit and vegetables for more information on trending topics.

This study has been carried out on behalf of CBI by ICI Business.

Please review our market information disclaimer.

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