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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)

Image 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 and higher volumes in the market will continue to drive up consumption. Production and supply volumes make the avocado market an unpredictable one.

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 will likely happen again when soon looking back at 2020.

After a huge peak in volumes in 2018, Europe’s avocado import in 2019 seems to have stagnated at just above the 600 thousand tonne mark. But nothing could be further from the truth. But nothing could be further from the truth. Peru and South Africa, the leading suppliers, both saw their export potential decline in 2019 and as a result the European import volume remained the same. But this gave the opportunity to prices to recover and drive up the import value to almost 1.6 billion euros (see Figure 1).

The year 2020 will look more like 2018 with the supply heading for a new record. But this time the current market depended heavily on the retail sales, while the food service market has been down due to COVID-19. Especially the summer supply peaked due to the high volumes (again) from Peru causing prices to drop to a level lower than in the past five years. The winter supply of 2020/21 will likely be similar to the previous year.

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. 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 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 1: European import of avocados

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 1.16 kg per capita. In the United States this is 3.5 kg and in Canada 2.5 kg. Mexico, the world’s largest avocado producer, even consumes 6.5-7 kg per capita.

The consumption of avocados in Europe has grown on average by 8% in three years (2017-2019) and the consumption in 2019-20 was 73% higher compared to 2015-2016. Scandinavia has 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 and the United Kingdom are the leading end markets for avocados, while Scandinavian countries have the highest consumption per capita. Although the growth in 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 (June 2019 – May 2020)

 

Estimated marketed volume in 2019-2020 (in tonnes)

Population in millions

Consumption per capita (g)

2019-20 compared to 2018-19

2019-20 compared to 2015-16

France

130,797

66.9

1,955

-10%

27%

United Kingdom

95,054

66.3

1,434

-10%

18%

Germany

89,315

82.8

1,079

8%

119%

Spain

67,500

46.7

1,445

1%

19%

Scandinavia (Sweden, Denmark, Norway, Finland)

57,074

26.7

2,138

-1%

13%

Netherlands

40,000

17.2

2,326

0%

48%

Italy

23,147

60.5

383

4%

102%

Source: Fruitrop Magazine no. 271

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.

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 five largest consumers 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.

Source:

Imported avocados from non-European suppliers:

ITC Trademap (based on UN Comtrade)

279,000 tonnes

Market Access Database (based on Eurostat)

309,000 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 165,000 tonnes of avocados in 2019, and had a calculated annual local demand of 131,000 tonnes until May 2020. 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 a consumption of almost 2 kg per capita. Regular price increases also slow down the growth in avocado consumption. According to FranceAgriMer, recent retail prices in 2019 varied between €1 and €2, while the prices three or four years earlier never passed €1.50. 

In supplying the French market Spain (38,000 tonnes) was the main supplier in 2019, followed by Peru (32,000 tonnes). Israel and Mexico, also winter suppliers like Spain, follow in third and fourth place. It shows that a regional product (from Spain) is highly preferred, but also that there is a strong demand for avocados in the winter season.

Spain and Israel are not known to be the most economic source of avocados. France focuses on quality and local products, including organic, and that price is less of an issue.

Tip:

  • 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.

United Kingdom: Important consumer but with increasing economic pressure

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

The United Kingdom imported 116,000 tonnes of avocados in 2019. This was slightly less than in the previous year. Like in France, consumption in the United Kingdom increased fast until 2016. But now uncertainty about Brexit (the United Kingdom leaving the European Union) and the devaluation of the British pound contribute to less attractive prices and consumption growth has levelled out.

Nevertheless, the United Kingdom remains one of the principal markets for avocados. Expect prices to face more pressure due to inflation, 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. On the longer term you may benefit, especially when you are in a similar supply season as Spain – the main European producer of avocados. In a no-deal Brexit the United Kingdom will likely import more avocados from non-European suppliers.

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 and is still developing its avocado market. Currently, the consumption is just over 1 kg per capita but rising. Avocados are praised because of their health benefits and the German consumption is expected to catch up with other northwest-European markets.

The imports in 2019 were only 3,000 tonnes lower than the record of 94,000 tonnes the year before, when low retail prices had contributed to the higher imports. The import value held up, increasing almost 3%, and the prospects for 2020 are again a record volume. 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.

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.

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.

With 55,000 tonnes, Spain is the main producer of avocados in Europe. But 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 136,000 tonnes of imported avocados came from Peru and Mexico. But there is also an increase in imports from Morocco (8,000 tonnes) 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 (46,000 tonnes), followed by the Netherlands and Germany (15,500 and 12,000 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 (<400 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 most 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 25,500 tonnes in 2019, an increase of 17% compared to the previous year. The consumption in 2019-2020 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. British retailer Tesco also took convenience a step forward by introducing the EasyAvo in 2018, an easy to peel avocado.

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 have committed to the Sustainability Initiative Fruit and Vegetables (SIFAV). SIFAV aims for 100% sustainable imports of fruits and vegetables from Africa, Asia and South America and will continue with goals to reduce the environmental footprint and strive for fair living wages.  For example, together with SIFAV, the Eosta company 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 had little negative effect on the avocado consumption.

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.

Image 2: 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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