Source: Avobook

Emiliano Escobedo has dedicated his professional career to the promotion and development of the avocado market. It is a world that motivated him from a very young age. After graduating from college, he began his career at a public relations agency in New York, focused on food promotion, where he worked with the avocado industry as a client of the Association of Avocado Producers of Mexico (APEAM).

“The Mexican avocado industry was just beginning to export volumes. I worked with several clients, including the Fresh Fruits from Chile campaign, promoting various products such as mangoes, mushrooms, berries, and, of course, Mexico's first avocado campaigns. My interest in the avocado industry grew and then an opportunity arose to work directly with APEAM,” he recalls.

After several years in the market intelligence department, he was promoted to marketing director, running promotional campaigns in the United States, Europe, Japan, and Canada. In 2011, he was recruited to head the Hass Avocado Board (HAB), starting in January 2012.

“I have been in this position for more than 12 years, promoting  Hass avocados,” he told Avobook.

Currently, he is the executive director of the HAB, where he has successfully led the promotion and expansion of avocado consumption in the North Country.

How does the HAB operate to activate avocado promotion in the United States?

“The HAB was established in 2002, following the passage of a federal promotion and research law by Congress and the President of the United States. This law allows the creation of the Hass avocado promotion, research, and information program in the United States. The main objective is to strengthen the domestic industry and increase avocado consumption in the United States, financed by a mandatory fee of five and a half cents on each kilo of avocado sold. Fifteen percent of the funds raised are used for generic promotion of the product, while the remaining 85% is used to differentiate the various exporting origins, such as Chile, California, Peru, Colombia, and Mexico. Each country has its association, and the Hass Avocado Board focuses on generic promotion and research that benefits all.”

What has the Hass Avocado Board done to increase avocado consumption in the United States?

“We have five strategic priorities: nutrition, market research, sustainability, public relations, and communications. We invest approximately 15% of our annual net income in nutrition research, developing and advancing the discovery of avocado's human health benefits. We have also created a Hass avocado sustainability center to lead research and information on sustainability in the avocado industry. In communications, we invest more than a third of our annual budget, promoting avocado nutrition and sustainability, as well as directing campaigns to the industry."

Are there numbers to validate the results of all that management?

“We recently conducted an independent evaluation of the program's success, conducted by economists at the University of California, Davis. They determined that the demand for avocados in the United States has grown without decreasing in price. Adjusted for inflation, the price received by growers and importers has been positive, even though the supply of products has tripled over the past 20 years. The profit-to-cost ratio is 2.5: for every dollar invested in promotion, we receive $2.5 in profit. This analysis includes the years 2018 to 2022 and was presented in March of this year.”

What is the U.S. consumer asking from avocados that can increase consumption?

“We conduct an annual representative survey of the U.S. consumer and the number one reason for buying avocados in the U.S. is for their health benefits. People eat it because it's healthy. But they also do it for another reason: because they like it. We have had significant growth in avocado consumption in the U.S., but only two-thirds of households consume avocados regularly. There are still one-third of households that don't eat it. Among those households that consume it, 85% of total consumption is by only one-quarter of them. There are opportunities to grow this market by educating consumers about the health benefits and the many ways to consume avocados.

How much has consumption grown in the US in the last 10 years?

“We focused on more avocados being consumed at a better price and we have succeeded: Comparing 2023 with 2013, consumption has increased by 68%. Not only has per capita consumption grown, but also the value in the market. The value of avocados has increased, and people are willing to spend more. In dollar terms, the increase has been 72% in the last 10 years, showing that not only is more consumed, but the value of the product has gone up.”

The most basic rules of economics say that the greater the supply, the lower the price. Somehow it is regulated under that logic. And if something has happened in the US for a long time, it is that the amount of fruit entering has been progressively increasing and, as far as I understand, it has not had an impact on the price. Is it a rarity of the product?

“The price has gone up due to the strong demand generated by our promotional programs. The supply and demand equation indicates that when supply goes up, prices should go down unless demand increases at the same rate or exceeds it. We have been successful in having demand exceed supply while maintaining or increasing prices. In the last 20 years, supply has tripled, but demand has exceeded that curve, keeping prices stable or rising.”

But will this be finite, will there be any projection of that stopping?

“The volume that enters the U.S. or is produced in the U.S. pays a mandatory fee per kilo. It is crucial to continually evaluate the investment in promotion and research in proportion to the volume marketed. If the percentage of resources allocated to promotion decreases, the return on investment may not be sufficient to generate the necessary demand. However, according to UC Davis researchers, the U.S. market still has plenty of opportunity for growth. One-third of households still do not consume avocados, and of those that do, 25% spend less than $6 per year, while the top 25% spend close to $100 per year. There are many growth opportunities both regionally and annually, taking advantage of the right season for each producing country.”

When one analyzes the avocado market in the United States, the great king as a supplier is Mexico. However, other players have been entering, such as Peru, Colombia, etc., which are producers that were sending to Europe, but are much closer to the U.S. How do you see the projection for these countries that compete with Mexico?

“The U.S. market is sophisticated and knows the product from different origins such as Peru, Chile, California, and Mexico. Each country has its optimal quality window and it is crucial to properly manage that quality and look for markets during those windows. Mexico is a strong competitor, but there are opportunities for other countries in different parts of the market, as long as quality is maintained and windows of opportunity are taken advantage of.”

After California, which states consume the most?

“Not including California, Texas and the Southeast (Florida, Carolina) have shown significant growth in avocado consumption, reaching levels similar to the national average.”

What is the most important lesson from the HAB experience?

"The numbers speak for themselves, demonstrating that it is essential for all producers worldwide to invest in promotion. Contributing a small fee per kilo is crucial for the industry to continue to grow not only in the United States but also in other destinations. Everyone must participate for the business to be sustainable and beneficial for all players in the avocado production and distribution chain.”

Related article: HAB: Avocado oversupply to challenge industry