Technomic

Objectives

 

  1. Size fresh avocados in the U.S. (retail vs. foodservice) and segment this usageX
  2. Update casual dining and fast casual major chain usage and atitudes towards avocados
  3. Provide insight into small chain/independent fast casual and casual dining atitudes and usage regarding avocados

Total U.S. Fresh Avocados Volume

Fresh avocados account for 74% of the total U.S. market and represent nearly 1.3 billion pounds in terms of volume. At an equivalent (pre-processing) weight, avocados used for processed and industrial applications account for 443 million pounds, representing 26% of the market. Note that these values represent total volume utilized, excluding spoilage and volume not used for food consumption/production.

• More than two-thirds of processed/industrial avocado use is for retail-oriented products.

2014 U.S. Avocado Market for Food Applications
(1,713 MM lbs.)

  • Fresh Whole
  • Processed / Industrial

*processed by manufacturers for use in guacamole and other finished products.

Share of Retail vs. Foodservice

Retail volume represents the leading share of fresh avocado volume in the U.S. and accounts for 67% of the market. This includes sales to consumers through traditional grocers, mass/club, produce and other retailers. The foodservice market accounts for the remaining 33% of volume and includes sales to both restaurants and beyond restaurant operators such as hotels, schools, colleges, and healthcare facilities.

• To place this segmentation into perspective, consider that 25% of all meals consumed in the U.S. are sourced from foodservice venues—the remaining 75% of meals are sourced from food that the consumer purchases from retailers for “food at home” meal occasions.

2014 U.S. Fresh Avocado Market
(1,270 MM lbs.)

  • Retail
  • Foodservice

Sources used: USDA, ERS, NASS, IRI/FreshLook, regional avocado boards/associa echnomic trade interviews

Operator Segment Comparison

To provide additional perspective, the charts below compare the fresh avocado market segmentation to the total foodservice market segmentation (which shows share of retail level spending for foodservice). These data points are provided as a reference and serve as a useful benchmark. For example, the total full service market (including both Mexican and non-Mexican venues) represents 53% of avocado volume, but only 36% of consumer foodservice spending overall.

2014 U.S. Fresh Avocado in Foodservice
(% share)

  • Limited Service
  • Full Service Mexican
  • All Other Full Service
  • Travel & Leisure
  • Business & Industry
  • Healthcare
  • Education
  • All Other Foodservice

2014 Retail Sales Equivalent for all Foodservice
(% share)

Share of Fresh Avocados in
Foodservice by Origin

Avocados from Mexico account for the largest share of fresh avocado going to the U.S. foodservice market, representing 265 million pounds in 2014, which is 63% of the total market. The U.S. represents the second largest share with 93 million pounds. Avocados sourced from Peru, Chile and other markets (e.g., Costa Rica, Dominican Republic, South Africa) represent the remaining 15% of market volume.

  • Mexico
  • Peru
  • Other Markets
  • United States
  • Chile

2014 U.S. Fresh Avocado in Foodservice
(421 MM lbs.)

Key Factors Driving Growth

The following growth factors have a notable inuence on the ongoing development of the fresh avocado category in the U.S. foodservice market.

  • Overall, interest in fresh avocados is growing in foodservice and is driven, in part, by growing consumer awareness and consumption of avocados both at home and away from home.
  • While traditional Mexican avocado menu items (e.g., guacamole) and more mainstream menu items (e.g., sandwiches, salads) represent a critical driver of demand for fresh avocado products in foodservice, there is also growing interest in emerging menu applications and innovative usage of avocado across menu application types, such as use in beverages and desserts.
  • The small assortment of fresh avocado types (mostly sizes) available through foodservice distributors greatly limits the ability of operator choice.
  • Demonstrating quality and true product superiority are critical to building consistent repurchasing behavior among operators. Operators most frequently look at variety (e.g., Hass) to judge quality.
  • Demand is somewhat hampered by concerns over supply limitations and cost uctuations.

Changes in Fresh Avocado Purchasing

More than half (61%) of the small chain/independent casual dining and ne dining operators surveyed that purchase fresh avocado indicate that they are purchasing higher volume than they were two years ago. Only 3% indicate that their volume is down, with the remaining 36% experiencing no change in volume.

“Are you using more,less or about the same volume of
fresh avocados today than you were 2 years ago?”

Base: 247 casual dining and fast casual operators that purchase fresh avocado for their operation.

  • More volume
  • No change
  • Less volume

Operational Reasons why Usage of Fresh is Growing

Among small chains/independents, for both casual dining and fast casual operators , the leading factors driving growth of their fresh avocado usage include increases in the number of menu items incorporating avocados, as well as general improvements in operator performance. The latter is especially true for fast casual operators, which have grown at a substantially higher rate than other restaurant segments over the last several years. Note that only 16% of operators indicate that they have switched from processed avocado formats to fresh avocados.

 

Historic & Forecast Growth

Growth of fresh avocados in U.S. foodservice is expected to continue strongly through 2019, with a slight acceleration in growth resulting from emerging uses in foodservice applications and strong consumer demand. Between 2014 and 2019, the market is expected to grow 8.1% annually in poundage, driven by expanded usage in both restaurant and beyond restaurant segments. Overall improvements in the U.S. foodservice market will help boost growth as well. However, growth of fresh avocado volume has and will far outpace the foodservice market overall.

Messaging to Address Operator Needs

The following insights are related to opportunities around messaging that targets foodservice operator decision makers.

  • Promote expanded avocado uses. Beyond the leading menu applications (e.g., sandwiches, salads, etc.) other innovative menu support to operators for using avocado as an ingredient in other menu applications (e.g., sauces, ethnic entrées, blended beverages, etc.).
  • Emphasize benefits of Mexico’s growing region. Communicating key benefits of the growing region (e.g., consistent supply, high quality standards, avocado uniformity, etc.) can help develop key associations about Avocados from Mexico among U.S. foodservice operators.
  • Educate operators on nutritional elements. Though operators are widely aware of the positive nutritional attributes associated with fresh avocados, providing materials and other support that helps them communicate these benefits to patrons (e.g., via menus, server recommendations, etc.) can be highly beneficial in terms of enabling operators to communicate the benefits of fresh avocados.

 

Chain Targeting

Important considerations for developing and benefits go-to-market strategies include:

  • Develop strong relationships with large national accounts that operate within the Mexican (full and limited service), varied menu (full service), and other sandwich (limited service) sub-segments.
  • Identify relevant emerging chains and explore opportunities to help them develop menu orderings that incorporate fresh avocado products.
  • Leveraging research to promote the positive perceptions of the industry and consumers have about Avocados from Mexico to perspective key accounts.
  • Share menu development expertise around salads, sandwiches/wraps and other leading items to strengthen Avocados from Mexico as the go-to source for insights and menu ideas.