Holy guacamole! Why avocados are so expensive?!
If you have been wondering why avocado farming in Kenya has all of a sudden become the song of every investor, then this sneak peek into the global avocado prices will open your eyes.
Avocados have been expensive for a while now. Typically, most Canadians would expect to pay $1 per unit. Many have noticed that avocado prices have been high in most parts of the country. In the last few months, it’s almost impossible to find them below $2. And if you do buy an avocado, it will likely be smaller, darker and much less appetizing.
However, if you’re expecting avocados to be cheaper, you’ll need to wait a while longer. The same high price is happening in the United States due to rising trade and border tensions between the U.S. and Mexico.
The production of California avocados was down this past year as a result of dry weather. Yields were much lower and forced the United States and Canada to go elsewhere to purchase avocados. And since July is a low point for Mexico’s production cycle for avocados, prices are not going to be dropping any time soon. In Canada, 95 per cent of all avocados come from Mexico, which produces 34 per cent of the world supplies of avocados.
What’s adding pressure on avocado prices is its popularity. Canadians spend almost $300 million on avocados a year. In an era where you see many new diets become mainstream, avocados are fairing quite well compared to other commodities. Vegans and vegetarians stay away from meat products. Ketogenic loyal fans stay away from bread, potatoes and many other products. Avocados are appealing because they are immune to many of the dietary trends.
Consumers’ greater interest and awareness of healthy eating is certainly a driving force, headed by guacamole’s increasing popularity. Also, improvements have been made in the supply chain in areas such as ripening and grading. Avocados on toast is more fashionable than ever. Over the last few years, the quality of avocados we find in Canada has improved vastly.
The food service industry is trying to cope with these prices by using less avocados for guacamole and salads. Some opt to either serve something else or to serve a substitute. Some are using edamame, broccoli, green peas or even asparagus instead of avocados to make guacamole. These are cheaper ingredients and restaurateurs save by reducing the number of avocados they are using. Whether or not restaurants are telling the consumer about these subtle changes is another matter. Nevertheless, many restaurants are changing recipes.
It is easy to see how the market for avocados will only continue to expand, and no doubt, Mexico will have more competition from emerging producers, such as China, Australia and elsewhere, which could supply Canada with a more socially acceptable product. With more segmentation, innovation, expansion and new styles of merchandising, growth can easily be obtained for avocados. If someone can bring a seedless avocado to Canada, consumers will likely return the favour by buying more of the green stuff.
As for retail prices in Canada, the good news for avocado lovers is that prices are expected to lower by October as Mexico ramps its production back up again. Yet until then, hold on to your guacamole!
By: Dr. Sylvain Charlebois, Director of the Agri-Food Analytics Lab, Dalhousie University, Canada.