3 Ways to Cope with the Looming Avocado Shortage
Feb 16, 2022
What happens when the supply chain of one of your most popular ingredients vanishes overnight? U.S. restaurants that serve avocado may find out very soon.
On February 11, the U.S. government suspended all avocado fruit imports from Michoacán, Mexico, the only state currently approved to export avocados to the U.S. According to the USDA, the suspension came in response to a threat of violence made against one of USDA’s health inspectors in Mexico and will last for “as long as necessary.”
Predictably this development has sent U.S. restaurant operators scrambling to secure supplies for this menu favorite. As the current inventory of fruit is depleted, prices could increase dramatically—and they were already high.
Before importation stopped, avocados had reached their highest price point since 2011—100% more expensive than they were a year ago.1
“The price increase we’re seeing today is running two or three months ahead of historical data if you follow the trend,” says Jeremy Scuffham, Senior Marketing Manager, Product, at Simplot. “You had the extra demand of the Super Bowl, the effects of COVID on labor, and the cost of freight. The price of avocados will most likely go higher."
What supply remains—any fruit inspected and certified for export before February 11—will begin finding their way to the highest bidders, and that supply could be exhausted in just days.
What restaurants can do to cope with an avocado shortage
This is just one more setback in a year filled with thorny supply chain issues for restaurants. Here are three steps you can take to mitigate the shortage and continue to serve delicious avocado, even if the import suspension drags on.
Switch to prepared avocado products. Unlike whole fruit, prepared avocado products are NOT covered by the suspension and continue to be produced and shipped into the U.S. from Mexico just as before. Prepared avocado offers several attractive benefits:
• It’s available year-round with consistent pricing and quality.
• Picked and processed at the peak of ripeness for rich flavor and creamy texture.
• A smart way to reduce expensive labor and eliminate waste.
• High Pressure Processed (HPP) for food safety without preservatives.
• Frozen products offer extended shelf life, providing great flexibility in the face of uneven
restaurant traffic during the pandemic.
Upcharge for avocado. This will come as no secret, but one way to offset skyrocketing prices for whole fruit is to charge more per dish. U.S. consumers have long demonstrated a willingness to pay more for dishes with avocado. Now, with the price of individual avocados approaching $1.20 at the grocery store, customers know restaurants are under real pricing pressure. And if they don’t…
Educate your customers. Start by training your servers on what’s happening in the market for whole avocados and how to talk to your customers about the increase in prices. Many patrons are sympathetic to their favorite restaurants and will understand paying a dollar or two more if they understand why. Here are some talking points to share in person or in writing:
• 8 out of 10 avocados in the U.S. are imported from Mexico
• The U.S. government stopped importing Mexican avocados
• It’s uncertain when avocado imports will resume
• In the meantime, avocado prices are at a record high
Simplot Harvest Fresh Avocados prepared avocado products are a tempting alternative
“We’re open for business. The suspension doesn’t affect our avocado portfolio of products. There’s no disruption in our production, trucking or forward distributions centers at all,” Scuffham explains. “We have supply to meet the heightened demand.”
Simplot has been sourcing prepared avocado products from Michoacán, Mexico, since the 1990s. In addition to all of the benefits of prepared products noted above, Harvest Fresh™ Avocados products are made exclusively from 100% Hass avocado, the industry standard for flavor and texture.
Simplot offers a wide array of products, in fresh and frozen formats, to meet a range of operational needs:
Prepared avocado pulp
Pulp is a considerable time-saver used as a spread, topping or base for guacamole or other recipes. Consider:
Simplot offers a number of popular flavor profiles, from mild to spicy. Consider:
Bear in mind that Simplot’s fresh avocado products are made to order and therefore require additional lead time for delivery.
“The sooner operators convert to a prepared avocado solution, the less stress and disruption to their businesses,” says Scuffham.
When will the avocado shortage end in the U.S.?
“That’s the million-dollar question,” Scuffham says. “The longer it goes on, the bigger economic impact. The fruit for next week is already picked and already ripening and it’s going to start rotting because it can’t get to the U.S.”
There is already intense pressure on both sides of the border to end the import ban on whole avocados. Mexican growers stand to lose millions of dollars as unsold fruit rots in their orchards. And U.S. restaurants, grocers and consumers will be clamoring for avocado as Cinco de Mayo approaches.
Unfortunately, American growers currently meet only 10% of U.S. market demand. And, even with imports from Peru and Chile, these producers can’t make up the shortfall caused by the suspension, according to analysis by JPMorgan Chase.2
Furthermore, even though the state of Jalisco was recently permitted to export avocados to the U.S., it won’t begin to ship until June.
In the meantime, operators will need to find creative ways to span the gap. Prepared avocado products could do just that.
“We’re seeing immediate interest in our products as a solution and I don’t anticipate that changing anytime soon,” says Scuffham. “Even after the suspension ends, operators will still have to deal with the labor shortage and rising inflation. The best action for any operator or distributor is to minimize their risk with the consistent cost and quality of prepared products. We just don’t know when this is going to end.”
1 Avocado prices could spike as U.S. suspends imports from Mexico
2 Guacamole Crisis: Chipotle faces shortage after US halt on Mexican avocados