Is There an Avocado Shortage?
Jul 16, 2021
If you’re wondering why the price of whole avocados seems to bounce up and down like a rubber ball, you’re not alone. As much as restaurant patrons love the flavor of this versatile fruit, the volatility of its pricing can make it difficult for operators to menu profitably.
So is there a shortage right now?
Well, it depends when you’re reading this. The cost of whole avocados can vary wildly and fluctuate regularly based a four different factors: global demand, weather in the growing regions, seasonality and labor.
In this article, we’ll explore each of these influences and explain how you can overcome the volatility by taking advantage of the consistent pricing of Simplot’s prepared avocado products.
Higher demand can lead to higher prices
Like most Americans, you’re probably eating a lot more avocado these days—and that’s helping drive up prices. In the U.S., demand for avocado has skyrocketed since the import ban was lifted on Mexican avocados in 2005.1 Between 2010 and 2018, domestic consumption more than doubled, and in 2020 alone, grew by 30%.2
The fruit is also catching on in other parts of the world, especially the Far East. Avocados were once rare in China, but their popularity is rising, putting additional strain on global supply.
While growers in Mexico, New Zealand, South Africa, Peru, and Chile are adding acreage at a furious rate, it still takes 20 years for young trees to mature and bear marketable fruit.
At the same time, America is becoming more diverse with a growing Hispanic population that’s especially keen on avocados. In other words, demand isn’t going away anytime soon.
Bad weather can be devastating for avocado growers
Avocados are a famously thirsty crop requiring about 50 gallons of water per 8 oz. fruit. So excessive heat and drought have a substantial negative effect on the number of avocados that orchards can produce. In 2019, the dry, hot weather in California throttled the state’s summer crop, a time when Mexican avocados are less available seasonally. The result? Prices jumped 129% to about $2.10 per avocado1
And don’t forget hurricanes. Michoacán, which represents 82% of Mexican avocado production, is subject to this type of weather event, and was hit by Hurricane Patricia in 2015, disrupting harvest.3
‘Tis the season for avocados…or not?
Before the U.S. lifted the import ban on Mexican avocados, Americans depended on crops from California and Florida, which harvest in the summer. So if you wanted avocado at Christmas, you were out of luck
Now, with fruit from Mexico, Peru and Chile available from October to May, you can serve avocado year-round. That is, unless one of these regions is hit by a misfortune like a drought or labor unrest while the other regions are out of production. And when the supply is disrupted, prices can soar.
Labor strikes and other hazards of the trade
From tree to table, most avocados travel long distances by truck, ship, rail or all of the above. Keeping this supply chain running takes a lot of labor, and labor sometimes has a mind of its own. Strikes by orchard workers and dock workers aboard never make avocados cheaper.
Beyond these four main factors, there are other wildcards as well. Farmers can simply leave their avocados on the trees if they feel prices are too low. Another example: Avocado prices spiked 44% in one week in the spring of 2019 after former President Trump threatened to close the U.S.-Mexican border.4
What you can do to mitigate high avocado prices
In the face of these challenges, many operators have discovered the virtues of Simplot Harvest Fresh™ Avocados prepared avocado products.
- Consistent pricing. Our consistent, year-round pricing eliminates the peaks and valleys of the whole avocado market, making planning and forecasting far easier.
- Consistent quality, no preservatives. This is 100% Hass avocado that’s High Pressure Processed (HPP) for food safety without preservatives.
- Less labor and zero waste. We do all of the peeling and pitting. You get only 100% edible product so that you can redirect your labor dollars to more important tasks.
Simplot offers a broad line of all-natural, prepared avocado products to meet different operational needs:
Pulp: This is literally fresh avocado minus the pit and peel, nothing more—a great head start on your own guacamole, sauces, toppings and dip recipes. Available fresh chilled or frozen.
Guacamole: Three popular recipes made with fresh avocado, vegetables and seasoning, ready to serve. Available fresh chilled or frozen.
Cut Fruit: Our slices and dices are popular toppings for salads, burgers, pizza and more. You’ll love our avocado halves as a base for your own chunky guacamole, slices or dices. Available fresh chilled or frozen.
If you’re a fan of predictability, go with prepared avocado
Americans love avocado and aren’t shy about paying for it when dining out. This makes shortages—man-made or otherwise—all the more problematic for operators. You could take it off of your menu when prices are high, but that’s not going to make customers happy, or you could leave it on the menu and let it eat away at your bottom line during shortages. On the other hand, prepared avocado products give the consistent pricing and quality you need to keep customers coming back.
2 https://www.foodnavigator-usa.com/Article/2021/06/01/Avocado-consumptionclimbs- with-plenty-of-headroom-for-growth-ahead-says-Rabobank
3 https://www.freshplaza.com/article/2148154/mexican-avocado-crop-escapeshurricane- patricia/