Compared with a lot of products available in the UK, the avocado market is still fairly immature.
However, with consumption figures rising at a significant rate year-on-year, new sources are entering the fray all the time. As such, while South Africa continues to dominate the summer scene, some say this could change within a few short years.
For the moment, South Africa is still considered the principal player in the avocado game, particularly for the UK’s preferred Hass variety. It has forged solid links with all the major UK importers and packers, and, given the country’s highly regulated system of production, coupled with an invaluable level of support from SAAGA, the South African Avocado Growers’ Association, it is deemed a reliable source of all the main varieties during its extensive season: Hass (June to October), and the green varieties, Fuerte (April to August), Pinkerton (June to July) and Ryan (July to October).
However, these seasons overlap to differing extents with those of Spain, Chile, California, Peru, Kenya, and Mexico, which produces Hass year-round. And several key figures across the sector suggest a kind of fluidity of supply is likely to continue as different sources opt into or out of the picture.
According to industry consultant Ali Khas, an inconsistency in production renders the supply situation somewhat unstable, something that has been especially noticeable this year, he claims. “It has been a very strange year because of the bad weather in Spain,” says Khas. “They expected to finish earlier with lower volumes of fruit that was not good quality. South Africa and Peru were directed to come earlier to fulfil the gap and some parts of France even went to Mexico because volumes were short from Spain.”
In reality, Spain’s losses were not as disastrous as forecasts suggested but importers who switched allegiance to Mexico suffered, as did producers in South Africa who struggled to even cover the cost of packing during the months of June and July, he explains.
In addition to the financial losses, there were issues of quality control. “This year all the fruit has been coming in early, therefore there have been a lot of cosmetic problems. All in all it has been very difficult for the growers, while the consumers have all the supplies they need because the retailers have managed to fill any forecast gaps.”
However, Clive Bayston, commercial manager at Melrow Salads, expects Spain will continue to see strong competition from other contenders such as Israel, as a result of its changing weather patterns.
“From January to March, Spain and Israel are very much competing. Spain has had problems with low crops which has forced prices higher,” he says. “We could do with a big crop to get a lower price than we have had for the last two years.”
Meanwhile, California and Mexico are dependent largely on what is happening in the US market, says Derek Donkin, general manager at SAAGA. “The situation is affected by the growth in that market and the strength of the US dollar relative to the euro,” says Donkin. “We can’t control that and no-one knows what’s going to happen.”
Given the significant pace with which the market is evolving, to ensure the continued supply of good eating quality avocados, keeping apace with the latest developments is vital, says Sainsbury’s avocado buyer, Clancy McMahon. “We work with sources that have developed skills in production, packing and logistics management. Recent focus has concentrated on relationship building with new and established suppliers.”
While South Africa remains a key supplier for summer arrivals, McMahon says Peru, Spain, Chile and Israel are all well-developed and are consistently involved in the chain’s supply programme from Mack Multiples.
SAAGA’s Donkin believes that Peru will be making a concerted effort to elevate its contribution to the European supply calendar over the next few years. “Europe is their only market and they have a lot of new plantings,” he says.
Bayston agrees: “Peru is a relatively new source but they are proving to be good in terms of quality and could impinge on South Africa in the future,” he says. “We expect to see increased volumes from Peru. Conditions have improved greatly over the last four or five years. The growing conditions are very conducive to producing quality yields. It’s very dry: the trees are almost grown in sand. The infrastructure is on the up, and we are seeing increased exports from Peru across the board.”
Donkin agrees that development in Peru is now significantly more dynamic than that of South Africa. “In South Africa it is still a growing business but not on the same scale as Peru,” he says. “The older orchards are being renewed and there is a shift in cultivation towards Hass from Fuerte and some areas that used to be other crops have now been replanted to grow avocados.
“But we have seen a trend in the last three years or so that growth is slowing down because there is no vast opportunity for increased penetration into the market so it doesn’t make sense to put in new plantings,” he adds. “The general outlook from the South African producers is fairly optimistic but realistic.”
In the short term, however, it is Chile that is likely to see more immediate growth in the UK market, Donkin claims. “The Chileans have identified that they need to develop their business in Europe as well as the US,” he says. “Chile has done some market research and has its eye on the UK.”
Meanwhile, the Israeli season runs from October to May, and according to Gabi Naamani, fruit division and avocado manager at Israeli exporter Agrexco, the country’s main exporters have established good relationships with the UK importers.
“In the last season we sent around 10,000 tonnes to the UK, which is around 50 per cent of the total volumes of avocado imported into the UK in this period. Total Israeli export was 55,000t, so 45,000t were diverted to the continent,” he says.
While France is still Europe’s top consumer of avocados, the UK continues show signs of potential growth and is a very attractive market for Israeli exporters.
“Demand is increasing and all the major chain-stores have a few lines on their shelves, and prices are quite good,” Naamani says.
He suggests the overall picture of acquisition in Europe, seems to be shifting, with some new countries showing promise for market development.
“We see significant growth in the UK and they are closing the gap, thanks to several years of promotion done by South Africa. It is not the same on the continent, although there is a nice increase in the Eastern Bloc,” he adds.
Bayston agrees the UK is currently more attractive to exporters than other parts of Europe, despite the potential price disincentive. “The European market has been overloaded with volumes of South African and Peruvian fruit and has only just recovered,” he says. “The UK is seen as being a very stable market and doesn’t have the vagaries on the wholesale market that the rest of Europe has. We may not be the right price for them all the time but they are seeing the benefits and taking the highs with the lows.”
McMahon says one producing country making significant strides forward is Kenya. “Logistics in Kenya have now improved to allow for adequate export conditions and the avocado industry has been rapidly expanding to become a mainstream global supply source.”
However, while Khas agrees Kenya is becoming a strong contender in the global market he does not consider them a viable prospect for the UK since they only produce a small amount of Hass, and their main crop, Fuerte, is often quite wind-scarred in appearance. As such, at the moment, it is only absorbed by the wholesale market for caterers in any substantial volumes, he claims.
Naamani agrees it will be some time before Kenya is recognised as a principal supplier, especially as far as the UK is concerned.
“Most of their crop is grown in very small orchards - sometimes just two to three trees in a yard - and they have no growing practices, so the UK multiples are not a target for them.”
And this is likely to continue, he says. “As far as I know there is only one farm that is really developing. The small operators will continue to be small, as it is really just a side business for them and they have no money to invest. But, it might happen in a few year’s time that foreign investors will start to develop new plantations.”
However, even with the best practices possible, the sailing time to England remains too long to make Kenyan avocados a sufficiently reliable supply source to the multiples, he suggests.
Despite these fluctuations Khas does not expect to see any major shortages in the UK over the coming months. Fuerte from South Africa will be finishing early, but Pinkerton has come on early and is looking very good with a high oil content and Ryan has also come on early, so everything should be fine until the end of September when South Africa will finish and Chile will start, he says.
“Chile has not forecast any serious problems so far. But I think South Africa may have a problem trying to run green-skinned fruit until the end of the season. Ryan usually continues to mid-September but I think they will struggle to see that.” As a result, there may be a four to six-week period from September where supplies of green-skinned fruit may be tight.
However, despite this, UK consumers are predominantly concerned with Hass, so are unlikely to even register this possible blip in availability.
Khas says South African farmers have raised concern over the sizes of Hass coming through this year. “If you ask the farmers how the crop is doing they say the tonnage is slightly better than last year but the sizes are a lot bigger. There are some 18s or 20s but this year there are also a lot of 12s and 14s which you don’t usually see in South Africa. This means there are fewer fruits on the trees.”
According to Khas there is a real shortage of small fruit, which will not affect the UK market since the preference in this country is for 24s, 26s or 28s. However, the rest of Europe, especially Spain, prefer fruit as small as 30s or even 32s, which can be sold very cheaply, he says. The shortage of small fruit has surprised growers. “Last year all the packers had problems getting rid of the small fruit,” says Khas.
“This year there is not enough, which is down to high temperatures and high winds at the time of fruit setting last year. A lot of fruit was lost so there was less fruit per tree.”
With such vagaries on the cards, McMahon says it is vital to keep an eye on the changing supply scene and ensure category development and product understanding.
Bayston agrees. “We are always looking for new sources,” he says. “The avocado market is still a young market with a lot of room for development so it is important to keep up to date with where avocados are being produced to find the best available sources.”
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