Consumption of avocados in the United States has increased from 2 pounds per person to 5 pounds in seven years, accompanied by a vigorous promotional campaign.
Economists at the University of California’s Giannini Foundation have studied the increase in both consumption and the dollars avocado growers invested in promotional activity during the same period. They report some convincing data that vigorous promotion pays off by boosting sales volumes and increasing returns to growers as well.
The upward movement in volume and returns is even more impressive because in the period under study the import of avocados from Mexico increased significantly. By 2012 avocado imports from Mexico had reached 933.8 million pounds, 58 percent of the total U. S supply of 1.6 billion pounds. The longstanding promotional program for avocados was expanded to accommodate the added volume, with funds relegated to the Hass Avocado Board (HAB). The industries in Mexico, Chile and Peru contribute to the promotional fund.
Growers pooling their funds to promote the sale and use of their products is a standard practice in California. Notable attention has been focused on some of the more popular promotions: the dairy industry’s “Got Milk?” and earlier campaigns, the colorful grower-supported efforts of the California Table Grape Commission, the California Strawberry Commission and the Leafy Greens Marketing Order, and don’t forget the Kiwi Commission.
Grower-sponsored advertising and promotion campaigns are ongoing in the almond and walnut industries, and with pistachios, figs, cut flowers, citrus, prunes and more. Unique state and sometimes federal statutes not only make it possible to collect the funds growers assess themselves, but put teeth into the collection process. Of course, spending is tightly monitored.
The Giannini study was undertaken by Professor Emeritus Hoy Carman, project economist Tina Saitone and Professor and Chairman of the Agriculture and Resource Economics Department at UC Davis Richard Sexton.
Their study of the marketing experience of Hass avocados was pertinent because of traditional volatility of sales. Although the report made no mention of it, a devastating fire occurred in the San Diego County production area during the study period, damaging large volumes of avocado trees and dramatically reducing the volume of fruit sent to market over a two year period or more.
One of the charts featured in the report shows the ever-increasing consumption of avocados rising steadily from 1994, with prices to producers dipping in years of heavy production. On the other hand, low production in 2009 and 2011 resulted in a spike in the price growers received.
In addition to the substantial avocado imports from Mexico, the total volume of avocados offered to consumers in the United States also includes those from Chile and Peru.
All three countries participate to some degree in the promotional activities that have grown out of the initial financial commitment by growers in the U.S.
Proposed expansion of the promotional program to include the designation of funds to the HAB required an increase in the amount avocado growers contributed from 2.5 to 3 cents per pound of fruit produced. The University of California study indicates that the average annual price increase resulting from the additional promotional stimulation has been 12.3 percent.
The authors of the study wrap up their report on the study by saying: “We conclude with considerable confidence that the promotion programs conducted under the HAB’s auspices have been successful in both expanding demand for fresh avocados in the U.S. and yielding a very favorable return to those funding the program.”
The only way to make that conclusion tastier might just be to dip it in a saucy guacamole.
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