Avocados are a product with a steadily rising global demand, but because they are produced in so many different countries, they need to be of high quality and delivered quickly and safely in order to be competitive. Therefore, it is crucial for exporters to invest in logistics and optimize shipping routes for speed and efficiency.
Avocado exporters in Kenya have experienced severe disruptions to their transportation routes as a result of the ongoing conflict in the Middle East. In particular, the closure of the Suez Canal and issues in the Red Sea and Gulf of Aden have forced them to rely on longer and more expensive alternative routes. This has led to higher transportation costs for Kenya, compromising quality due to longer delivery times. As a result, Kenyan avocado exporters must optimize transportation logistics by collaborating with carriers to secure faster, more cost-effective routes and exploring alternative sea routes or local ports to minimize delays.
Peru's avocado market continues to grow annually, particularly in Europe, the U.S., and Asia, with 311.6 thousand tons exported to Europe, 66.1 thousand tons to the U.S., and 34.3 thousand tons to China. Although the country's strong market presence and high production volumes contribute to stability, logistical challenges persist. To address issues such as port congestion and rising freight costs, we must collaborate with shipping companies to invest in logistics improvements, explore alternative transportation routes to high-demand markets like the U.S., Europe, and Asia, and expand airfreight options to mitigate delays and rising costs, ensuring smooth transactions.
As the demand for avocados has expanded around the world, so has avocado production. Australia's avocado production for the 2023/24 season is said to have increased by 30% year-on-year to 150.9 thousand metric tons. The reason for this increase is, of course, higher domestic demand, but it is also due to expanding exports to new markets.
Australia's avocado market is relatively small, but the industry has been working hard to increase domestic demand and has succeeded, with total production rising by 13% in just one year and exports increasing by 63% year-over-year. Furthermore, the industry recently took its first step into the Chinese market by signing a memorandum of understanding between the Australian Avocado Association and the China Food Import and Export Chamber of Commerce. This agreement will enable the Australian avocado industry to boost production and exports further.
Similar to Australia, avocado exporters should actively seek partnerships with emerging markets like China and India. Meanwhile, Kenya, which has faced export challenges due to regional issues, will need to identify and collaborate with these markets to overcome its challenges and diversify its approach. The recent U.S. approval of fresh Hass avocado exports from Guatemala has not only opened new opportunities for Guatemalan producers but also allowed them to address high domestic demand. This development benefits not only exporters but also importing countries, enabling them to source avocados from more countries and offer a wider range of products to meet consumer demand.
As the avocado market has grown in recent years, both demand and supply have increased. Recently, the market has been flooded with Spanish avocado hybrid varieties, leading to a price drop due to competition from imports. In this competitive environment, each avocado company must develop a strong marketing strategy to increase brand awareness and survive in the market.
Australia, having recently entered the Chinese market, needs to strengthen its marketing and PR strategy to increase brand awareness and capitalize on new opportunities. To appeal to health-conscious Chinese consumers, they may need to collaborate with influencers to promote avocado diets on social media or run health-focused campaigns highlighting the nutritional benefits of avocados. If Australia develops a marketing strategy that caters to the needs of Chinese consumers, it can expect to secure additional agreements and achieve a successful entry into the Chinese avocado market.
The avocado market is one where trends change rapidly as it continues to grow. To stay updated on these changes and develop a successful business strategy, refer to our weekly reports.
For more insights, visit Tridge’s W45 2024: Avocado Weekly Update, including the pricing data and trends in the avocado market that change weekly.
