Native to the Americas, the avocado, also known as the alligator pear, is the fruit of the Persea americana tree, a member of the Lauraceae (laurel) family. Avocados are subtropical fruit, thriving in moist climates without frost and with little wind. That being said, the trees can survive on a variety of soils, ranging from red clay, sand volcanic loam, lateritic soils (those rich in iron and aluminum), and even limestone—what is most important is that the soil be free-draining, as water logging can be very harmful to the fruit. These specific conditions limit the potential areas of cultivation, and production is typically limited to the Iberian peninsula of Europe; several South American nations including Colombia, Peru, and Chile; the Caribbean; Central America, especially Mexico; parts of the United States; southeastern Asia including Indonesia and Vietnam; Africa, particularly Kenya and South Africa; and parts of Oceania. Each of these locations has a particular climate and soil profile conducive to the cultivation of different avocado varieties, of which there are hundreds.
One varietal, the Hass avocado, which was created by the American salesman-turned-farmer Rudolph Hass in 1926 and patented in 1935, transformed the global market by allowing for year-round yields and extended shelf lives. As much as 95 percent of Californian avocados are of the especially tasty Hass variety, which is also Mexico’s leading varietal.
While avocados have been enthusiastically consumed in Central America for millennia, the fruit’s significance in other parts of the world is a much more recent development. And in markets like the United States, their newfound significance is far from incidental—rather, it has largely been due to the deliberate marketing efforts by local growers’ organizations such as the Calavo Growers Association of California, Mayflower Fruit Association, Florida Lime and Avocado Administrative Committees, Florida Division of Marketing’s Bureau of Market Expansion and Promotion, and the Hass Avocado Board. The Hass Avocado Board has played a particularly instrumental role in developing the US consumer market and in transitioning the country away from an 83 year-long ban on Mexican avocado imports to become a major importer.
End of US import ban ignites Mexican exports
Although the presence of Mexican avocados in American shops is now extremely commonplace, that was not always the case. In 1914, the US instituted the first of its import bans against the fruit, due to the prevalence of seed weevil in Mexican orchards—which posed serious threats to US avocados. And although the intensity of that threat did not necessarily persist in subsequent decades, the ban did.
It was not until the 1990s that the legitimacy of the trade ban began to be seriously challenged, as talks between the governments of the US, Canada and Mexico inched closer toward establishing free trade across North America. However, California growers remained staunchly opposed to the free importation of Mexican avocados, concerned that the market would be flooded with cheaper supply and that the pathogenic threat posed by imported avocados still existed.
In July 1993, the United States Department of Agriculture (USDA) allowed for some imports of avocados into Alaska. Six months later, the North American Free Trade Agreement (NAFTA) was ratified—a step that served to energize and further legitimize Mexican growers’ fight for the repeal of the American avocado import bans. By 1997, the USDA lifted the ban for 19 additional states in the Northeast and Midwest, yet maintained the ban in several other states, including California. Despite the green-lighting of Mexican avocado imports for much of the US, California remained the nation’s top provider of the fruit, responsible for over 90 percent of domestic supply post-1997 through the mid-2000s. During this time, consumption and demand of avocados rose steadily.
Then, in 2007, the USDA sent an inspector from the Animal and Plant Health Inspection Service (APHIS), into the Michoacán region of Mexico, where the vast majority of Hass avocados are produced, to confirm the safety of the product for broad American import. The inspectors verified that there were no pests or pathogens present, and avocados from Michoacán were approved for import into all states, including California. The state of Michoacán alone produces 85 percent of Mexican avocados, which translates to roughly 26 percent of global supply. The USDA is now working with other Mexican states to establish quality control processes that will ultimately enable the American importation of the fruit from all over Mexico.
This development has helped spur a significant increase in area planted in the state of Jalisco, Mexico’s second largest producer, as growers in the state hope that they will soon be able to shift and/or diversify from supplying the domestic market and secondary export markets like Japan and Canada, to the United States.
And according to estimates from the USDA, this increase in area planted is ongoing—swelling by 11.4 percent in 2014/2015 in Jalisco State, and by 12.9 percent in Mexico State, the third-largest producer, in just one year. This translates to a total of 15,000 hectares in Jalisco for 2014/2015, and 7,500 in Mexico State, both still paltry figures when compared to Michoacán’s expected area of 127,000 hectares (an increase of 4 percent from last year). To help contextualize these numbers, it is useful to note that there are approximately 17,500 avocado farms in Mexico, with an average size of about 8.6 hectares.
And while the size of these farms may be relatively small, the size of their bills is far from it. The cost of avocado production is high—estimates suggest that for a Michoacán farm utilizing basic technology, the cost to cultivate one hectare is roughly $3,681, and for a farm using more advanced technology (machinery, irrigation), the cost is roughly $5,154 per hectare. Efficient water systems are particularly vital when it comes to growing avocados—as fruits native to subtropical regions, avocados require a significant amount of water for optimum growth—twice as much as citrus crops, for example. Some estimates peg avocados water requirement as high as 1150 liters per kilogram, meaning that two-tothree bathtubs-worth of water are needed to grow just a couple of avocados.
Plant biologists around the world are working towards creating more durable, resilient avocado varieties, while Mexican producers have implemented conservation techniques established through Mexico’s Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA).
The present ubiquity of avocados in the US is the result of deliberate marketing efforts on the part of growers’ groups. In the 1970s, per capita consumption of the fruit in the US was just 0.4 pounds per year (.18 kg), and groups like the California Avocado Commission (CAC), California’s main avocado board, realized that in order to stimulate production the fruit needed a strategic rebrand.
In the early and mid-twentieth century, avocados were more commonly referred to as “alligator pears” or “butter pears”, given their size and texture. Unfortunately, the latter name drove consumers to think of the fruit as an unhealthy fat, drawing parallels to actual dairy butter. The CAC thus began to broadcast the name “avocado” more rigorously to free the fruit of its buttery stereotype, and enlisted the help of dieticians and nutritional experts to market avocado’s high nutritional value (avocados are rich in essential (“good”) fats, protein, potassium, and fiber). And while these efforts were effective, they were slow: one 1990s survey showed that two-thirds of American consumers still did not buy avocados because they believed them to be unhealthy. Avocado marketers continued their campaign, and consumers are now finally beginning to celebrate the nutritional value of the fruit.
While this campaign was happening, another important phenomenon was unfolding: the rising popularity of Mexican and Tex-Mex cuisine. Avocado growers and marketers have been obvious beneficiaries of this growth, and in some cases, have helped encourage it—members of CAC, for example, even met with restaurant owners in the hopes of convincing owners that tableside guacamole would increase customer satisfaction and drive traffic.
A more recent example of strong marketing efforts occurred in this year’s Super Bowl XLIX, a high-profile televised American football championship with arguably the most expensive (and promising) advertisement outlet. Avocados from Mexico, a subsidiary of the Mexican Hass Avocado Importers Association (MHAIA), earned the honor of becoming the first fresh produce brand to advertise during a Super Bowl. The advertisement illustrated wheat as America’s ‘draft-pick’, and avocado as Mexico’s, a subtle dig at American avocado producers and a strong effort to brand Mexican avocados as the superior choice. Mexican growers believe the advertisement will help garner at least 70 percent of the US market, at worst a 3 percent increase in market share from last year. And it is clear to see why MHAIA committed—there are three specific days on which Americans consume at least 100 million pounds of avocado each year: Super Bowl Sunday, Cinco de Mayo, and the Fourth of July. That translates to one-sixth of annual consumption in a mere 72 hours.
In short, Americans have gone from consuming less than half a pound per person, per year, of avocados to (according to some estimates) 5.5 pounds (2.5 kg)—a nearly fourteen-fold increase.
The Mexican market
The 2007 policy reform, which opened the American market to Mexican avocados had obvious repercussions for the US market: between 2000 and 2006, roughly 45 percent of avocados consumed by Americans were imported, compared to 80 percent in 2007. Since then, the figure has consistently been between 60 and 80 percent, most recently topping 85 percent in 2014. But the reform also had a notable impact on the Mexican avocado market—particularly given the fact that not only is the country the world’s top producer of the fruit, it is also the world’s top consumer of it.
The avocado is arguably a staple of the Mexican diet and is found in a variety of cultural dishes and sides, particularly in guacamole. According to 2013 estimates, the average Mexican consumed 20 pounds (just over 9 kg) or more (according to some sources) of avocado each year. The strong local affinity of the crop means that at least half of production goes to domestic markets.
One marketer from Calavo Growers Inc. noted that Mexico’s domestic market effectively creates a price floor for avocados. However, this floor may be pricing out at least a portion of the domestic market, as evidence suggests that per capita avocado consumption may be falling in some households. This could be troubling for local consumers who depend on avocados, but there is increasing hope that revitalized production efforts in smaller-producing states will help keep local prices stable.
Liberalized trade and tactical marketing have allowed avocados to gain unprecedented traction in the American consumer market. Mexico has been at the forefront of this opportunity, though American producers continue to press onward and maintain existing volumes of domestic trade. Avocados can bear testament to the dynamics and impacts of free trade for governments and trade organizations, and they can also serve as a prime example for marketers and boards of other commodities and products.