Business

Canadians adore Mexican avocados, but prices are taking off

As Mexicans celebrate Cinco de Mayo today, the guacamole may not be flowing as freely as usual. The price of Mexican avocados has shot higher recently, and that could also be bad news for Canadians who are consuming more and more of the fleshy green fruit.

Growing demand from Canada is only part of a global trend — result: avocado inflation

The Mexican state of Michoacán is the centre of global avocado production. Canada imported 74,270,985 kilograms of Mexican avocados in 2016, according to Statistics Canada data. (Carlos Jasso/Reuters)

As Mexicans celebrate Cinco de Mayo today, the guacamole may not be flowing as freely as usual.

The price of Mexican avocados has shot higher recently, and that could be bad news for Canadians who are consuming more and more of the fleshy green fruit.

Data from Statistics Canada shows that Canadian avocado imports by volume increased by more than 255 per cent from 2006 to 2016, and more than 11 per cent from 2015 to 2016. More than 95 per cent of Canadian avocado imports last year came from Mexico, the global centre of the avocado industry.

The Mexican climate is perfect for growing avocados, explained avocado industry veteran Avi Crane.

A 10 kilogram box of avocados from Mexico's Michoacán state sold for 550 Mexican pesos (about $40) as of May 3. (CBC News)

"If you were an avocado, that's where you'd want to live," he quipped.

Like many commodities, the price of Mexican avocados fluctuates seasonally. This year, though, the price of Mexican avocados has hit a 19-year high, according to data compiled by Bloomberg.

A 10-kilogram box of avocados from Mexico's Michoacán state, the centre of the country's avocado business, sold for 550 Mexican pesos (about $40 Cdn) in Mexico City as of May 3.

Why pricier?

This is "a particular year" for the supply of Mexican avocados, said an industry representative.

Avocados are an "alternate bearing" tree, yielding bigger crops in one year and smaller crops the next year, said  Ramón Paz Vega, a strategic adviser with the Avocado Producers and Exporting Packers Association of Mexico, in an email.

This is a low-production year, Paz Vega wrote, and Mexican avocado trees naturally produce less during the season from April to June. At the same time, he wrote, global demand for avocados is increasing.

"An increasing demand facing a temporary reduction in supply is creating price tension and price increases," wrote Paz Vega.

Compounding the problem for avocado-importing countries like Canada, high domestic prices in Mexico mean local avocado farmers have more incentive to sell their crops domestically instead of exporting, said avocado analyst Avi Crane.

'Wild' demand in Canada

Canadians spent almost $254 million on avocados in the year leading up to April 1, according to data provided by Nielsen, an increase of nearly 17 per cent over the previous year.

Avocados for sale in Toronto on May 3, 2017, for $3.49 apiece, or two for $6. (Zoë Mager)

But Canada wasn't always a top destination for avocado exports, said avocado guru Crane.

"Canada, for many years, was an orphan for the U.S. market," he said. In fact, he added, U.S. avocado growers used to ship their less-desirable "No. 2" avocados to Canada.

Crane saw that change first-hand, he said, when he started a four-year stint working with a large Canadian fruit distributor in 2012.

"During that time, we saw avocado consumption in Canada just go wild," said Crane. "Sometimes we were exporting more to Canada on a weekly basis than to the U.S."

Learning to love avocados

In the past, Canadians mostly used avocados for conventional dishes like guacamole or salads, said Michael Bryanton, a certified research chef with Canada's Smartest Kitchen, a division of Holland College in Charlottetown, PEI.

Now, said Bryanton, "people are stuffing them, they're baking them, they're making cold and hot soups from them."

"It's got its own flavour, but it's neutral enough where you can use it in applications and mask the flavour if you need to," he said.

As Canada's avocado supply chain has matured, Bryanton said, Canadian chefs have learned to rely on a consistent supply of quality avocados.

The price of Mexican avocados has hit a 19-year high, according to data from Bloomberg. (Nick Wagner/Associated Press)

Canadian consumers have also come to expect a certain calibre of avocado, according to one major food retailer.

Dan Branson, senior director of produce, floral, and garden with Loblaws, has seen the Canadian clamour for avocados grow in recent years. Ten years ago, Branson said, Canadians couldn't depend on finding a ripe avocado in stores. (Avocados only ripen after they come off the tree.)

Now, the global avocado supply chain has improved to the point where Loblaws is able to consistently offer ripe or nearly ripe avocados for sale, Branson said.

"As soon as you moved into that sort of a convenience area, you started growing the size of the market, because people that might normally turn away from an avocado were now buying it because it was ready to use."

Loblaws has taken the logic of "ripe and ready" avocados a step further, said Branson. The company now offers President's Choice frozen avocado, ready to be thawed out and eaten. Freezing avocados, Branson pointed out, also allows Loblaws to freeze costs and reduce price volatility.

Marketing Mexican avocados

Canadian hunger for avocados didn't simply grow on trees. Canada and the U.S. are both targets of a sophisticated marketing push for Mexican avocados.

The "Avocados from Mexico" campaign is a joint project of the Mexican Hass Avocados Importers Association, a U.S. group, and the Association of Growers and Packers of Avocados from Mexico.

Avocados from Mexico made a big splash in 2015 with a TV commercial in that year's Super Bowl broadcast, and continued with more commercials for the 2016 and 2017 Super Bowls.

Here in Canada, the Avocados from Mexico campaign maintains a country-specific social media presence on Facebook, Instagram, Twitter, and YouTube, as well as websites in English and French.

The U.S. and Canada aren't the only countries demanding Mexican avocados. Japan is already a well-developed market for Mexican avocados, said avocado expert Crane, and the Chinese market is starting to develop an appetite for the fruit.

"So that is also siphoning off some avocados from Mexico," said Crane. "And of course, if you're trying to develop a market … and you have a short crop, you don't want to short your new market you're trying to develop, because it'll die on the vine."

About the Author

Solomon Israel is a producer and writer for CBC News, based in Toronto. He's been on the business news beat since 2011, with stints covering technology, world, and local news. More recently, Solomon has been covering issues related to marijuana legalization. He can be reached at solomon.israel@cbc.ca, or on Twitter: @sol_israel.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.