Report: Bagged avocados drive category growth

From The Packer | 17 October 2023

Overview of avocados in the U.S. market, complemented by charts from Agronometrics. Original published on October 13, 2023.

The Hass Avocado Board has released a study on the effect of bagged avocados on avocado category trends, shedding light on the remarkable shifts in the category’s retail landscape over the past four years.

“Bagged Avocado Sales Drivers” analyzes retail sales and household consumer data to ascertain sales trends and purchase behaviors driving bagged avocados’ growth and their impact on the industry. The study was based on Circana’s retail sales and household purchase data, and the insights aim to empower effective marketing strategies and messaging for bagged avocados, according to a news release.

When the pandemic began in 2020, on the heels of a strong avocado sales in 2019, the avocado category experienced a 21% spike in retail unit volume, accompanied by an 8% increase in retail dollars, according to the study. Following a strong bump during the pandemic, however, 2021 brought a 5% decline in unit volume while dollars were relatively flat.

The trend continued into 2022 when the industry was met with rising inflationary pressures and volume dipped an additional 8%. With rising inflation, the category saw higher prices, which fueled greater dollar sales for both bulk and bagged avocados, the release said.

avocado volumes by origi 2

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

The rise of bagged avocado sales is a key factor to understand those market dynamics, according to the study. Bagged avocados’ growth trajectory had been steady before 2020 but experienced a significant boost in both volume and dollar sales in 2020 and 2021. These results translated into a larger share of the overall avocado category sales over the period.

NEW PACKAGING ENTERS MARKET

As bagged avocados continued to capture industry attention, the avocado category experienced a surge in the distribution of established and new packaging options, according to the release. Small 4- and 5-count bags together accounted for over half of retail sales for bagged avocados. These sizes also saw a notable increase in distribution.

Meanwhile, the introduction of small 7-count bags made a substantial impact on sales growth, the release said. Distribution of small 7-count bags more than doubled and were available in nearly 5% of stores in 2022. This relatively new package size demonstrated remarkable performance, with a unit sales velocity that was 55% higher than the next top performer, according to the release.

TRACKING SHIFTS IN CONSUMER BEHAVIOR

The report also revealed changes in shopper purchase behaviors. While some shopper groups experienced declines in purchase behavior, the overall trend was positive.

In 2022, the number of moderate and heavy shoppers that purchased bags declined, as did trips per household within these segments. However, spend per trip increased for all shopper groups, according to the study.

“Ultra-shoppers” continued to purchase bagged avocados and were responsible for driving 64% of the growth in purchases. These trends emphasize the resilience of bagged avocados in the face of market fluctuations, according to the release. Bagged avocados not only offer convenience to consumers, but also represent a significant growth opportunity for retailers and marketers alike, the release said.

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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