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Unlike other commodities, the goal of the
avocado industry appears to be to blur the distinction
between U.S. and foreign-grown product
rather than to accentuate it. Under the new
federal marketing order, truly generic Hass avocados
—no matter where they are grown —
are eligible to participate in an expanded promotion
program.
Representing this change in thinking is Phil
Henry, a longtime representative of the California
avocado industry, who is now serving as
the first chairman of the newly-formed Chilean
Avocado Import Association. Henry is the current
industry representative for the decades-old,
California-based Henry Avocado firm. He has
represented the company started by his uncle
and its California avocados very well on numerous
industry organizations including the California
Avocado Commission, Fresh Produce &
Floral Council, and Western Growers Association.
But in his new position, Henry is now representing
the avocados that the firm imports
from Chile.
His chairmanship is a good representation
of the shift in thinking that has taken place in
the California avocado industry. In the 1980s
and 1990s, California growers were very concerned
about the potential for loss of
marketshare as they viewed the potential in
imports from Chile and Mexico. More than one
California Avocado Commission meeting was
devoted to the subject of stopping imports.
In fact, the battle to limit imports of Mexican
avocados to certain states and certain time
periods continues, but CAC representatives say
it is truly for phytosanitary reasons. And witnessing
the way they have embraced Chilean
production, it is difficult to argue that point.
The development of the Hass avocado
marketing order is the culmination in the shift
in thinking. Rather than fighting foreign competitors
for share of market, California avocado
growers have linked with those competitors to
offer year-round supply and to enlarge the market
to accommodate everyone.
This past summer, producers and importers
overwhelmingly approved the new Hass
Avocado Promotion and Research Order, which
means that eventually as much as $20 million
will be raised to promote avocados, at least onethird
more than what is now available. The
promotion plan was put together after discussions
with California producers, importers and
foreign producers, most notably Chile, New
Zealand and Mexico. The promotion order was
limited to Hass because that represents about
90 percent of California’s production and virtually
all off the imports.
Soon after the order was passed, Tom
Bellamore, senior vice president of the California
Avocado Commission, said that approximately
600 million pounds of Hass avocados
are sold in the United States each year. And he
added that increased production from around
the globe means that in the not-so-distant future,
consumption has to be increased to about
one billion pounds per year in the United States.
At that same time, the CAC formally welcomed
the new promotion in this statement
from Jerome Stehly, chairman of the California
Avocado Commission: “This is a landmark day
for the California avocado industry and all Hass
producers selling in the U.S. marketplace. Our
industry should be praised for providing the vision
and leadership to make this event possible.
It took a huge commitment and everyone will
benefit in the long run.”
Another positive comment came from Avi
Crane, vice president of the international division
of Calavo, California’s leading avocado cooperative,
said: “This is a tremendous milestone
in the development of the domestic market for
Hass avocados. This event is equal in importance
to the formation of the California Avocado
Commission in 1977...Now the funds available
to educate consumers on the incredible Hass
avocado will increase substantially.”
The passage of the marketing order was
one thing, getting it up and running was another.
Henry explained that under the rules of
the order, each area of production is allowed
to form its own board to determine how its
funds are spent. As such, the Chilean Avocado
Import Association was formed earlier this year
with Henry as its chairman. The group will receive
a budget equal to 85 percent of what is
collected from Chilean imports. The other 15
percent is used for administrative purposes.
With an assessment rate of 62.5 cents per carton
and a projected eight million cartons of
Chilean avocados expected to be imported to
the United States, Henry said the board should
have a promotion budget of at least $4 million.
In late March, the group was getting back
together to finalize its promotion plans for the
2003-2004 season. In general, Chilean avocados
start to hit the U.S. market in September
and last until the end of March. California avocados
start in January and typically last into
October. Henry said that as such there are some
times, such as the all important Super Bowl
weekend, when avocados from both regions
are available to retailers and consumers. California
avocados however, are the only game in
town for late spring and summer promotions
such as Cinco de Mayo, and Chilean avocados
enjoy the market to themselves for the Thanksgiving
and Christmas holiday seasons.
Companies such as Henry Avocado attempt
to offer its customers a consistent supply
of high quality avocados 12-months of the year
with no distinction between production areas.
“Its our job to give our customers top quality
avocados every day of the year. They shouldn’t
know the difference.”
Henry insists that other than taste preferences
at different times of the season, there is
no difference between a Chilean and California
Hass. He explained that early in the season, oil
content in an avocado is on the low side,
whereas late in the season the oil content increases.
Consequently, in January when Chilean
avocados are in the peak of their season,
their oil content would be higher than in the
new crop of California avocados. Conversely,
in September when the California crop is winding
down, its oil content is going to be higher
than the new crop of Chilean avocados. “Some
people like avocados with a high oil content
and some like them with a low oil content. So
personal preference will determine which avocado
you like better, but it we are doing our
job (as packers and distributors) there is not
going to be any quality difference.”
And there will also be a seamless transition
in the promotion of the avocados. Under
the rules of the new marketing order, the California
Avocado Commission will manage the
new federal marketing order. And Henry said
the Chilean Avocado Importers Association has
agreed to contract the commission for promotion
and merchandising help. Consequently the
promotion and advertising efforts that begin in
September will dovetail perfectly with the efforts
of the commission the rest of the year.
“We are looking to continue the target
marketing approach of the commission, with
our emphasis mainly in the West. We will be
offering 40 second radio spots with 20-second
retailer tags,” he said.
Henry said the commercials will stress the
Hass variety not the origin of production. Country-
of-origin is a controversial subject in the produce
industry as the new law calling for voluntary
retailer compliance gets implemented
around the country. For avocados, Henry believes
it is an insignificant event. He said virtually
all producers sticker their fruit with a PLU
number so it will be very easy to put country of
origin on that sticker. Concerning the Chilean
fruit that Henry currently distributes, he said:
“I’m not even sure if we have ‘Chile’ on the sticker
or not. I’d have to take a look at it. That should
tell you how important I think it is.”
Henry opined that when fresh produce
was first being stickered what was on the label
probably made an impact on consumers. But
now he said everything has stickers so he
doesn’t think the consumer pays much attention.
For avocados, he believes it is a moot point
and will not change buying habits in any way.
Along with the advertising promotion program,
Henry said two other key components
will be the merchandising effort and public relations.
Merchandising by the already-established
CAC merchandising team is critical to the
success of the effort. Merchandisers will now
be making additional calls on retailers 12 months
of the year trying to keep the hard-earned display
space that they get during the peak of the
California season.
While the promotion of Chilean avocados
will receive a great boost in September, it is not
an entirely new concept. In fact, Chilean producers
have been jointly promoting their avocados
on a voluntary basis for the past several
years. On a voluntary basis they have raised
about $1 million per year and have contracted
with the commission for promotional help. “But
with this program we are going to be able to
increase that program by 3.5 to 4 times,” Henry
said.
Of course, the proof will be in the pudding,
but avocado producers worldwide are
poised to prove that cooperation is a much
easier road to hoe than competition.
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