Harvested Marketable Products: Fruits and Seed Oil
Uses: Fruits, Seed Oil is a Carrier Oil
Common Name: Avocado Hass (Abokado)
Binomial Name: Persea Americana
Minimum Borrowing Amount: Php 1,000,000.00 with 200 Trees
Lock-in Period: 10years
Annual Interest Rate: 18.00%
Income from Harvest: 40% on annual harvest starting on the 5th year.
The supply of avocados is increasing fast, but the European market can still take on higher volumes. The healthy nature and multiple uses of avocados result in strong consumer demand. France and Scandinavian countries are already very mature markets, while Germany and Italy still have room for growth. While consumption is still on the rise, supply peaks make profitable returns more unpredictable.
Avocado will be the second best-selling tropical fruit in the world in 2030
According to the OECD/FAO Agricultural Outlook 2021-2030, avocados are expected to become the second-most traded major tropical fruit by 2030, after bananas. Avocados will overtake the export volume of both pineapples and mangoes. In Europe, avocados have become the second-most valuable imported fruit from developing countries. The avocado import from developing countries was valued €1.8 billion in 2022. The expansion has been caused by =growing demand and major investments in global production.
The growth of avocados outperforms other major tropical fruits despite the lower production. Global production volume is expected to reach 12 million tonnes by 2030, 3 times more than a decade ago. Mexico is the world’s largest avocado-producing country, although its production has proven slow to increase. In the long-term, Mexican supplies may increase by 5.2% annually, mainly to fulfil the growing demand in the United States.
In Europe, Peru is the most dominant supplier, next to a dozen other ambitious countries. Production in Peru, Colombia, Kenya, Morocco and Tanzania showed double digit growth in recent years. Most of these exports are destined for the European market.
The United States and Europe will remain the largest importers in the future. According to OECD/FAO, these regions will be responsible for 40% and 31% of global imports in 2030. This is despite the growing trade with other regions, such as China and the Middle East. It will be important for growers and exporters to focus on specific regions where demand has room to grow. It is also a good idea to diversify and anticipate on markets becoming less concentrated.
Still room for growth in consumption
Avocados are appreciated because they are a unique and healthy product. Avocados contain oil and have many culinary applications. However, compared to North America, European consumption is still underdeveloped.
There are major differences in consumption between Europe and North America, as well as within Europe itself. This shows that there is still potential for growth in Europe. In 2020 and 2021, the average consumption in Europe was approximately 1.4 kg per capita. In the United States, this is approximately 4 kg and almost 3 kg in Canada. Mexico, the world’s largest avocado producer, consuming 6.5–7 kg per capita.
According to Cirad’s FruiTrop Magazine, the consumption of avocados in Europe has grown by 17% from 2019/20 to 2020/21. The recent growth in consumption between 2021/22 and 2022/23 has stagnated. Overall, price inflations for food have made consumers more conscious about their spendings. This may have influenced consumer purchases.
In large markets like France, Germany and the UK, the consumption rate remained the same in 2022. It declined in Scandinavian countries where avocado consumption per capita is already quite high. Inflation may have played a role here.In the next few years, more European markets will reach a higher level of maturity. There is potential for growth in Germany, Italy and Poland. The steepest growth will likely come from countries in Eastern Europe that have relatively small avocado markets.