How is the Avocado Shortage Affecting the Restaurant Market?Paul Iuga
Here’s what’s behind the sharp rise in avocado prices and how it’s affecting restaurants.
Avocados are packed with potassium, monounsaturated oil, B vitamins, folate, and more. Plus, they’re a key ingredient in guacamole, so it’s hardly surprising that demand for avocados has increased over the years. In 2000, 2.21 pounds of avocados were consumed per capita, and avocado consumption reached 7.81 pounds by just 2019. In 2020, the US produced a whopping 206,610 tons of avocados.
However, the avocado market in 2022 hasn’t been as smooth. In fact, there’s an avocado shortage, and prices are on the rise. In May, avocado prices spiked 19% compared to April, and prices were 30% higher this July vs. last July.
Where do avocados come from?
To understand the avocado shortage, we first need to look at their origins.
While avocado trees can grow in areas with 40% humidity, they do best in climates with 60% – 80% humidity. They also prefer to live in regions that are 50°F or warmer at all times. Due to these requirements, only a few places in the US are suitable for avocado trees.
Warm and sunny California is the main producer of avocados in the country. In fact, the Golden State is responsible for around 90% of all avocado production in the US, while Florida and Hawaii trail at a distant second and third.
With $3.5 billion of avocado imports, it’s clear that the US has relied on other countries for avocados in recent months. Between July 2021 and June 2022, US avocado imports soared by 41%. Mainly, the US depends on central and northern South American countries, as avocado trees are native to this region.
All about avocado seasonality
However, avocados peak at different times, depending on where they’re growing. For example, the peak avocado growing season in the US is from April to September, whereas Chile supplies the US with plenty of avocados between October and March.
Mexico generally produces lower volumes of avocados in the summer, and the peak avocado season is between January and March. However, Jalisco avocados peak between August and December, and the Dominican Republic usually has medium-sized avocados ready in November.
Additionally, different varieties of avocados mature at different times. For instance, Hass avocados will develop a black rind and be ready for picking between late winter and fall, while Bacon avocados will have green skin and be ready for harvest between November and March.
It’s also worth noting that, despite Jalisco’s, the Dominican Republic’s, and Chile’s peak avocado seasons, avocados aren’t usually in high demand in the fall. In fact, the fall is generally the slowest avocado consumption period. In the last two years, avocado sales have been 10%-15% lower in September, October, and November compared to sales volumes in June, July, and August.
Why do avocados take so long to ripen?
While most fruits ripen on the tree before harvest (think cherries, lemons, pomegranates, and grapes), avocados are different. Avocados don’t ripen until after they’re picked from the tree, and it’s ultimately the softening oils inside them that cause them to become ripe. There are plenty of avocados on the market, but timing the harvest is essential for all of them.
The longer an avocado stays attached to its tree, the more oil it will contain. However, there’s always the danger of letting an avocado remain on the tree for too long. This will result in high oil content, and the avocado may ripen during transport before it even reaches retailers and consumers. It will also likely develop a pasty texture or a rancid flavor.
On the other hand, prematurely picked avocados may not have the minimum oil content required to ripen. They may ripen very slowly or never ripen at all! They also generally have a poor flavor and a rubbery texture, whereas those picked at the proper time are tender and packed with oil and flavor.
How has the avocado shortage impacted the restaurant industry?
For restaurants that serve avocado sushi rolls, avocado toast, chips and guacamole, smoothies, or any other avocado-based items, the avocado shortage has meant raising prices, absorbing the increased cost of avocados, or finding substitute ingredients. For example, fava beans, blended green peas, or cooked and mashed calabacitas might be suitable stand-ins for avocado.
Others are swapping guacamole for hummus or pesto to lower costs without completely changing the menu. Some restaurants have opted to remove avocado from the menu altogether as the last resort.
What’s behind the avocado shortage of 2022?
So, what’s causing the avocado shortage of 2022 and the rising prices?
For one, the supply chain is still chaotic in the wake of COVID-19. Getting avocados to the US isn’t as easy, fast, or cheap as it used to be. Ports are congested, and the shortage of truck drivers in the US is making things even more complicated.
On top of that, climate change has caused increasingly severe weather, from storms to droughts. What’s more, inflation is running rampant in the US, Mexico, Colombia, and Peru. Plus, the Russia-Ukraine war has impacted the fertilizer supply.
However, the situation is a little different for each country. Here’s what’s happening in:
Supply chain disruptions and increasing fertilizer costs have led to a 19% spike in avocado prices, putting avocados as the #1 driver of inflation in Mexico and contributing to Mexico’s high inflation rate. Since Mexico buys around 30% of its fertilizer from Russia, the Russia-Ukraine war has had a large impact on Mexico’s avocado business.
Additionally, recent weather has been unkind to the avocado crop. A violent hailstorm caused avocado losses in Michoacán, the Mexican state responsible for producing most of the country’s avocados, while a drought affecting much of Mexico has also negatively impacted avocado production.
Avocados from Michoacán have reached 1,000 pesos, or $51, for a 9-kilogram box. Not only does this mean a jump of 140%, but it also marks the highest cost of avocados since 1998. In the first quarter of 2022, the US only imported 558 million pounds of avocados from Mexico, a significant drop from the 747 million pounds of avocados imported during the same period last year. It’s also worth noting that a verbal threat against a Department of Agriculture employee caused the US to suspend avocado imports from Mexico temporarily.
Since Colombia imports 22% of its fertilizer from Russia, the Russia-Ukraine war has led to more challenges than usual. The good news is that Colombia managed to increase its avocado exports in the 2021-2022 season by 270% compared to the previous year.
Additionally, the country has drastically grown its volume of Hass avocados. Total shipments for the 2021-2022 season were up 58%, resulting in the largest shipment totals ever. All in all, Colombia shipped over 24 million pounds of avocados.
The lack of fertilizers is also affecting Peru. In fact, nearly half of Peru’s Hass avocado hectares are at risk because of the fertilizer shortage. Small farms own 23,000 hectares of avocados in Peru, and they’re being hit the hardest by the shortage of fertilizers.
Hass avocado exports have grown by 15% annually in the last seven years. However, they are expected to grow by just 5% in 2022 due to logistic issues and the fertilizer shortage caused by the Russia-Ukraine war.
However, like Colombia, Peru increased its avocado exports to the US. In fact, Peru exported nearly 350 million pounds of avocados this year. That’s a massive 48% increase compared to their 2021 exports, which may be enough to help the US avoid an avocado deficit in 2022.
What’s next in the avocado market?
While the avocado industry has struggled a little in recent months, the future looks bright.
The USDA approved the state of Jalisco to export avocados to the US in 2021, making it the only state besides Michoacán allowed to export avocados to the US. Avocado suppliers like Calavo, which have worked with growers in Michoacán for years, can now expand their avocado programs by partnering with growers in Jalisco.
This will enable them to provide the US with even more avocados throughout the year and help lower avocado prices — or, at least, slow their meteoric rise.
Colombia is also growing its avocado acreage and production. The country already has almost 300 certified orchards approved to grow avocados for the US, and 400 are currently awaiting certification, meaning Colombian avocados could easily double in volume in the coming year.
Similarly, the Peruvian Avocado Commission plans to increase avocado exports to the US in 2023. They hope to export 500 million pounds of avocados to the US and boost the supply of avocados available in US stores and restaurants between June and September.
Take on the avocado shortage of 2022 with DineMarket’s help
The avocado issues of 2022 have resulted in a shortage and extremely high prices that have left restaurants scrambling to adjust their menus or raise prices. Navigating the avocado shortage hasn’t been easy, but DineMarket can help.
Not only does DineMarket have plenty of suppliers, but we can also help you keep food costs as low as possible — even amid the avocado shortage. You can easily compare prices and then order everything you need from our website. Learn more about what DineMarket can offer your business.