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Bloomberg Línea — Avocados from Mexico (AFM) is now a benchmark for avocados throughout the US. Despite what one might think, its CEO, Álvaro Luque, is Costa Rican, although his heart is Mexican, he admitted on Bloomberg Línea’s ‘Línea Latina’ podcast.
Luque worked for 15 years in the marketing area of Mexican corn flour and tortilla producer Maseca, a subsidiary of food giant Gruma, and which gave him the opportunity to pursue a career in both Venezuela and Mexico.
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With great emotion, he remembers Mexican business leader Don Roberto González Barrera, founder and chairman of Gruma’s board of directors, as well as lifetimepresident of Grupo Financiero Banorte. Luque recognizes that some of his decisions, and his departure to work in other countries, had to do with González, after listening to him and working alongside him.
“In times of chaos, you have to be aggressive when others are going to back down,” Don Barrera used to say, and that is something that has stayed with me,” Luque recalls.
Today, and for the past nine years, Luque has been part of AFM, the marketing subsidiary of the Mexican Association of Hass Avocado Importers (MHAIA) and the Association of Avocado Producers and Packers Exporters of Mexico (APEAM).
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Avocados from Mexico brings together more than 30,000 growers and 70 packers in Mexico, and has a 10-strong board of directors and 250 avocado importers in the US.
“Here in the US, it is important to know that all Latinos support each other, but we are different, we have to understand what the different products represent for each of them,” says Luque, emphasizing what he calls “green gold”, or avocados.
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Conquering the US market
In fiscal year 2019/20, Mexican avocados contributed US$6.5 billion in production or spending to the U.S. economy; contributing US$4 billion to U.S. GDP, according to a study by the Avocado Institute of Mexico.
However, it took almost a decade for that to happen. “At first I wondered how am I going to market a fruit, but then I understood what the Mexican government and the American government were doing, that they were projecting by law a product to develop here in the U.S., which I found very interesting,” he tells Línea Latina.
The company does not sell avocado and is not from Mexico, it is 100% marketing, which only strengthened the current market for the fruit.
However, one of the biggest accolades was Avocados from Mexico’s participation in the Super Bowl, during which the company has been advertising for eight years. In the week prior to the event, consumption of the fruit increases considerably on US tables. And it increases exponentially on the day of the game.
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“From the moment we started investing in the Super Bowl until now, there has been an 80% growth in sales. That space managed to put us on the map, to build the pillars of this brand,” Luque says.
“We set the goal of winning the Super Bowl and we did it. Nobody imagined that a fruit with no brand and no packaging would win the digital market. That is why the Mexican avocado will continue to be king.”
According to AFM, the average purchase in the US is three avocados per month and a per capita consumption of eight pounds, so there is still a very large market to conquer. “But Mexico’s dominance is strong because our product arrives within 48 hours of being harvested, due to the farms’ proximity,” Luque says.
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Regional competition
Although the Mexican state of Michoacán is the main source of avocados for the US market, the state of Jalisco also meets the US demand for avocados, especially in the summer when production drops a little in Michoacán, achieving a balance in the supply.
Luque points out that both Peru and Colombia have also increased their growth in avocado exports to the US, but that Mexico’s volume remains higher. “Even Jalisco’s numbers are bigger than Peru’s,” he says.
“Although they have been complicated years, because of Covid-19, for us it was good because of the amount of avocado being eaten at home,” he points out. “Post-Covid brought this inflationary wave and we had a very low season. We had a very very strong price growth last year, and this year at the beginning of the fiscal year that starts in July, we are going to be seeing the hangover from that price,” he says.
Although determining AFM’s market share is complicated, since it depends on the year and the moment, in general terms it is close to 89%, according to the company, which when it started out only accounted for 20%, since at that time people preferred California avocados, Luque explains.
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