Can Avocados From Mexico break another sales record?

Reports of an impending hass avocado oversupply and the realities of an increasingly competitive avocado category are no match for Alvaro Luque's confidence. The Avocados From Mexico president and CEO anticipates another record-breaking year for avocados from Mexico.

The Packer recently sat down with Luque to learn more about the brand's plan for success and its “big news” set to break later this week.

Editor's Note: The following has been edited for length and clarity.

The Packer: Avocados From Mexico is celebrating another record-breaking year for avocado sales, importing 2.48 billion pounds of avocados in fiscal 2023. How have AFM's strategic marketing campaigns driven demand, and why do you think these campaigns were successful?

Alvaro Luque: We've broken that record several times in the past 10 years of our history, but it's been a couple of years since we've done it. We're getting closer to 2.5 [billion pounds] and we're going to surpass that this year, so we're starting a new record year, which is very exciting.

Our biggest efforts last year were on the volume-drive side. We've been very successful because we are putting a lot of emphasis on what we call our three tentpoles in the U.S.

Obviously, the Super Bowl is so important for us. We had a great Super Bowl this year — the second-biggest Super Bowl ever in our history — and very good post-Super Bowl numbers as well.

What also worked very well for us was what we call "OND," or October, November, December. That is a tentpole we're trying to develop for the category. It's very important for us because it's the time when Mexico takes control of the market and we have, in that period of time, a lot of different activities one after the other — Hispanic Heritage Month, Thanksgiving, Halloween, Christmas, New Year's.

Sports also play a very important part of OND. Last year, for the first time, we did a soccer [campaign] for the World Cup, and we had a record-selling number of bins. It worked out very well for us.

And finally, we have Cinco [de Mayo], and Cinco was the highest record number ever for us in our history — actually 61% over last year — so it was amazing the amount of volume that we move through Cinco de Mayo.

We're also putting a lot of emphasis on health and wellness. This was the second year that we did the Susan G. Komen national promotion for October, which was super successful. The first year we did it only with Walmart. This past year we did it with Walmart and Kroger nationally, activating thousands of stores around the U.S. And we came back with the launch of a new health and wellness campaign for the category from March to June.

The other thing that was very successful was foodservice. This was a record year for us selling LTO [limited-time offer] promotions for foodservice. We did 37 LTOs in one year. We have never done so many promotions back-to-back, one after the other.

And those three components really help us move the market and get to that record number.

You mentioned that AFM saw an impressive 61% year-over-year increase in avocado volume during Cinco de Mayo this year — a time during which the U.S. imported more avocados than ever from Mexico. To what do you attribute this incredible spike, and do you see continued room for growth around this holiday?

Yes. Yes. Yes. I think the Super Bowl will always be the Super Bowl, right? So, we have to respect the king. But I think that Cinco de Mayo is going to be the biggest [avocado eating occasion] in the long term because Cinco is still underdeveloped in many ways.

The good thing about Cinco is that we're seeing traction on both sides of the spectrum. We're seeing very good traction with people that are going out to restaurants and with those enjoying Cinco at home. There's that foodservice and retail component working at the same time. The Super Bowl is not like that. Foodservice is not a big player for the Super Bowl for us, but for Cinco it is, and we have very high expectations for Cinco in the future.

We're working on a big strategy to be the No. 1 food for Cinco. If you think about Cinco in terms of beverages, Corona has a very important place there and there are other beers that are growing fast in the Cinco de Mayo arena. But on the food side, there's not a huge dominant player. So, I think that Cinco still has a lot of room to grow.

The Hass Avocado Board recently reported that global avocado supply is growing faster than global demand. How can the industry avoid or mitigate oversupply in the coming years?

Well, it's challenging. I've been with this organization for 10 years. In the past it was a rule that when you had a very high crop one year, you'd have a lower crop the following year. That is not the reality anymore. The budget we have this year is as high as the budget we had last year, and that was a record number. So, we're getting more supply. There are more avocados that we need to move. It's challenging because you need to increase velocity.

But there's room to grow. Our household penetration is still in the 60s [percent], so you still have a good percentage of homes that are not consuming. But if you look at the profile of those homes, it's hard to develop the category there because either they don't like avocados or avocados are price-prohibitive for them.

The opportunity is concentrating on the 65% of households that are already consuming, and increasing that velocity, which is not an easy task.

We're trying to be as effective and aggressive as possible on that side. We're doing more promotions in this coming year than ever before on the retail and foodservice side. The challenge that the Hass Avocado Board mentioned is not only in the U.S. It's global. But in the U.S., you still have a lot of room to grow. I feel very confident that we have a strong plan this year to make it work.

AFM is launching co-branded Avocados From Mexico and partners PLU stickers for bulk avocados to help shoppers more easily identify Mexican avocados. When will these hit shelves, and what do you hope to achieve with this initiative? Do you see this as an extension to your marketing efforts?

It is a very important one. The data tells us that if you want to have a good channel to build a brand, it's in-store. That's why our brand's merchandising is heavy on the brand side because not only are we trying to move fruit, but we're also trying to build the brand.

What's been a little difficult for us is to have such a robust plan throughout the year, but at the end of the day, the avocado you're taking home isn't branded. We've been very aggressive on developing packaging and a marketing program on bags, but we needed something on the fruit. Now that we are sharing the market with other origins, we want to be sure that the consumer knows which avocados are coming from Mexico. So, we are unveiling this sticker as we speak, and right now it's in the market.

You're going to see it increase more and more, but it won't be 100% of the avocados coming from Mexico because it's voluntary for the importer to participate. We have 100% of participation from the packers in Mexico, and we have some very important importers in the U.S. supporting the program.

The other thing that is important for us is multisensory marketing and color. We unveiled our trademarked brand color that we launched with Pantone last year. We call it "Avo Glow." We now have an official color that will be used on that sticker, so you're not only going to see the brand; you're also going to see our color. And that's how we're building this brand for the future.

Looking ahead to 2024, does AFM have new promotional campaigns, retail initiatives, etc. in the works that you can share?

This week we're unveiling our biggest news for the year. We're going to announce an American football partnership that no other brand has ever done, and that's going to be our anchor program for OND.

This is a big year for us. We're going for the record again, and we're going to make it happen.

Related: Avocados From Mexico helps retailers customize promotions