The avocado market has seen a global surge in demand over the past few years. Mexico has exported greater volumes of avocados to China in the past year than any other country. Avocados are eaten in their raw form but they are also processed and consumed in other forms. Avocado extract obtained from the fruit of the avocado can be used in oil, powder or pureed form. In whichever form it is used, avocado has many health benefits as it contains several essential minerals.
Many food, cosmetic and supplement products are made from avocado extract and there is a big market for these products world-wide.
Fact.MR has compiled a study on the avocado extract market and published a report titled, “Avocado Extract Market Forecast, Trend Analysis & Competition Tracking – Global Market Insights 2018 to 2027.” This report covers market drivers that influence the growth of the avocado extract market during the forecast period and it tracks the avocado extract market for the period. According to the report, the avocado extract market is projected to grow at 5.7% compound annual growth rate through to 2027.
Mexico is the world’s leading avocado producer and produces 35% to 45% of global supply. Other prominent producers include the Dominican Republic, Peru, Colombia and Indonesia. Demand for avocado has skyrocketed in the past five years which has created market volatility. Mexico exported a larger volume to China in 2018 than in the previous year. Between January and June of 2018, the country shipped 9 368 tons to China, which was 7.1% more than it had shipped during the whole of 2017. The demand in China has increased and the price for Mexican growers has remained stable at 24 to 32 Mexican Pesos (R17.36 to R23.14).
Peru exported US$175.2 million worth of avocados to the US. In 2018, there was an expected 8% drop, but for this year, the outlook looks good with growth of 21%.
In the second quarter of 2018, avocado prices in Europe fell dramatically, dropping to a third of the previous price within a year, according to the Spanish Ministry of Agriculture, Fisheries and Food. Despite the increased annual consumption, greater production in Peru and South Africa led to market saturation and a consequent fall in avocado prices in Europe.
In Australia prices remain high with exponentially rising demand. 2018 was a good year for the avocado industry and Avocados Australia and (grower owned) Hort Innovation are working towards boosting domestic production and expanding domestic and international markets. How prices will look in 2019 remains to be seen.
Avocado extracts market players
The Fact.MR report delivers insights on key avocado extract market players. Profiled players in the avocado extract market include Simpson Farms, Crofts Limited, AVOCARE, Olivado Ltd, Avocado Global Pte Ltd, Salud Food Group, Sunfresh, Avocado Oil De Mexico, Indigo Herbs, Markon, and others. Some highlights from the key players in the market include:
- In February 2018, the Costa Group announced the acquisition of Coastal Avocados farms in New South Wales. The acquisition was made in partnership with Macquarie Agricultural Funds Management who will own the farms while Costa will operate them. The acquisition is aimed at meeting Costa’s goal of 1000 hectares of avocados and a 52 week annual supply.
- In September 2018, Australia’s biggest avocado farm owner, Simpson Farms announced the sale of its farm business. The company’s annual revenues were in the region of nearly US$ 75 million through the sale of over 1.5 million avocados. The farm that produces these avocados is expected to be sold for between US$ 250 to US$300 million.
- In October 2018, Mexico avocado growers went on a 16-day strike to protest low field prices and other issues. Due to the strike, weekly shipments plummeted from 40 million in the week of 28 October to 4.8 million two weeks later. While 78% of the Hass avocados were shipped to the US. from Mexico in 2017, the shortage affected US restaurants forcing owners to remove avocados and guacamole from menus.
- Columbia became the member of the World Avocado Organisation (WAO) with member countries Mexico, Peru, the US, South Africa, Tanzania, Zimbabwe, Mozambique and Spain. With WAO membership, Columbia will increase supply to the European market.
Tier 3 players in the avocado extract market have significant penetration in domestic markets. Avocado extract products manufactured by these players are preferred across multiple applications, owing to end-user sentiment to buy locally produced avocado extract products such as oil, powder and puree. Olivado Ltd., Indigo Herbs, Markon and other players are categorised as Tier 3 companies whose focus remains differentiated food offerings. For Instance, Olivado Ltd. is a leading provider of extra virgin cold pressed avocado oil whereas Indigo Herbs delivers organic avocado powder. With their unique approach to market sustenance, Tier 3 players hold over half the volume share in the avocado extract market.
Avocado extract benefits
Avocado extract consists of trace elements, macro nutrients, fibre, abundant potassium and healthy mono-unsaturated fatty acids which are good for heart health. It is also believed that avocado extract is beneficial in treating cancer.
Avocado extract contains lots of vitamins and minerals which benefit overall health by providing nutrients to body organs. Following the current trend of consuming healthier food and beverages, end-users prefer products with health boosting ingredients like mono-unsaturated fatty acids which support heart functioning.
The health benefits such as immune system boosting, diabetes control and cardiovascular protection, reduced capital investment for product processing and increasing end user interest in avocado extract drive this market. The avocado extract market is limited mainly by limited availability of the raw product which must be supplied by importers.
This article is a summary produced from a report by Fact.MR. Fact.MR is a fast-growing market research firm that offers the most comprehensive suite of syndicated and customised market research reports. – Ntswaki Motaung, AgriOrbit