Green gold, as the avocado has been called lately. Avocado production has become an important engine of economic growth in Latin America. The region has dominated the world avocado market due to its favorable growing conditions and its origin in Mexico.
The Aztec country, Mexico is the largest producer, however, in recent years a significant increase in production in Colombia has ranked it as the world’s second largest producer, surpassing other major producers such as Indonesia, Dominican Republic and Peru. In this article, we will highlight the reasons and factors that have contributed to Colombia’s exponential growth in avocado production and its positioning in the world market.
Global Avocado Market Dominated by Latin America
The avocado generates a global market valued at more than $14 billion, and the market is forecast to grow at an incredible 7.2% annually from 2022 to 2030. This according to a study conducted by Grand View Research, Inc. The Latin American region leads the way in avocado production, with 75% of the world’s avocado-growing areas within its territory, mainly due to the fruit’s origin in Mexico. The country has an ideal climate, fertile soils and the necessary altitude to grow high quality avocados. The region’s agricultural practices also focus on sustainability, which contributes to the production of high quality fruit while preserving the environment.
As mentioned above, Mexico is the largest producer in this market, accounting for 45% of the world’s avocado production. However, Colombia is currently ranked as the world’s second largest producer.
Colombia’s Rise in Avocado Production
Thus, Colombia has registered explosive growth in avocado production. By 2021, Colombia produced around 970,000 tons of avocado, 218% more than in 2017. The Colombian agricultural sector has been favored by some sustainable policies developed by the government. As a result, Colombia produces high quality avocados that meet international standards. It is worth mentioning that there is still a lack of support for small producers and farming families, but it is a fact that the government sees the avocado as a diamond in the rough within the agricultural sector.
The increase in avocado production in Colombia has positioned it as a major player in the world market and the second largest producer in Latin America. Its favorable growing conditions and strategic positioning make it an ideal candidate to serve the Asia-Pacific market, which is expected to experience the fastest growth in the avocado market.
US Demand Drives the Upward Trend in Avocado Production
Moreover, the United States is the largest importer of avocados, with an estimated 46% of market revenues coming from Colombia. In the U.S., processed avocado products, such as chips and oil, have emerged, and this has contributed to the upward trend in avocado production. Young Americans are becoming increasingly health conscious, which has led to greater awareness of the nutritional value of avocados. So demand for avocados in the U.S. has increased considerably.
An interesting fact for example, the NFL Superbowl significantly impacts the avocado industry, as avocado consumption in the U.S. increases at this time of year. It is recorded that about 20% of annual avocado sales in the U.S. take place during the Superbowl weekend. This demonstrates the significant increase in avocado consumption in the US.
Colombia Positions Itself for the Asia-Pacific Market
Colombia has increased its avocado exports to Asia, positioning itself to serve this market well and compete with Mexico, the world’s largest producer. But what is the reason for this increase in production in Colombia? In addition to the favorable growing conditions, the increase in demand has increased significantly, as well as consumer preference for the quality of Colombian vs. Mexican avocados. Many consider Colombian avocados to be much softer and creamier compared to Mexican avocados.
Looking ahead, the most demanding market for avocados is expected to come from the Asia-Pacific region, and countries such as Colombia, which has expanded its avocado export facilities to Asia, will meet this demand with high production to compete with Mexico, the world leader.
With the global avocado market expected to grow at a rate of 7.2% per year by 2022-2030, there is plenty of room for new players to enter the market and for existing players to expand their operations.
In conclusion, Latin America is a dominant region in the avocado industry, with countries such as Colombia experiencing explosive production growth. Although Mexico remains the largest producer in this market, and is still ranked as the world leader, Colombia is rapidly catching up and has become the world’s second largest avocado producer.
Favorable agricultural conditions in the region, coupled with huge demand from the U.S. market, have been the main drivers of this growth. As the avocado market continues to expand globally, it will be interesting to see how countries like Colombia position themselves to take advantage of this trend and continue to compete with established players in the sector.