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To make your next toast, salad, sandwich, wrap, or meal healthy, your favorite YouTube or Food Network cooking host will require you to add Ahuacatl, Nahuatl word for “testicle,” [1]. This green fruit is delicious, nutritious and has become an increasingly popular ingredient in every kitchen pantry. With a tearable crust resembling the complex character of the moon, and a butter-like mantle holding a rigid core, bears a yellow-green flesh which, mixed with a few other ingredients, allows Chipotle Mexican Grill (NYSE: CMG) to ask the same question again and again or the American Heart Association Journal to endorse it for daily consumption [2]. The fruit in the discussion is the Avocado. More specifically, the Haas Avocado

A mail carrier in his early days, Mr. Rudolph G. Hass, engraved his name with the California variety of Avocados on August 27, 1935, by acquiring Plant Patent 139. Mr. Hass claimed his invention by “The variety of avocado tree herein described characterized by its summer ripening, medium-sized fruits, of purple color having a leathery skin which is thin for a Guatemalian, and borne on long stamps, with a small tight seed and with creamy flesh of excellent color and nutty flavor, smooth with no fibre and butter like consistency” [3]. The document itself is interesting since it lists why the Haas Avocado is different from the other avocados, ranging from lack of internal rotting found in the Dutton and Spinks kind to oil content of the Colorado variety. Like the Cavendish banana, the Hass Avocado has established its sanctuary in every produce section and most American pallets. 

According to the USDA, “Per capita consumption of avocados has tripled since 2001 to 8 pounds per person in 2018,” with California the major domestic producer and Mexico the largest importer [4]. Mexico isn’t just the largest importer; it is the dominant importer, holding as much as 88.6% of the import share, with Peru coming second at 6.8% and the Dominican Republic at 2.6% [5(select Import- Volume by Country)]. Juxtapose that to the export volumes of avocados to South Korea, Japan, and Canada; a picture emerges where the polarized discrepancy between imports and exports can help at-home demand for avocados and rise in avocado consumption within America. For every avocado exported, approximately 90.58 avocados are imported based on the Average four annual market year totals for Fresh total Exports to Imports Volumes by Country.

Key legislation allowed Avocados to grow in sales. The North American Free Trade Agreement was enacted among the U.S, Canada, and Mexico in 1994. Contradicting its 1914 ban on avocado imports  “to protect against agricultural pests and diseases” [6],  NAFTA indirectly allowed the avocado market to flourish, evidenced by the continued reliance on imports of Avocados from Mexico. Compared to March 2020, Avocado imports in March 2021 from Mexico increased by 23.50%. The year-over-year increase for Fiscal Year 2018 was 16.73%, Fiscal Year 2019 was 8.01%, and Fiscal Year 2020 was 2.90% [7(select Import- Volume by Country)]. According to Mark Stevenson of the Associated Press in 1997, “While avocados are not mentioned in NAFTA’s voluminous text, the loosening of the ban is considered well within the spirit of the agreement that created the world’s largest tariff-free zone” [8]. It suffices to say that one commodity, Avocado, has benefited tremendously under the North American Free Trade Agreement.

The Mexican Avocado’s importance within the American Avocado Ecosystem cannot be neglected since data from the USDA Fruit and Tree Nuts Yearbook Tables suggests the significance of Avocado imports in maintaining the American demand. The following chart highlights the Year-over-year change in U.S. Avocado Production between 1980 and 2020, available from the Fruit and Tree Nuts Yearbook Tables.

Between 1994 and 2020, American Avocado production has sometimes failed to outperform its previous year’s tons in production. Additionally, between 1994 and 2019, American production of Avocados fell by 22.61%, with peak output coming back in 2005. Production in California, the leading producer of Avocados in the United States, decreased by 29.68% between 1994 and 2019, while in Florida, the second leading producer, it increased by 35.79%. On the surface, it looks like Florida is outpacing California. To interject some color – if you took one avocado and illustrated the 50 states against its surface, California would comprise as much as 80% of Avocado based on its production. Unlike Mexico, where conditions support year-round yield, the U.S. does not share the same benefit.

A closer inspection of California reveals the creation of the California Avocado Commission in 1978, whose mission is to “enhance the premium positioning of California avocados through advertising, promotion and public relations, and engages in related industry activities” [9]. Like the Fair Trade Certified status, the California Avocado symbolizes a similar marking providing it credible, tangible, and referencable to a particular domain. Turning the pages of a history book allows portraying a publicly-traded company crucial in creating the contemporary participant in a holistic light. From its humble beginning as the California Ahuacate Association in Hotel Alexandria, Los Angeles, on May 15, 1915, to transition into the California Avocado Exchange on January 24, 1924, and later the Calavo Growers of California in 1927 allowed for a simple focus- collective marketing [10]. It wasn’t until 2002, the agricultural marketing cooperative association transformed into a publicly traded entity on the NASDAQ Exchange. Ticker Symbol – CVGW. The California-based company has a Market Capitalization of $1.3 billion and employees 3,971 people. 

In their 2020 10-K, the company reports that their top ten customers accounted for 56% of consolidated net sales, with Kroger and Walmart recording 18% and 12% of net sales [11]. A review of the Investor Presentation presents a list of their other customers, including Safeway, Sprouts Farmers Market, Trader Joe’s, Costco, Target, Walgreens, Sysco, Chipotle, Starbucks Coffee, U.S. Foods, and the likes [12]. The company reports sales in three segments. Fresh Products segment sells Tomatoes, Papayas, California Hass Variety, Mexican, Colombian and Peruvian Avocados, whereas Calavo Foods and Renaissance Food Group produce Value Added products. For FY 2020, the company recorded net sales of $521.54 million in Fresh Avocado and $79.38 million in Prepared Avocado Products, representing a year-over-year decrease of 8.47% and 21.28%. Meanwhile, between FY 2019 and FY 2018, Fresh Avocado and Prepared Avocado Products increased 11.34% and 1.21%.

Between 2010 and 2020, net sales in Fresh Avocados have grown 80.58%. The following chart represents the year-over-year increase in Fresh Avocado sales between 2010 and 2020, where the company has only come short on three occasions: 2012, 2018, and 2020. The company averages a 7% year-over-year increase in Fresh Avocado sales between 2010 and 2020. The data used to create was retrieved from 10-K fillings between 2010 and 2020.

Unlike other fatty foods, one would be encouraged to munch on as many avocados as possible. They are a great source of nutrition and are delicious. An unintended consequence would be to get injured from one and then be made aware that they are part of this phenomenon called Avocado hand.

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In 2017, the U.S. Consumer Product Safety Commission released a meme to bring awareness to Avocado hand with captions like, “The second you don’t respect this you can injure yourself pretty badly. Don’t turn your regular hand into an avocado hand” [13]. 2019 provided further clarification with the American Journal of Emergency Medicine, publishing that the incidence of avocado-related knife injuries increased between 1998 and 2017 based on the National Electronic Injury Surveillance System. Women comprise 80.1% of injuries, most injuries occurring between April through July, and the non-dominant hand the likely site of injury [14]. 

While there is no harm in paying for the convenience of value-added avocado products like cut avocado or frozen avocado chunks, it should be worth sharing that doing it yourself can be one of the cost-effective ways. An advertising jingle imprinted in the minds of millions of Americans is the “Avocado’s From Mexico.” Avocados From Mexico is the marketing arm of the two organizations, the Mexican Hass Avocados Importers Association and the Association of Growers and Packers of Avocados From Mexico [15]. The related website shares a How-To Simulator that can teach Storing, Wash, Tell Ripeness, and Slice & Dice techniques.

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This resource-driven product, avocado, is present in multiple domains and participating in various facets. Where do Calvalo Growers fit in this mirage is an exciting position. In their 10-K for Fiscal Year ending 2016, the company stated that they handled approximately 16% of Mexican Avocados imported to the United States and 28% of the California crop [16]. While I could not find a current number from any of their recent 10-K, the data points from 2016 should indicate their engrained participation in the avocado market. Lastly, since their IPO in 2002, the company had outperformed the NASDAQ Composite until the recent pandemic induced market shock in March 2020.