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Bagged avocados augment category's double-digit growth

Retailers have an opportunity for potential increased sales and distribution of the bagged avocado segment, according to a recently published report by the Hass Avocado Board.

While the majority of major grocery chains sell bagged avocados, traditional retailers, smaller chains and independents can increase category distribution by adding bags in their stores. According to the study, bagged avocados are a complementary driver to category growth in addition to bulk avocado sales.

"People buy bagged avocados for different purposes than bulk," Emiliano Escobedo, executive director of the Hass Avocado Board, said in a press release. "Bagged avocados don't compete with bulk because consumers see value in a bag for different usage occasions that require multiple avocados."

HAB's "Retail Sales Opportunity Analysis: Bagged Avocados" study indicates that bagged avocados' retail dollars grew 80 percent during the three-year analysis from 2010 to 2012. Bulk avocados' retail dollars grew 17 percent during the same period.

The faster growth rate of bagged avocados appears to be due, in part, to promotional usage and a faster distribution growth rate. However, bulk accounts for over 94 percent of total avocado category dollars.  

Over the three-year analysis, bagged avocados had a consistent sales ratio from quarter to quarter and were a key driver of the category's double-digit volume growth with a trend of 73%, outpacing bulk.

Much of the retail sales growth was driven by new distribution. Analysts project that if bagged avocado distribution continues to grow at its most recent rate of 15 percent, it could achieve 100 percent distribution by 2020.

In addition to store distribution growth, bagged avocados per store per week sales grew 13 percent in retail dollars from 2010 to 2012. This gain suggests that more shoppers are buying bagged avocados, especially the four-count bags, which grew 98 percent during the same period. Two- and six-count bags were also notable bag configurations, but accounted for only 24 percent of 2012 retail dollars.

"This study provides the industry with useful insights into the category," Mr. Escobedo added in the press release. "There is tremendous room for retail sales growth because bagged avocados accounted for only 35 percent of distribution in 2012. As bagged avocado distribution becomes more widespread, retailers need to focus on bagged avocados to complement bulk sales to help drive the overall category."

Many major grocery retailers sell bagged avocados; however, 65 percent of the nation is still available for potential distribution and sales among traditional retailers, small chains and independents, according to the study.