Avocados seem to be always be in high demand. Justin Sullivan/Getty Images
I've Always Wondered ...

Don’t avocado prices ever go down? 

Janet Nguyen Nov 11, 2022
Avocados seem to be always be in high demand. Justin Sullivan/Getty Images

This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Ever wondered if recycling is worth it? Or how store brands stack up against name brands? Check out more from the series here.

Listener Allan Parker asks: 

I have often wondered about the high price of avocados. I notice as they get older and ripen, the high price never changes! What happens to all the old soft and probably rotten avocados in the supermarkets? They never seem to reduce the prices. 

Avocados are generally pricey, ranging between $1 and $2 apiece and sometimes even north of that amount. 

In response to our listener’s question, one grocery store representative explained that the velvety, green fruit remains in demand throughout its lifespan, and that they’re used in different items as they get older. Lowes Foods’ category manager for produce, Kevin Thomerson, wrote the following via email: 

“In recent years with their popularity increasing, we have seen our volume go through the roof with avocados. With that being said, we have guests looking for avocados at different stages of ripening. Many are looking for ready to consume while others are looking for 2–3 days of shelf life remaining.”

And when those avocados are reaching the end of their “normal shelf life,” Thomerson explained, Lowes is able to use them in preparing in-store guacamole as part of its Pick & Prep service. Pick & Prep offers “grab-and-go fruits and veggies that are cut fresh throughout the day.”

High demand for avocados 

Ricky Volpe, an associate professor in the agribusiness department at California Polytechnic State University, said he’s also noticed that avocado prices don’t change very often due to their condition. 

“Avocados are a very, very high-value crop. Consumers have a really high demand for them. Demand is strong even when they’re imperfect,” he said. The online publication Insider, explaining why avocados are expensive, reported that harvesting the fruit takes a tremendous amount of water and labor and requires “costly distribution methods.” 

Volpe echoed Thomerson’s observation at Lowes, saying some consumers “specifically seek out very ripe avocados.” Maybe they buy them the day they’re hosting a party, maybe they’re making guacamole. 

“So it’s not even necessarily clear to what extent the demand for avocados dips when they become quite ripe. And in fact, the only real motivation to cut prices would be when they start becoming overripe and shriveled and visibly damaged,” Volpe said. “But that’s a really, really short time frame.”

And cutting prices within that short time frame would be a logistical headache for grocery stores.

“When prices change in a supermarket, then prices need to change across all platforms,” he said. This means they have to change in the store, in digital advertising, on the website and in the app. 

“That’s actually quite the undertaking,” Volpe said.

He pointed out that as a result, food prices in general are becoming “stickier,” or more rigid, as retail moves into the digital space.

The rise of pre-made guacamole 

Volpe said that one way the food retail sector adapted during the COVID-19 pandemic was by offering a wider array of ready-to-eat and ready-to-heat options. 

That’s because people who weren’t used to or interested in cooking and learning recipes were “still looking for that away-from-home, sort of easy restaurant experience — even if it wasn’t available to them,” Volpe said. 

Hence, the increase in the availability of guacamole and avocado dips, he added. 

Whether you shop at a national chain or an independent market, he said, you’ll probably see those products from national brands. But you’ll also probably see dips from the store itself. 

“Odds are, those were actually made right there, in-shop, by the employees using avocados that were deemed unfit for sale or moving too slowly,” Volpe said. Just like at Lowes. 

Avocados aren’t the only fruit that has been granted an extended shelf life. 

“It’s turning apples into applesauce or using them to bake bread over in the bakery section,” Volpe said. “It’s happening with all these specialty crops as a way to sort of turn what historically has been a loss through unsold inventory into an additional source of revenue.”

Volpe has observed that this practice was less common three or four years ago. 

“I think that the juice is kind of literally worth the squeeze now,” he said. “I think [retailers] realized that using labor hours, using their employees to make these value-added products in store, package them, put them in the refrigerated section is worth it.” 

Sometimes certain fruits are discounted. Volpe said you might see two bins of virtually identical apples, with one priced at $1 a pound and the other $3 a pound. But he thinks that might not be because one set is going bad. 

“It’s that there’s another batch coming in on Tuesday, and they gotta move these,” he said. “When these commodities are in season, these new shipments are just gonna keep on coming. There’s no way to stop that train. And so it becomes time to cut the prices to move them quickly.”

But at the moment, avocados are getting cheaper 

While avocados are generally pretty expensive, the price has been on the decline recently. 

David Magana, senior fresh produce analyst with Rabo AgriFinance, told CNN Business that the wholesale price for a carton of 48 midsize avocados was recently under $30, declining 35% year over year. CNN also reported that the average unit price for avocados dropped 2.6% in September compared to a year earlier. 

It turns out that sometimes there is such a thing as too many avocados. 

Earlier this year, imports were banned from the Mexican state of Michoacán, while Texas implemented border inspections of commercial trucks carrying commodities from Mexico, leading to rising prices. But both actions were temporary. 

CNN Business explained that there have been bumper avocado crops around the world, with Mexican farmers producing a better harvest than expected. 

On top of that, demand has receded in Europe because of food inflation, China is dealing with pandemic shutdowns and the Russian invasion of Ukraine has blocked avocado shipments to Europe. 

That means the oversupply has headed to the U.S. So for now, enjoy your bargain avocado toast.

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