Why Avocados Will Forever Be Expensive

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Avocados have become one of the world's most popular foods in the past two decades. Americans these days eat 9 pounds of avocados annually and that’s a huge leap compared to 2001, when the average American only ate 1 pound a year. As domestic consumption and global interest have soared, so have production and prices. Yet as prices have reached to all-time-highs, demand has not stopped. Whether it’s avocado toast or guacamole in a Chipotle bowl, consumers continue to pay the premium for this fruit in the name of taste and nutrition.

These twenty years of appreciation have turned avocados into a multi-billion-dollar industry where farmers nickname the fruit “green gold”. The avocado industry is so lucrative that it’s become a target for organized crime, leading people to label avocados as modern day blood diamonds. In this episode, we’ll cover the business of avocados, the major players, and how this simple fruit is at the heart of the political and economic relationship between the US and Mexico.

🎧 Audio Editing & Mixing: Sonalf

0:00 Green Gold
6:11 The Golden Hass Standard
13:12 Farm to Store Supply Chain
15:57 Breadth vs Depth
20:12 Billion Dollar Oligopoly

[ModernMBA]

0:00 The Appreciation of Green Gold
3:17 Dark Arts Behind Avocado's Rise
6:11 The Golden Hass Standard
9:27 Microeconomics of Avocados
13:12 Farm to Store Supply Chain
15:57 Breadth vs Depth
20:12 Billion Dollar Oligopoly

[sooibot]

Hey mate - as someone who can do their PhD in the Fruit Trade (if someone would want it), I have to say this is one of the most incredibly well put together and explained essays on the fruit industry (a specific commodity) I have ever seen. I think you make one GLARING error at the start, in that you sway too heavily into the idea of perfect competition, when fruit (except for a very small subset of hypersized economies of scale types) is much more akin to Monopolistic Competition. Branding (especially) and origin differentiation (which you capture) are the best ways to discern yourselves (to the intermediaries, not the final customers).

More and more (if you ever want some guidance on it) the apple business is doing incredibly well to develop Trademarks.
Otherwise... Absolutely SMASHING (get it...) piece. I will share this far and wide! (for instance... to my friend who works for Mission!)

[aidenkim]

If Masterworks have a waitlist why would they pay you to get more customers

[maxim_mazurok]

Your math is wrong, you can't just divide 150% by 24 years to get the annual appreciation. It's 3.9% per year, not 6.2%

[Tensai]

I'm a Mexican and here's what I can say about this subject.
When I was a kid avocados where like any other fruit. You could get them whenever you want to and as much as you'd like. I was proud because it's a local fruit so it made sense that it was cheaper.
As years went by I noticed that the prices just started to skyrocket. Nowadays buying one single avocado is a luxury. They have got really expensive. You could buy a whole meal for what you would pay for a single avocado, it's crazy.
That's because we are getting sold the avocados at a price premium because the demand on the US is so high. Farmers rather sell their product to the americans that would pay more than to us their fellow mexicans.
Now then, even after all of that has been said, this video shows me that they are the ones who set up the prices and have all the cards on their hands and you know what?
Good for them. Usually the farmers are the first ones to get fucked up so I guess I don't mind paying more if that means the farmer got paid fairly.
Now then, cartels always fuck things over. Like... Always... they are a bunch of thugs that will do anything for a quick buck. Just this year the prices of lemons skyrocketed because some idiots decided that they wanted to kidnap a ton of lemon farms and keep them to themselves. They are not just evil, they are stupid. They didn't know what to do with all those lemons and couldn't sell them anyway so they eventually left and let farmers back to their houses which brought back lemon prices.
I can see a future where some idiot decides to try and do something similar just to realize that trees can't grow fruit faster when you point a gun at them and just fuck over the prices of avocados.

Mexico is a great country and all but it's so covered in shit (and manipulated by the US) that you can't see the shiny gold behind all of that. It's such a shame really.

[DrTarrandProfessorFether]

I have a huge “Fuerte” (strong in Spanish for it can take frost) tree that is 50 feet tall. Drops leaves and flowers all over. These green skin grow all over Sunnyvale/San Jose, California. Most not planted but squirrels eat 90% of my huge crop and drop seeds all over. The Haas ones much more popular since they can be shipped easier with the thicker skin… but I think the thin green skin tastes better.

I got very fat squirrels in my yard.

[yashgulave]

'The only asset class that has outperformed avocados is art, which brings us to our today's sponsor...'
Bro, the S&P 500 was right there ☠️☠️

[SonofKiernan]

These Masterworks ads are gonna get you in trouble some day.

[Shimeih]

Come to Zimbabwe. Avocados are still dirt cheap even though people consume way more than before. Exporters make a killing. However, I think it’s because many families have avocado trees on their yard (some even up to 4 trees)

[jmmbuthia]

Growing up in Kenya avocados were all over the place and sold for peanuts. I remember my grandmum's place which had an avocado tree that produced avocados bigger than a grown man's feast, oily and delicious. At peak season the avocados would fall from the trees and be eaten by dogs! Now Kenya has joined the avocado craze. Farmers are uprooting coffee to grow hass avocados for the insatiable Chinese market. Avocado rejects aren't thrown away, some people buy them and make avocado oil from them. This has become the new in fruit and its making farmers a lot of money

[franciscody]

In the Philippines avocados are grown as feed for pigs. It is a diferent variety - much larger but taste the same as the smaller avocados sold in supermarkets outside the Philippines.

[mxc_clips]

Dude your content is great, as someone who doesn't know shit about business/markets/etc, your content is an interesting look into different aspects and companies.

[Vicki]

I agree with the statement that Mexican avocados are superior. I used to hate avocados, then one day I went to a moms and pops Mexican grocer and bought avocados for my better half. He told me that the avocados were exceptionally better tasting than usual and asked where I bought them. Next time we went to the big chain grocery store we bought avocados from there and bought some from the Mexican shop. Wow no comparison. Side by side taste test of Peruvian and Californian big chain avocados compared to Mexican avocados proved Mexican avocados to be the tastier by a landslide. I ended up loving (Mexican) avocados and buy Mexican avocados exclusively now. If I’m going to pay $2.50 per avocado, I might as well buy the best of the best and Mexican avocados are that.

[Lostllen]

Amazing how well the masterworks add seamlessly integrated into the story line **mind blown**

[arandomzoomer]

I’m really glad that the farmers are able to have this kind of leverage over avocado companies. That’s how it should be

[werwar]

I was in south america for a few weeks and they had many varieties of Avacado. One variety they had was like 5x times the size of regular avacados, and it tasted really good too. seemed unpractical for most households though, and better for restaurants

[JK]

Stop sneaking ads into the actual content!!!!

[ralphlagos]

Could you please make a video on how you develop your analysis? Would pay for this.

[gingerAV]

the netflix series Rotten has a great episode about avocados!! feel like it flew under the radar, but it’s a great ep and series as a whole.

[thesheefo]

great channel you have here mate. well researched and well edited, glad that I found you right now where interesting comments about where you made mistakes or things you may have missed complete the picture, sadly with Youtube's algorithm once you get picked up and get some serious steam rolling the comment section will be a fiesta of scam bots with most value ending up buried.