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What Are the Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis) For Entering the Colombian Avocado Market?
How Is the Supply Chain Value Structured for Colombian Avocados?
There are no middlemen since the objective of the exportation companies is to sell directly to final buyers.
In order to secure supplies, one must put in orders at least 2 months in advance to get hold of a substantial amount of volume because it requires time for suppliers to check harvest outcomes and packing house capacities. If seeking to spot-buy, one must look for empty spaces to schedule and secure supplies.
How is the Production Structure for Colombian Avocados?
Value Chain: Growers (Exporters) – Exporters – Sourcing companies at destination countries- Distributors & Retailers in destination countries
Given that Colombia is ranked as one of the global top 5 avocado harvesting countries, it comes as no surprise that most Colombian Avocado exporters (85%) own their production facilities.
Colombia's Avocado Grower (Supplier) market is relatively fragmented, as Colombia is considered to be a relatively young avocado-growing country that only started to grow rapidly in 2013. The growth of Colombia's Avocado industry is largely attributed to its social and supply networks.
Most notably, Colombia is home to CORPOHASS (La corporación de productores y exportadores de aguacate Hass de Colombia), the country's national association for Hass avocado.
What Is the Colombian Avocado Market Size?
Global Avocado Market Size: USD 249.3M (2020)
+162.3% YoY Growth in 2020
+105.7% CAGR during 2013-2020
Avocado Export Market Size (2020)
Mexico: USD 6.9B
Netherlands: USD 1.1B
Peru: USD 1.0B
Spain: USD 440M
Chile: USD 346M
Colombia: USD 249M
Avocado Import Market Size (2020)
Netherlands: USD 141M
Germany: USD 28M
Spain: USD 24M
UK: USD 23M
Norway: USD 8M
US: USD 7M
What Are the Export Trends for Colombian Avocados?
Source: Trade Map
What Are the New Developing Markets for Colombian Avocados?
Netherlands (+162.3% YoY): Colombian Avocados are growing in demand all over the world and the trend is evident. A remarkable increase in imports has been spotted in the Netherlands, which has already been a top importer of Colombia avocados, with imports surging by +162% in 2020.
US (+94% YoY): Hass avocados were granted admission in 2017, and US import protocols were extremely strict before 2020. However, in 2020, USDA approved the Colombian Avocado Board (CAB) application to operate under the Hass Avocado Promotion, Research, and Information Order (HAPRIO). With this, CAB would receive 85% of the levies charged on Colombian Avocados for promotions and other purposes. Colombia has been placing large efforts into promotions to target the US market. With this, export volumes to the US have started to rise aggressively.
Germany (9,385% YoY): In 2020, the overall demand for avocados in Germany rose by 7%. During the same period, Germany's import of Colombian Avocados surged by 145% YoY. More European buyers have shown a greater preference for Colombian Avocados given its year-round seasonality.
Which are the Main Producing Regions for Avocados in Colombia?
Colombia’s major avocado-producing regions are Tolima, Caldas, Antioquia, Santander, Valle del Cauca, Risaralda, and Quindio.
- 36% of all avocado productions come from Antioquia
- Valle del Cauca has the biggest yield per acres, producing 13 MT per acre
- Caldas produces 12 MT per acre
- Tnioquia produces 11 MT per acre
Colombian Hass avocado is produced almost all year long. Its peak production seasons are from January-June and September-December. One of the biggest challenges is that it has the same seasonality as avocados in Mexico, the largest exporter of Hass avocados.
In Colombia, Hass avocado is produced almost all year long, with high peak seasons in all months except for July and August: January, February, March, April, May, June, September, October, November, and December. Moreover, one of the biggest challenges of exporting avocados in Colombia is that it has the same seasonality as avocados from Mexico, which is the largest exporter of Hass avocados.
What Types of Avocado Does Colombia Produce and Export?
The most cultivated varieties in Colombia are:
Among these varieties, the Hass avocado variety has the largest export volume.
Who Are the Main Importers of Colombian Avocado?
The top destinations for Colombian Avocados are the Netherlands, the UK, Germany, Spain, France, and Norway. With Colombia being the #1 avocado supplier to Europe, Colombian avocado exporters are also searching for new markets to penetrate Asia, the Middle East, and North America.
Some notable growing importers of Colombian Avocados include the USA, Estonia, and Luxembourg.
There is a rising demand for Colombian Avocados in Europe, which has been the fastest-growing importer in the last 5 years (2016-2020) (ex. Spain +2509.49% / Germany +1801.07%)
The Colombian advantage in exporting to European Ports is that it takes only 18 days to ship. Despite short shipping times, avocados tend to sell at higher prices because Colombian exporters have become accustomed to exporting directly to European supermarkets.
Source: Tridge Trade Data
What Are the Main Local Logistics for Colombian Avocados?
- Colombian Avocado Suppliers that do not own a farm or packing house will (1) purchase from their contracted farms, then (2) bring the avocados to the packing house, and (3) take their avocados to the port via truck
- The majority of the deals are done in FOB and CIF. Larger companies prefer FOB, while smaller players usually use CIF
- Avocados with sizes between 12-24 are the most sought-after types. This demand is followed by Avocados with sizes 26-32
What are the Required Documents to Export Colombian Avocado?
1. Register with the ICA as an exporter of fresh fruit
This registry allows the exporter to obtain the phytosanitary certificates of the fruits required by the purchasing countries.
The ICA has offices throughout the country, to which the interested party can go according to their geographical location.
To obtain this registration, you must first make sure that you comply with the following requirements:
2. Obtain the registration of the property for the production of fresh fruits before the ICA.
It is important to take into account that for the production of fresh fruits destined for export, the property in which they are produced must have an infrastructure that at least has clearly defined lots or areas and that they are intended for the commercial technical production of the different species and varieties in their different phases, an aseptic treatment area of vegetable waste for the proper disposal of harvest waste.
3. Apply for the phytosanitary certificate
The phytosanitary certification depends on the requirements of the destination country of the fruit, if it does not require it, the exporter can request it voluntarily.
4. Health Inspection Certificate (CIS)
The health inspection certificate is issued by the health authority of the port of departure, it is issued in production batches or shipments, and the procedures are carried out through the National Institute of Medicines and Food (Invima).
5. Finally, you must consult with the Dian the permits that your product (fruits and vegetables) must comply with for export, after processing them, you must go to the Dian to request the boarding authorization in the computer system of the Directorate of National Taxes and Customs (Dian)
What Is the Quality Control Process for Colombian Avocados?
Quality-Related Issues
1. Shelf Life, especially when the product is sent to far areas, becomes a critical issue. For example, it takes 17-18 days to get to Europe (Rotterdam) from Colombia. When discovered quality issues are not caused by logistics, however, the supplier is held responsible.
2. Quality Check Process
- When harvested, the outer part of the product has to be checked for scratches and burns. During the packing and sorting process, the quality has to be checked again. After packing and placing products in the warehouse, the atmosphere (temperature, humidity, warehouse conditions) must also be controlled.
- Suppliers are usually the ones to perform quality inspections. For third-party inspection, however, buyers must shoulder the cost.
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