Hispanic Avocado Shopper Trends 2018 Hispanic Study part 1 Hispanic Avocado Shopper Trends Identifying growth opportunities for Hass avocados with insights into Hispanic avocado shopper trends

Objective and Executive Summary The objective of this study is to identify growth opportunities for Hass avocados by understanding the purchase habits of Hispanic avocado shoppers and the role they are playing in the growth of the category. Executive Summary Hispanic households are a powerhouse group in the avocado category. Hispanic households currently make up a relatively small share of total U.S. households (12%), but account for nearly 24% of avocado purchase dollars. Hispanic households display avocado purchase trends that surpass those of Non- Hispanic households, which helps fuel their disproportional share of avocado purchases. Nearly three quarters (73%) of Hispanic households purchased avocados in 2017, and of those purchasing households, 83% purchased more than once. In contrast, less than half (48%) of Non- Hispanic households purchased avocados, of which 74% purchased more than once. The buying rate of Hispanic households (average annual avocado spend per household) also surpasses the buying rate of Non-Hispanic households: In 2017, the average annual avocado spend per Hispanic household was +45% higher than for Non-Hispanic households ($33.01 vs. $22.69). This gap was driven by higher Hispanic purchase frequency (7.4 vs. 5.9 trips) and higher Hispanic spend per trip ($4.46 vs. $3.83). Continued next page… Data Source: IRI Consumer NetworkTM 2017 (All figures are rounded)

Executive Summary – Cont. To get a deeper look at what’s driving the higher purchase trends in Hispanic households, the study applied a purchase level shopper segmentation (Super, Heavy, Medium, Light)* to Hispanic and Non- Hispanic households. This showed that the four segments are not proportionally represented in Hispanic vs. Non-Hispanic households. For example, the Super and Heavy segments combined make up 63% of Hispanic households, but these top segments make up less than half (49%) of Non-Hispanic households. This purchase level segmentation also revealed differences in each segment’s share of total avocado purchases. With respect to purchases, the study found that the Super segment for example, accounted for 82% of all avocado purchases made by Hispanic households, compared to 73% for Non-Hispanic households. Drilling deeper, the segmentation uncovered the key purchase trends driving the high impact of Hispanic households. The household buying rate for all four segments is higher in Hispanic households than for their Non-Hispanic counterparts. And, the primary driver of this gap is spend per trip. For example: the Hispanic Super household spend per trip of $5.34 is +10% higher than the Non-Hispanic Super spend per trip of $4.87. Hispanic households are clearly playing a key role in the avocado category. This study details the actual Hispanic avocado purchase behaviors that are driving their disproportionally strong impact. Leveraging the insights in this study can help marketers and retailers enhance strategies aimed at expanding sales of Hass avocados in the retail marketplace. *Shopper segment purchase levels established by HAB’s Avocado Shopper Segmentation: Segment Dynamics by Region Study

Methodology: Shopper Segmentation Shopper Segmentation by Purchase Level The shopper segmentation divides avocado purchasing households into four groups based on their annual avocado purchases levels*. The definitions for each of the four shopper segments are as follows: Super, spend $25.36 or more annually on avocados ($69.60 on average) Heavy, spend between $9.78 and $25.35 annually ($16.15 on average) Medium, spend between $3.69 and $9.77 annually ($6.32 on average) Light, spend $3.68 or less annually ($1.92 on average) Using the definitions above, this study identified the concentration of each of the four shopper segments in Hispanic (and Non-Hispanic households) and analyzed the respective purchase trends to uncover insights and growth opportunities for Hass avocados. Data Source: IRI Consumer NetworkTM 2017 (All figures are rounded) *Shopper segment purchase levels established by HAB’s Avocado Shopper Segmentation: Segment Dynamics by Region Study

Hispanic Household AVOCADO Purchase Trends All Households & Shopper segments Hispanic Household AVOCADO Purchase Trends

Nearly 75% of all Hispanic households purchase avocados Nearly 75% (73.3%) of Hispanic households purchased avocados in 2017, while less than half of Non-Hispanic households purchased avocados during the same period. Household penetration increased for Hispanic households (+0.2 points), while Non-Hispanic household penetration declined -1.5 points. Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Nearly 83% of the Hispanic avocado-purchasing households purchase avocados more than once per year A large percentage (82.7%) of Hispanic avocado-purchasing households purchased avocados more than once in 2017. This Hispanic household repeat buyer rate is +8.8 percentage points higher than the rate for Non-Hispanic households (73.9%) However, repeat rate declined slightly for both Hispanic and Non-Hispanic households. Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Nearly one-fourth of all avocado purchases are made by Hispanic households Hispanic households have a greater impact on the avocado category than their share of the general population would suggest. Although currently comprising a relatively small share of the general population (12.2%), Hispanic households make up a disproportionate share of avocado households (17.5%) and account for an even greater share of avocado purchases (23.6%) Data Source: IRI Consumer NetworkTM 2017 (All figures are rounded)

Hispanic avocado households spend more annually on avocados than Non-Hispanic avocado households At $33.01 per household, Hispanic household average annual avocado spend is +45% higher than the Non- Hispanic spend per household ($22.69). However, the Non-Hispanic spend per household is increasing at a greater clip (+8.3% vs. +1.9%). Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Hispanic avocado households purchase avocados more often, and spend more per trip, than Non-Hispanic avocado households Hispanic households purchase avocados 7.40 times per year on average, +25% more often than Non-Hispanic households (5.93 trips). However, trip frequency declined for both Hispanic and Non-Hispanic households Hispanic households spend $4.46 per trip, which is +16% higher than Non-Hispanic households ($3.83 per trip). Spend per trip increased for both Hispanic and Non-Hispanic households (+8.4%), but Non-Hispanic household spend per trip is increasing at a greater rate (+9.3%) than Hispanic household spend per trip (+5.5%) Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Super and Heavy segments comprise more than 60% of Hispanic avocado households, compared to less than 50% for Non-Hispanic avocado households Hispanic households saw a small shift in their segment shares. Super and Light segments gained share in Hispanic households, while Heavy and Medium segments lost share Non-Hispanic households also saw changes in their segment shares, showing a shift from the Light segment to the Medium and Super segments. The Super segment gained share in both Hispanic and Non-Hispanic households. Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

The Super segment accounts for nearly 82% of Hispanic household purchases The Super segment is a powerhouse for Hispanic households, making 81.5% of Hispanic household avocado purchases. The Super household segment accounts for a smaller share of Non-Hispanic household avocado purchases (73.4%) The share of avocado purchases made by the Super segment increased for both Hispanic and Non-Hispanic households. Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Hispanic Super, Heavy, Medium and Light segments have a similar repeat rate to Non-Hispanic segments All Shopper Segments Super Heavy Medium Light 75.4% 99.4% 96.6% 73.6% 28.5% -0.6 -0.1 -2.6 -3.2 Total Households The four shopper segments (S, H, M, L) have similar repeat buyer rates in Hispanic and Non-Hispanic households. The Light segment has the lowest repeat rate in both Hispanic and Non-Hispanic households. Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Hispanic Super, Heavy, Medium and Light segments spend more per household on avocados annually than their Non-Hispanic counterparts All Shopper Segments Super Heavy Medium Light $24.50 $69.60 $16.15 $6.32 $1.92 +7.0% +4.1% -0.3% +1.2% +3.7% Total Households Hispanic household average annual avocado spend ($33.01) is +$10.32 higher than the Non-Hispanic average spend ($22.69). This gap is driven by a higher Hispanic spend across all four segments. The annual spend per household increased for all segments except Heavy in both Hispanic and Non-Hispanic households. Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Hispanic household segments (except Heavy) purchase less often, but spend more per trip, than Non-Hispanic household segments Super, Medium, and Light Hispanic households purchase avocados less frequently than their Non-Hispanic counterparts. Hispanic purchase frequency declined across all segments. Conversely, Hispanic households spend more per trip across all segments, which drives a higher overall spend rate for total Hispanic households. All segments saw an increase in spend per trip in both Hispanic and Non-Hispanic households. Total Households All Shopper Segments Super Heavy Medium Light 6.19 13.97 5.88 2.78 1.40 -1.3% -0.8% -7.6% -10.5% -4.1% All Shopper Segments Super Heavy Medium Light $3.96 $4.98 $2.75 $2.28 $1.37 +8.4% +4.9% +8.0% +13.0% +8.2% Total Households Data Source: IRI Consumer NetworkTM 2017 vs. 2016 (All figures are rounded)

Terms and Definitions Shopper Household Groups Shopper Segmentation: Hispanic Households Non-Hispanic Households Total Households Shopper Segmentation: By Purchase Level (Super, Heavy, Medium, Light) – See page 4 for methodology and definitions Metrics: All figures in this report are rounded Annual Spend per Avocado Household – Average annual spend on avocados per avocado buying household. Annual Spend = Number of Trips X Spend per Trip Number of Trips – Average annual avocado purchase occasions per avocado buying household Spend per Trip – Average avocado dollar spend per purchase occasion Purchases – Throughout this report, “purchases” refers to dollar purchases. Volume/units/eaches are not available Time Periods: Current Year (CY) – 2017 Calendar year Prior Year (PY) – 2016 Calendar year Source Data: IRI Consumer NetworkTM 2017 (Details on page 17)

Data Source: IRI Consumer NetworkTM This report is based on household purchasing data from the IRI Consumer NetworkTM. IRI receives its household purchasing data from the National Consumer Panel (NCP), an operational joint venture by IRI and Nielsen. The NCP is a continuous household purchasing consumer panel that consists of a representative sample of U.S. households who electronically record all purchases. Households are recruited to the NCP and are incented to record all of their purchases, regardless of where purchased, using a handheld in-home scanning device. Household purchasing data complements retail sales data and provides a deeper understanding of category dynamics by focusing on shoppers and their purchase behaviors. In turn, understanding shopper purchase behaviors helps uncover opportunities for growth and aids in effective sales and marketing decisions. Electronically recorded at home In-store purchases

Thank you For additional retail information and insights please visit the Hass Avocado Board website at: hassavocadoboard.com