1. Avocado Category Channel Overview
2017
Retail Channel
Study
Part I
Avocado Category Channel Overview
Understanding Category Purchase Trends by Channel to Grow Sales of Hass Avocados

2. Table of Contents Terms and Definitions 3 Executive Summary 4
Total Category Snapshot 6
Channel Comparison 9
Channel Purchase Trends 17
Grocery
Walmart 22
Club 27
Mass/Supercenter 32
Internet 37
Dollar Stores 42
Appendix/All Other 47

3. Terms and Definitions Product: Time Periods Channels
Avocados
Time Periods
Current Year (CY) – 2016 Calendar year
Prior Year (PY) – 2015 Calendar year
Channels
All Channels
Grocery
Walmart – All Walmart non-Club stores including Supercenters
Club
Mass/Supercenter – Excluding Walmart
Internet – All online avocado purchase sites (e.g. Amazon, Walmart.com, etc.)
Dollar
All Other – Drug, Military and Misc.
Metrics: All metrics in this report are rounded
Household (HH) Penetration – The percentage of households that purchased product
Shoppers/Buyers – Throughout this report, the term “shoppers” and “buyers” refers to households that purchased the product
Repeat Buyers – Households that purchased the product more than once per year
Buying Rate – Annual product dollar spend per product buying household
Trips per Buyer – Annual number of purchase occasions per product buying household
Dollars Per Trip – Dollar spend on product per purchase occasion
Purchases – Household purchases are captured in dollars (no volume or units)
Source:
IRI Consumer NetworkTM 2016

4. Executive Summary
Avocados are one of the most successful categories in fresh produce. In 2016, the category grew to more than $1.4 billion in avocado purchases at retail. With the growing popularity of fresh avocados in the U.S., avocados can now be purchased in a wide variety of retail channels from traditional Grocery to Internet and beyond. Yet, despite competition from emerging channels, over 95% of all avocado purchases are made in just three channels – Grocery, Walmart and Club – with Grocery commanding the top spot and a 73% share of avocado purchases.
While Grocery is the largest retail channel for avocado purchases, it lost share in 2016 to large format channels (Walmart, Club, and Mass/Super), who were the only channels to post gains. Walmart, Club and Mass/Super contributed a combined +$18.4 million in incremental avocado purchases, offsetting losses in the other channels and resulting in net category growth of +$9.3 million for the year.
GROCERY: Grocery holds the biggest share of avocado purchases (73%) due in part to the large number of avocado shoppers who buy in Grocery: 85% of all avocado-purchasing households buy avocados in Grocery. Frequency of purchase is also highest in Grocery at 5.4 trips per year. However, Grocery purchases fell nearly -$2 million in 2016, on a drop in spend per trip (-2%). Reversing this negative trend will be important to stemming the channel’s share loss moving forward.
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

5. Executive Summary – Cont.
WALMART: Walmart is the second-largest channel, growing to a 12% share on incremental purchases of +$10.7 million. Just under one third of all avocado-purchasing households buy avocados at Walmart – significantly lower than Grocery – but this number rose in 2016 (+0.8 point), as did trip frequency (+3%). If these positive purchase trends continue, Walmart could continue to hold off competitors and reduce Grocery’s dominance in this category.
CLUB: Club is the third-largest avocado channel with a 10% share of avocado purchases and incremental purchases of +$6.3 million in Club’s position is strengthened by a high spend per trip rate. At $6.30 per trip, Club is 76% higher than Grocery and more than double the rate in Walmart. Furthermore, an increase in households purchasing avocados in Club, and more frequent trips, portend well for Club’s continued strength in this category.
The remaining five percent of avocado purchases are spread across a number of channels including Mass/Super, Dollar, and Internet. Despite increased availability of fresh avocados in these emerging channels, 2016 only saw growth in the Mass/Super channel, which delivered +$1.4 million in incremental avocado purchases. Purchase trends were negative for the Internet and Dollar channels in 2016, leading both to decline in purchases and share.
Leveraging the channel insights in this study and continuing to monitor the retail landscape can aid in creating sales and marketing strategies for the continued growth of Hass avocados.
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

6. Total category snapshot
Purchase Trends
Total category snapshot

7. Avocado purchases at retail exceeded $1
Avocado purchases at retail exceeded $1.4 billion in 2016, an increase of +$9.3 million vs. prior year
+$9.3MM
(+0.7%)
Total category purchases reached $1,437,983,563 in 2016, based on incremental purchases of +$9,333,237, an increase of +0.7% vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

8. total avocado purchases $22.60 annual spend per household
Growth in total avocado purchases was driven by increases in households purchasing, repeat buyers and number of trips $
$1,437,983,563
(+$9.3MM)
total avocado purchases
+0.7% vs. prior year
52.2%
Total U.S. households
purchasing avocados
+0.5 point vs. prior year
$22.60 annual spend per household
-1.1% vs. prior year
6.3 trips per year
+1.1% vs. prior year
$3.61 per trip
-2.1% vs. prior year
24.0%
purchased once
76.0%
repeat buyers
Total avocado category purchases grew in 2016 on upticks in a number of purchase trends
The percent of Total U.S. households purchasing avocados and the percent of repeat buyers both increased +0.5 point
Purchase frequency rose to 6.3 trips per year, an increase of +1.1%
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

9. Purchase Trends
Channel comparison

10. The Grocery channel has a commanding share of the $1
The Grocery channel has a commanding share of the $1.4 billion in avocado purchases, but lost share to Walmart, Club and Mass/Super in 2016
73% of avocado purchases are made in the Grocery channel. This was a drop in share of point vs. prior year (73.15% – 73.76% = point)
Internet, Dollar and All Other channels also lost share to Walmart, Club and Mass/Super
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

11. Net category purchases grew +$9. 3MM vs. prior year
Net category purchases grew +$9.3MM vs. prior year. Increased purchases at Walmart, Mass/Super and Club offset declines in the other channels
Purchases at Walmart, Mass/Super and Club (combined) increased +$18.4MM, offsetting losses in other channels. This resulted in net category purchase growth of +$9.3MM
Walmart was the main growth driver, with +$10.7MM in incremental purchases
Grocery, Internet, Dollar and All Other channels lost purchases vs. prior year (combined loss of -$9.1MM), in addition to losing share (page 10)
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

12. % of avocado shoppers that purchased avocados in each channel
Over half of all U.S. households purchased avocados in 2016, with many households purchasing avocados in more than one channel
85%
29%
13% 3% 1% 1% 9%
% of avocado shoppers that purchased avocados in each channel
52.2% of U.S. households purchased avocados in any channel in 2016, up +0.5 percentage point vs. prior year
Over 8 in10 avocado-buying households (85%) purchased avocados in Grocery
Avocado shoppers purchased in more than one channel (e.g. shoppers who purchase avocados in Grocery may also purchase avocados at Walmart)
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

13. Grocery has the highest percentage of repeat avocado shoppers, followed by Walmart and Club
Grocery has the highest repeat buyer rate: 71.6% of households who buy avocados in Grocery do so more than once per year
Mass/Super has the lowest repeat buyer rate at 27.6%. However, this repeat rate is growing fastest at Mass/Super, up +3.4 percentage points vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

14. Annual spend per household is highest in Grocery, followed closely by Club
Shoppers spent $19.44 per household in the Grocery channel, followed by $17.28 in Club
Annual spend per household declined in all channels except Walmart (+1.6%) and Mass/Super (+4.6%)
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

15. Trip frequency is highest in Grocery, followed by Walmart and Club
Trip frequency is highest in Grocery at 5.4 trips per year, up slightly vs. prior year (+0.4%)
Walmart has the second-highest frequency at 3.3 trips per year, up +2.6% vs. prior year
Dollar stores have lower trip frequency, yet they have the greatest increase in frequency on a percentage basis, up +4.0% vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

16. Spend per trip is highest in Club stores, followed by Internet and Mass/Super
Spend per trip is highest in Club stores, at $6.30, up +0.9% vs. prior year
Internet had the second-highest spend per trip at $4.02, followed by Mass/Super stores at $3.66, an increase of +7.3% vs. prior year
Spend per trip is lowest in Walmart and Dollar stores, with both reflecting a decline vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

17. Purchase Trends
Grocery

18. Over 8 out of 10 avocado-buying households (85%) purchase avocados in Grocery
Total U.S.
+0.1 point
Over 8 in 10 avocado-buying households (85.1%) purchase avocados in Grocery, up +0.1 point vs. prior year (85.0%)
14.9% of avocado-buying households purchase in other channels, but not in Grocery
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

19. Nearly three out of four Grocery avocado shoppers purchased avocados in Grocery more than once
Repeat Buyers
+0.3 point vs. prior year
The Grocery channel has the highest repeat buyer rate: Nearly three out of four Grocery avocado shoppers (71.6%) purchase avocados more than once in Grocery, up point vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

20. Annual spend per household in Grocery declined in 2016, driven by a drop in spend per trip
5.4
Trips per Year
$3.57
Spend per Trip
$19.44
Annual Spend = X
+0.4% vs prior year
-2.5% vs prior year
-2.1% vs prior year
Annual spend per household in Grocery declined -2.1% vs. prior year to $19.44
The slight increase in number of trips was not enough to offset the -2.5% decline in spend per trip
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

21. $19.44 annual spend per household
Grocery is the dominant channel for avocados, but lost share in 2016 to Walmart, Club and Mass/Super $
73% dollar share
-0.61 point vs. prior year
$19.44 annual spend per household
-2.1% vs. prior year
5.4 trips per year
+0.4% vs. prior year
$3.57 per trip
-2.5% vs. prior year
28.4%
purchased once
71.6%
repeat buyers
+0.3 point vs. prior year
$1,052,005, avocado purchases in Grocery
-0.2% vs. prior year
85%
of avocado-
purchasing households
+0.1 point vs. prior year
With a 73% share of avocado purchase dollars, Grocery remains the dominant channel for avocados
85% of avocado-purchasing households buy avocados in Grocery
Grocery lost share in 2016 (-0.61 point) to Walmart, Club and Mass/Super on a -2.5% decline in average spend per trip
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

22. Purchase Trends
Walmart

23. Nearly thirty percent of avocado-purchasing households purchase avocados in Walmart
+0.8 point
28.9% of avocado-purchasing households purchase avocados in Walmart, up +0.8 point over prior year (28.1%)
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

24. More than half of all Walmart avocado shoppers purchased avocados in Walmart more than once
Repeat Buyers
+0.6 point vs. prior year
More than half (53.7%) of all Walmart avocado shoppers purchased avocados more than once in the channel, up +0.6 point vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

25. Annual spend per household in Walmart rose in 2016, driven by an increase in purchase frequency
3.3
Trips per Year
$2.91
Spend per Trip
$9.59
Annual Spend = X
+2.6% vs prior year
-1.0% vs prior year
+1.6% vs prior year
Annual spend per household in Walmart rose +1.6% in 2016 to $9.59
Trip frequency grew +2.6% to 3.3 trips per year, offsetting the drop in spend per trip
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

26. avocado purchases in Walmart $9.59 annual spend per household
Walmart is the second-largest channel for avocado purchases and gained share in 2016 $
$176,382,665
(+$10.7MM)
avocado purchases in Walmart
+6.5% vs. prior year
$9.59 annual spend per household
+1.6% vs. prior year
3.3 trips per year
+2.6% vs. prior year
$2.91 per trip
-1.0% vs. prior year
46.3%
purchased once
53.7%
repeat buyers
+0.6 point vs. prior year
12% dollar share
+0.67 point vs. prior year
29%
of avocado-
purchasing households
+0.8 point vs. prior year
Walmart is the second-largest channel for avocado purchases, with a 12% share of avocado purchase dollars (+0.67 point)
Walmart added +$10.7MM in purchases, driven by increases in households purchasing and repeating in the channel and increased purchase frequency
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

27. Purchase Trends
Club

28. Thirteen percent of avocado-purchasing households purchase in Club
+0.5 point
12.8% of avocado-purchasing households purchase in Club, up +0.5 point over prior year (12.4%)
Most avocado-purchasing households (87.2%) purchase in other channels, but not in Club
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

29. Half of all Club avocado shoppers purchased in Club more than once
Repeat Buyers
+0.1 point vs. prior year
Half of all Club avocado shoppers (49.8%) purchased avocados more than once in the Club channel, up +0.1 point vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

30. Annual spend per household in Club declined in 2016
2.7
Trips per Year
$6.30
Spend per Trip
$17.28
Annual Spend = X
-1.8% vs prior year
+0.9% vs prior year
-0.9% vs prior year
Annual spend per household in Club declined slightly (-0.9%) in 2016 to $17.28
The increase (0.9%) in spend per trip was not enough to offset the drop in trip frequency
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

31. Club is the third-largest channel for avocado purchases and gained share in 2016$
$141,193,347
(+$6.3MM)
in Club avocado purchases
+4.7% vs. prior year
13%
of avocado-
purchasing households
+0.5 point vs. prior year
$17.28 annual spend per household
-0.9% vs. prior year
2.7 trips per year
-1.8% vs. prior year
$6.30 per trip
+0.9% vs. prior year
50.2%
purchased once
49.8%
repeat buyers
+0.1 point vs. prior year
10% dollar share
+0.38 point vs. prior year
Club is the third-largest channel for avocado purchases, with a10% share of avocado purchase dollars (+0.38 point)
Club added +$6.3MM in purchases, driven by increases in households purchasing and repeating in the channel and on higher spend per trip
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

32. Purchase Trends
MASS/SUPERCENTER

33. A small percentage of avocado-purchasing households purchase avocados in Mass/Super stores
+0.2 point
3.1% of avocado-purchasing households purchase in Mass/Super, up +0.2 point over prior year (2.9%)
Most avocado-purchasing households (96.9%) purchase in other channels, but not in Mass/Super
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

34. More than one out of four Mass/Super avocado shoppers purchase in Mass/Super more than once
Repeat Buyers
+3.4 points vs. prior year
More than one out of four Mass/Super avocado shoppers (27.6%) purchased avocados more than once in the channel, up +3.4 points vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

35. Annual spend per household in Mass/Super rose in 2016, driven by higher spend per trip
1.7
Trips per Year
$3.66
Spend per Trip
$6.36
Annual Spend = X
-2.6% vs prior year
+7.3% vs prior year
+4.6% vs prior year
Annual spend per household in Mass/Super grew +4.6% in 2016 to $6.36
The increase (+7.3%) in spend per trip offset the drop in trip frequency
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

36. purchasing households $6.36 annual spend per household
Mass/Super holds a small share of avocado purchases, but share increased slightly in 2016 $
$12,727,033
(+$1.4MM)
in Mass/Super
avocado purchases
+12.3% vs. prior year 3%
of avocado-
purchasing households
+0.2 point vs. prior year
$6.36 annual spend per household
+4.6% vs. prior year
1.7 trips per year
-2.6% vs. prior year
$3.66 per trip
+7.3% vs. prior year
72.4%
purchased once
27.6%
repeat buyers
+3.4 points vs. prior year
1% dollar share
+0.09 point vs. prior year
A small share (1%) of avocado purchases are made in Mass/Super, but the channel gained share in 2016 (+0.09 point)
Growth in Mass/Super was driven by an increase in households purchasing and repeating in the channel, and a rise in spend per trip
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

37. Purchase Trends
Internet

38. Avocados are purchased online by a small percentage of avocado shoppers
-0.3 point
1.1% of avocado-purchasing households purchase on the Internet, down -0.3 point over prior year (1.4%)
Most avocado-purchasing households (98.9%) purchase in other channels, but not online
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

39. More than one out of three Internet avocado shoppers purchased online more than once, but this repeat rate declined in 2016
Repeat Buyers
-2.4 points vs. prior year
36.4% of Internet avocado shoppers purchased avocados more than once in the channel, down -2.4 points vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

40. Online annual avocado spend per household declined in 2016
2.2
Trips per Year
$4.02
Spend per Trip
$8.75
Annual Spend = X
-9.3% vs prior year
-0.7% vs prior year
-9.9% vs prior year
Annual household spend on the Internet declined (-9.9%) in 2016 to $8.75
This decline was driven by fewer trips (-9.3%) and lower spend per trip
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

41. Internet is a small channel for avocados and lost share in 2016$
$6,148,476 in Internet avocado purchases
-28.4% vs. prior year 1%
of avocado-
purchasing households
-0.3 point vs. prior year
$8.75 annual spend per household
-9.9% vs. prior year
2.2 trips per year
-9.3% vs. prior year
$4.02 per trip
-0.7% vs. prior year
63.6%
purchased once
36.4%
repeat buyers
-2.4 points vs. prior year
1% dollar share
-0.17 point vs. prior year
Internet purchases declined notably in 2016 (-28.4%) on a fall-off in all key purchase drivers
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

42. Purchase Trends
Dollar stores

43. Avocados are purchased in Dollar stores by a small percentage of avocado shoppers
-0.3 point
1.4% of avocado-purchasing households purchase in Dollar stores, down -0.3 point over prior year (1.7%)
Most avocado-purchasing households (98.6%) purchase in other channels, but not in Dollar
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

44. Two out of five Dollar store avocado shoppers purchased in Dollar stores more than once
Repeat Buyers
-2.7 points vs. prior year
Two out of five Dollar avocado shoppers (40.8%) purchased avocados more than once in the channel, down -2.7 points vs. prior year
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

45. Annual spend per household in Dollar stores fell in 2016, driven by lower spend per trip
2.2
Trips per Year
$2.49
Spend per Trip
$5.50
Annual Spend = X
+4.0% vs prior year
-6.2% vs prior year
-2.4% vs prior year
Annual spend per household in Dollar stores declined (-2.4%) in 2016 to $5.50
The increase in trip frequency (+4.0%) was not enough to offset the decline in spend per trip (-6.2%)
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

46. Dollar stores are a small channel for avocado purchases and the channel lost share in 2016
Less than 1% dollar share
-0.07 point vs. prior year $
$5,010,296 in Dollar Store avocado purchases
-16.0% vs. prior year 1%
of avocado-
purchasing households
-0.3 point vs. prior year
$5.50 annual spend per household
-2.4% vs. prior year
59.2%
purchased once
40.8%
repeat buyers
-2.7 points vs. prior year
2.2 trips per year
+4.0% vs. prior year
$2.49 per trip
-6.2% vs. prior year
Dollar store purchases declined -16% in 2016
Dollar stores lost avocado shoppers and repeat buyers, and saw a reduction in spend per trip
Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded. See appendix for actual figures)

47. Purchase Trends
Appendix/ALL OTHER

48. Appendix Total Category Grocery Walmart
Data Source: IRI Consumer NetworkTM 2016

49. Appendix Club Mass/Super Internet
Data Source: IRI Consumer NetworkTM 2016

50. Appendix Dollar All Other
All Other is an aggregate of Drug, Military (DeCA) and Misc. channels. All Other avocado purchases declined in 2016, driven by lower household penetration and a lower spend per household.
Data Source: IRI Consumer NetworkTM 2016