By Emiliano Escobedo, Executive Director of the Hass Avocado Board
The avocado category is one of the most successful categories in fresh produce. Nearly 60 percent of U.S. households purchase avocados each year, with an average annual household spend of $23.91, driving total annual household purchases to more than $1.6 billion. The actions of today’s avocado shoppers shape the future of this vibrant category. Understanding these shoppers and how their actions impact the category can help marketers optimize strategies aimed at building avocado sales.
To enrich the industry’s understanding of the avocado shopper, the Hass Avocado Board recently released a new shopper insights digital brochure, the Avocado Shopper Segmentation Action Guide. This brochure focuses on selected findings from the Hass Avocado Board’s full segmentation study (2016 Avocado Shopper Segmentation: Using Shopper Insights to Drive Retail Sales of Hass Avocados). Two of the key takeaways highlighted in the brochure is the impact of top-spending households on the category, and the demographic profile reflected in their purchases.
Two analytical methodologies were used to uncover new insights in these areas. The first analysis developed a purchase-level shopper segmentation. This segmentation was based on avocado purchase data from the IRI Consumer Network, a continuous household purchasing panel that captures actual shopper purchases and behaviors. The demographic analysis was drawn from this same data set.
The segmentation was conducted by ranking avocado purchasing households by each household’s total annual avocado spend (high to low) and then dividing this ranked list into four equal segments. The top-spending quartile (25 percent) was designated “Super Heavy” households, and the remaining three segments were named “Heavy,” “Medium” and “Light” households. The analysis revealed Super Heavy shoppers, while comprising only one out of every four households, account for nearly three out of every four avocado purchase dollars. The analysis also showed the average annual spend for Super Heavy households was $69.77, triple the national average and four times the buying rate of the next highest-spending group, the Heavy households. Drilling into the underlying purchase drivers behind this high rate of purchase revealed that Super Heavy households purchase avocados twice as often and spend twice as much per avocado shopping occasion as the Heavy households.
While all shoppers contribute to the category, the findings indicate Super Heavy shoppers also represent a key growth target. For example, a +1 percent increase in the number of Super Heavy annual purchase trips, or a +1 percent increase in the group’s average spend per trip, represents a potential +$12 million in incremental category purchases. The current purchase habits and the growth potential of the Super Heavy segment speak to how important these households are to the category’s success. But who are the shoppers behind these purchases?
To answer this question, the study examined Super Heavy purchase volume with respect to seven demographic variables. Four demographic variables — age, marital status, household size and income level — stood out. Within each of these four demographic variables, one of the variable’s sub-groups was found to account for a surprisingly large and disproportionate share of avocado purchases. For example, within the age variable, the younger household sub-group (ages 18-44) was found to account for nearly half (49 percent) of all Super Heavy purchases, while comprising only 37 percent of the general population. When segmented by household size, the larger household sub-group (3+ occupants) was also found to account for 49 percent of Super Heavy purchases, yet only 41 percent of the general population. A similar pattern was seen in the marital status sub-groups and income level sub-groups. Overall, a Super Heavy profile emerged skewing to households that are younger, married, larger and have higher incomes.
The purchase patterns of the Super Heavy segment and the demographic profile reflected in their purchases may signal marketing opportunities for retailers and marketers, and provide insights on the future make-up of the households making these purchases. In addition to these insights, the Action Guide highlights other key takeaways from the Avocado Shopper Segmentation study, including quarterly purchase drivers and more in-depth comparative views of the Super Heavy, Heavy, Medium and Light shopper segments.
To learn more about how these key shopper segments are driving the avocado category, go to hassavocadoboard.com/retail/market-basket-shopper-trends.