Can Kenya Cash In On The Global Avocado Craze?
More and more Kenyan farmers are growing avocados, the native Mexican fruit that are both profitable and relatively easy to produce. But global competition is fierce.
MURANG'A — Mwaura Morisson jokes that when he walks out in the morning and looks at the trees — some of which already carry tiny embryos of fruit — what he really sees is money. "It's not in my pocket yet," the elderly man says, smiling. "But I'm already counting how much I will make."
The farmer, his hands in the pockets of a worn out raincoat, is showing off his shamba, his plot of land, and talking about his avocado trees, which grow in a row of terraces in Murang'a county, a two-hour drive from Nairobi, the Kenyan capital. The October rains have barely begun but boots are already sinking in the viscous, red soil of this fertile region, wedged between the Aberdare mountain range and Mount Kenya, an extinct volcano with snow-capped peaks.
Originating in Central America, the avocado was brought over by colonial English settlers. But until the 1970s, it was just another tree on the shamba, harvested from time to time to be eaten by the family. Back then the big focus in Kenya — and in this area in particular — was coffee. "Murang'a county was number one!" recalls Thomas Njoroge, an accountant who returned to agriculture after his retirement in 1980.
But as coffee prices began to fall, local officials — those that were involved in the export sector — started betting on avocados. Njoroge gradually switched over from the coffee plants, left to him by his father, as well. First he planted the Fuerte avocado, the most popular back then, and then Hass avocados, which dominate the market today.
Part of his interest in avocados is that they're "easy" to grow, the 62-year-old boasts, sitting in the shade of his house on edge of his plot. "If the tree is well nourished, it's impossible to miss a harvest. Income is guaranteed," he says.
Putting his hands behind his head and stretching his long legs, Njoroge laughs. "All I have are trees," he says. "So all I have to do is wait."
If the tree is well nourished, it's impossible to miss a harvest. Income is guaranteed.
The Kenyan highlands offer good climactic conditions for the crop: a high altitude and therefore a good temperature, two rainy seasons a year, and not much need for either irrigation or fertilizers. Thomas Njoroge's 20 trees each yield between 500 and 2,000 kgs of avocados, which his exporter, Fair Trade Limited, comes to pick up from his plot. He is paid in cash, per kilo, through M-Pesa, a Kenyan mobile payment system.
Profits are much better than with coffee, which requires a lot of care and involves a tedious harvest. "You earn very little money," the farmer explains. "It's 50 shillings ($0.43) per kilo, but, after deducting expenses, you're left with 10 shillings. The avocado has a high payout: I earn 50 shillings per kilo, and after expenses I'm left with 45 shillings."
Children eating avocado in the Nyota daycare center in Lwala/Kenya — Photo: Nicor
On the thousands of small plots of land in the region (often less than 10 hectares), a pell-mell of banana trees, papaya trees, coffee shrubs, corn and vegetables are grown. But as Mwaura Morrison explains, the real money makers are the avocados. "And since they don't demand much work, I have time for my other crops," he says. "Because you shouldn't put all your eggs in a single basket."
Morrison's income has allowed him to replace his old earthen house with a new one made from cement. He even built a second house at the end of the field to earn money from rent. "With this money, we progress, you know, we can do things, buy what we need," he says.
Like these small producers (who represent the bulk of avocado production, industrial farms being a minority), the avocado has conquered Kenya. In 10 years, exports have risen from 15,700 tons to 75,000 tons today, an increase of 400%. Authorities are very much in favor of export crops, and boast that they have surpassed production in South Africa, which suffers from recurrent water shortages.
"And there are still regions where more avocados can be grown. You'll see even more in Kenya in the next five years!" says exporter Bernard Kimutai of Fair Trade Limited, which specializes in organic goods and works with 2,500 farmers.
In 10 years, exports have risen from 15,700 tons to 75,000 tons today, an increase of 400%.
Demand for avocados is huge, especially in Europe and the United States, the two primary markets for the fruit, with its creamy flesh and "good" unsaturated fats. Every year sales rise by more than 10%, and overall, global avocado exports have more than doubled in a decade to 2.2 million tons.
"The boom dates back seven or eight years in Europe where most Kenyan avocados are sold and to the beginning of the decade 2010 in the United States," says Eric Imbert, a specialist in the economics of avocados at CIRAD (the Center for International Research in Agriculture and Development), in Montpellier, France.
The fruit, says the expert, has benefited from important marketing efforts, centered around its nutritional virtues, and from improved ripening techniques that allow consumers to buy avocados when they are at their ripest. So what's to come?
"In the United States, where a lot of money is being spent on promotion, we still have good days ahead of us, especially on the East coast. In Europe, it will depend on the investments put in place," he explains.
Barriers to entry
Exporters are also looking east, to China, whose 1.4 billion inhabitants represent a huge potential market for avocado producing countries, Kenya included. The country's president, Uhuru Kenyatta, even signed a trade agreement in April with his Chinese counterpart, Xi Jinping. The plan is to eventually send China "more than 40% of national production," Kenyatta promised.
Exporters in Nairobi are enthusiastic, although unlike Europe, which imports fresh avocado, China only buys avocados that have already been chopped and frozen. "This is a very good opportunity despite being a more complex process," says Tiku Shah, general manager of the exporter Sunripe, which already has the necessary equipment in place and works with the French frozen-food retailer Picard.
People in the United States consume the equivalent of Kenya's annual production during Super Bowl weekend alone.
Kenya's leading avocado exporter, Kakuzi, did not respond to our questions. But another major export company, Keitt, is also adapting to the Chinese market. "We're building a state-of-the-art plant to produce frozen avocados and avocado oil by 2021," company director Asif Amin explains.
But Eric Imbert of CIRAD is a bit skeptical still of the potential for major sales in China. "It's a market that's growing by less than 10,000 tons a year is trying to find itself," he says. "The avocado is still unknown in China, where, in general, vegetables are eaten cooked. We'll have to educate the consumer."
Also, Kenya is not located in the best place to respond to this very specific demand, Imbert adds. "This ultra-fast freezing technique, called IQF, requires colossal investments, and in Peru, for example, large companies like Camposol already have the technology in place."
Despite the impressive increase in recent years in avocado production, Kenya is still just a modest player in the global market. It's currently the sixth leading exporter, but produces just a fraction of what market leaders like Mexico, Peru and Chile export. "People in the United States consume the equivalent of Kenya's annual production during Super Bowl weekend alone," says Tiku Shah of Sunripe.
The world's top avocado producers rely on more industrialized and standardized processes, whereas in Kenya, the fruit is still grown on a small scale. Kenyan avocados are less uniform, as a result, and often sell for less. And about 30% of Kenyan avocados, according to Fair Trade Limited's Bernard Kimutai, aren't even exportable due defects in size, shape, or improper handling.
And in the meantime, competition will only increase, Eric Imbert warns. "Demand is currently very strong, but there are phenomenal developments in South America, and markets will become more complex," he says. There's a real risk, in other words, that Kenya's small-scale producers — people like Mwaura Morisson — could see this precious green windfall disappear.