Avocado prices smashing cafes around the country

28 January, 2016 by
Danielle Bowling

Cafes and restaurants around the country are feeling the pinch, with avocado prices putting increased pressure on breakfast profits.

According to the ABC, caf owners are frustrated with a limited supply of avocados, and unusually high prices.

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With avocados such a popular breakfast menu item, cafes are being forced to consider price rises or altering the dishes on offer.

Scott Kennedy from Mister Mr Caf in Melbourne’s Windsor said avocado is ordered by about 50 percent of his breakfast diners, so price hikes may be his only choice.

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“Taking smashed avocado off the menu in Melbourne probably isn’t the smartest option,” he said.

Avocados Australia has hit back at claims that the shortage is a result of growers altering their harvest to manipulate pricing. It has been suggested that growers in Western Australia ramped up their pre-Christmas market supply to boost sales at lower prices in the lead up to the festive season, causing a shortage and price hike in the new year.

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A statement from Avocados Australia said January/February is a lower supply period and this would normally push prices up.

“There is a limit to how much growers can vary their harvest schedule,” said John Tyas, Avocados Australia CEO.

“There are too many steps in our supply chain to ramp up supply – the growers would need to contract extra pickers, and the knock-on effect is that the packers would need to schedule extra staff and more trucks for transport and this simply can’t happen at a moment’s notice.

“It is ludicrous to think that growers would push fruit through at lower prices to create a supply shortage and demand spike that they can’t meet. The post-Christmas shortage was simply due to harvest delays caused by wet weather and fires in WA causing transport delays,” he said.

A break in harvesting and rain in New Zealand has also hampered supply.

Hospitality asked its followers on Facebook what they’re paying for avocados at the moment, and the general consensus was that they’re paying too much.

Ian Telley said “$64 to $102 a tray. The worst its been in 50yrs” while other prices included $80 per tray, $75 per tray and even $100 per tray.

Leigh Roberson, executive chef from Quay West Suites, said he was paying “way too much” at $90 a tray, when this time last year he was paying $32 per tray.

Julio Azzerello from Gourmand Providore told Hospitality that prices today range from $3 to $4 each – "markedly different to the regular $2 and sometimes lower mark."

"There seems to be two theories on the price increase. The first being a simple supply and demand factor not being managed as well as it has been in previous years. An underestimation on Christmas demand has eaten into January and probably February/March stock," he added.

The bigger issue, he said, is that some suppliers are locked in to certain prices. "The problem we face with a few of our customers is that they are locked into a yearly tendered price. In this instance, product has been sold under its cost price, putting quite a strain on our overall Cost Of Goods Sold."

Azzarello expects prices to return to "some kind of normality" in a few months, when Queensland's production is in full swing.

"In the meantime, chefs should be aware of the impact that avocados are making on the menu and monitor their usage levels to only meet the demands of the business. The short answer is to cut down rather than stop buying," he said.