Tom Gresham
Guacamole has arrived, and it’s not going anywhere. Once largely just a fixture at Mexican and Tex-Mex restaurants, guac has firmly established itself in the mainstream, including becoming a staple of supermarket delis and household refrigerators.
Growth is expected to continue for the dish. The global guacamole market is projected to increase at a compound annual growth rate (CAGR) of approximately 7% through 2031, reaching a value of $2.3 billion, according to Persistence Market Research. Of particular interest, demand in the U.S. is expected to climb more than 6%.
Justice Davis, associate brand manager at MegaMex Foods, makers of Wholly Guacamole, said guacamole in the deli area, in particular, “continues to be on-trend and growing.”
“We know that there will be a consistent need for our products to meet every eating occasion, from snacking to gathering, and every desire, from Tex-Mex to authentic,” Davis says.
Kamila (Dabkowska) De Maria, associate director of marketing at Sabra, says the guacamole category has seen “tremendous growth” in recent years and is showing no signs of slowing down.
“The majority of growth is coming from packaged guacamole,” De Maria says. “Guacamole is an incredibly versatile product with usage spanning from snacking to spreading to meal accompaniment.”
Avocados’ Strength
The guacamole market is boosted in no small part by the continuing popularity of avocados. A previously overlooked produce, avocados have become commonplace on restaurant menus and assumed a more prominent place in grocery stores’ produce aisles. In addition to the taste, avocados’ appeal can be traced to a broadening awareness of its litany of health benefits, which include supplying heart-healthy monounsaturated fats and antioxidants, being rich in fiber and serving as a “nutrient booster” that helps increase the absorption of fat-soluble nutrients such as vitamins A, D, K and E, according to the California Avocado Commission, based in Irvine, CA.
Fans of the avocado know they can get that same taste and health benefits from guacamole.
“The popularity of avocados has translated to love of guacamole,” De Maria says. “Not all consumers feel adept at making their own guacamole, which helps drive packaged guacamole growth.”
In addition to avocados’ popularity, the Mexican food market in general continues to prove strong, including projected growth of 6.7% CAGR from 2021 to 2026, according to Technavio.
Prepackaged guacamole initially trailed avocados’ growth in the marketplace, but the market took off in the last decade with the more widespread use of high-pressure processing, a cold pasteurization technique, to package guacamole. According to Doral, FL-based Hiperbaric, a company that specializes in the process, the emergence of high-pressure processing allowed guacamole manufacturers to market a natural and preservative-free product that could be distributed on a global scale, extending the product’s shelf life and keeping the color, aroma and flavor intact, a particularly delicate prospect for avocado-based products, which can brown rapidly.
Increased Versatility
Guacamole’s inherent versatility is more widely appreciated today than it used to be, as consumers understand it’s not just a dip for tortilla chips or a topping on tacos or a burrito. For instance, it is being used more often on sandwiches and salads and to accompany meat and fish. It also is popular as a dip for vegetables, such as carrots, celery, broccoli and cauliflower.
As guacamole gains ground in the marketplace, it has prompted producers to experiment and innovate, particularly in developing creative new flavors and varieties to give consumers new, unique choices and to distinguish themselves from competitors.
“Guacamole manufacturers are focusing on increasing market share by investing in research and development to develop new flavors to suit consumers’ changing taste preferences and also acquiring trending labels,” according to a report from Persistence Market Research. “Manufacturers are constantly making efforts to increase sales across various regions.”
De Maria agreed that the guacamole category is encompassing a broader diversity of products.
“We’ve been seeing variety and innovation in the guacamole category,” De Maria says. “Consumers can choose their preferred heat level, texture (from smooth to chunky) or desired level of convenience for on-the-go with single-serve and snackers.”
Guacamole today comes in sizes ranging from small snack containers to larger tub-like containers geared toward parties, giving shippers multiple size options to consider depending on the occasion and planned use. For instance, MegaMex’s Wholly Guacamole brand has a 15-ounce bowl for gatherings, a 7.5-ounce for a family taco night and a 2-ounce mini that can work as a salad addition or as an after-school snack.
Similarly, Sabra strives to provide guacamole offerings for different occasions and preferences. De Maria says that includes 16-ounce “Classic with Lime and Mexican Street Corn” for hanging out with friends, 8-ounce “Classic and Spicy” for Taco Tuesday, “Classic and Spicy Singles” for a quick lunch, “Snackers” for on-the-go convenience and “Avocado Toast” for breakfast.
Guacamole attracts consumers who prize convenience, and consequently adults are taking single-serve packages to work and children to school as lunch and snack choices.
“The versatility that guacamole has to offer has enabled manufacturers to endorse their products as an easy, to-go food,” according to Persistence Market Research.
De Maria says guacamole is an apt match for the growing love of snacking.
“As consumers snack more—some recent data indicates that 50% of consumers prefer snacks to meals and 45% of U.S. consumers say they snack more than three times a day, with roughly half stating they eat snacks instead of meals—the formats within the guacamole have been growing to reflect this,” De Maria says.
Even with the rise of new varieties of guacamole, Persistence Market Research projects plain guacamole to maintain a dominant market value share of approximately 70% by 2031, largely due to its comparably lower cost than flavored versions. An abiding interest in traditional, authentic guacamole remains strong. For example, the Herdez Traditional Guacamole product is made with a recipe that originated with Fundación Herdez, a foundation in Mexico that hosts a library of traditional Mexican cuisines, Davis said.
Within the guacamole category, organic is seeing more interest and is expected to grow 8% in the next 10 years, according to Persistence Market Research.
“Rising awareness about environmentally stable cultivation practices and the need for natural and nutritious foods are steadily creating demand for organic-labeled foods,” according to Persistence Market Research. “Guacamole is no exception to this, even though the market share is less as compared to conventional guacamole. Still, [year-over-year] growth indicates optimistic growth for organic guacamole.”
Marketing and Merchandising
De Maria says marketing guacamole begins with emphasizing its combination of healthiness and flavor appeal.
“With guacamole, it is easy to lean into its best attributes: fresh taste and quality ingredients,” De Maria says. “Sabra Guacamole is made with premium ingredients like ripe, hand-scooped Hass avocados, tangy lime juice, cilantro and onion delivering on the taste that’s as close to homemade as it gets. We love to show our mouth-watering guac and its versatility for many occasions: as a dip with tortilla chips or fresh veggies, a staple in tacos or spread on toast.”
When merchandising guacamole in the supermarket deli, De Maria said the decision of where to place the guac is crucial. In particular, she said guacamole should be merchandised with “perfect pairings and great carriers,” such as tortilla or pita chips and salsa. She also said it is effective to merchandise guacamole as a time-saver and part of an overall meal solution, such as a Mexican-food night concept. Although guacamole can be made fairly easily at home, a packaged, high-quality solution will appeal to consumers in the store, particularly when merchandised and marketed alongside companion products.
“Location and placement are keys to success in the deli category,” De Maria says. “Shelving branded products across different formats is recommended. We find that when Sabra Guacamole is merchandised near Sabra Hummus it drives ‘stop-ability’ at the shelf.”
One strength of packaged guacamole is that it can spark sales for a range of reasons—fom impulse buys to planned meals, from personal snacking to large gatherings. Guacamole is an obvious choice for an in-store sampling arrangement to nudge consumers and remind them how much they like it as an option at home.
De Maria says the guacamole market in supermarkets has benefited from fewer restaurant visits for families.
“Many families plan to increase at-home dining or staycation to save money,” De Maria says. “Guacamole is great for every day, for family gatherings or to elevate any meal.”
Davis says MegaMex recognizes the importance of how guacamole is presented within the store toward its sales.
“Our category management team has category-centric insights dedicated to helping our retailer partners grow their business by ensuring they have optimal assortment, the correct category adjacencies in store and the right placement on shelf that allow consumers a more productive shopper experience,” Davis says. “There is always room to improve how to engage consumers on shelf through merchandising activity, promotions, or product placement.”
Guacamole surges in sales annually around certain occasions, particularly Cinco de Mayo, New Year’s Eve and the Super Bowl. Peak promotions in supermarkets are implemented around those guac-friendly holidays. Guacamole’s popularity as a party food encourages more people to try it and bring it into their own homes for personal use.
De Maria says all signs point to guacamole not just retaining the foothold it has managed to take in the marketplace but to build on its growth and become further entrenched as a routine part of many Americans’ diets.
“Guacamole is poised to continue its trajectory,” De Maria says.
