In 2009-10 the California Avocado industry had one of the largest crops on record with 534.5 million pounds of California Avocados. At an average price per pound of 75.4 cents, the California industry achieved the highest-gross crop value in its history, at nearly $403 million.

California Avocado Industry Five Largest Crop Years Ranked by Total Crop Value

The higher than anticipated revenues, coupled with prudent spending, increased the California Avocado Commission’s (CAC) reserves in 2009-10 allowing CAC to propose a budget that will invest more than $14 million toward California Avocado marketing, research and additional projects to advance the industry in 2010-11.

2010-11 Proportion of CAC Budget by Department

In addition to adopting the proposed 2010-11 budget, the Board of Directors approved a significant reduction in the assessment-rate for 2010-11, from 1.95 percent to 1.60 percent, an 18 percent reduction from 2009-10 and a near 40 percent reduction from 2008-09.

CAC Assessment Rate Reductions

0.0

0.5

1.0

1.5

2.0

2.5

3.0

CAC Assessment Rate Reductions

2.62%

‘07 - ‘08

2.62%

‘08 - ‘09

1.95%

‘09 - ‘10

1.60%

‘10 - ‘11

‘07 - ‘08 ‘08 - ‘09 ‘09 - ‘10 ‘10 - ‘11

2.62% 2.62%

1.95%

1.60%

Elevating Outreach to California Avocado GrowersIn 2010 CAC took significant strides in overhauling grower communications. In order to transform Commission operations to bring further value to avocado growers, CAC staff spent time in the field, including one-on-one meetings with growers and industry stakeholders.

Through grove tours demonstrating measures to ensure food safety, the workings of ET controllers and organic operations, CAC staff left each grove visit more educated and better equipped to provide support. Having a more connected staff and grower relationship helps CAC anticipate the needs and priorities of the growers; with the overall goal of creating a more productive California Avocado industry while supporting the premium California brand.

CAC began addressing the needs of California Avocado growers by overhauling various grower communication vehicles, including:• A new grower website and Greensheet; allowing growers

to more easily access pertinent information, with emphasis on grower-focused and production research information: CaliforniaAvocadoGrowers.com

• Cultural management assistance, through Grower Fact Sheets, videos and educational handouts

• Field days and Grower Seminar Series

Industry AffairsThrough a proactive approach on critical issues, CAC achieved some notable successes in 2010; such as securing economic value, alleviating regulatory burdens and improving industry competitiveness for avocado growers throughout the state. Topping the list of issues were water, invasive pests and food safety; concerns that will likely remain in 2011 and beyond, requiring continual Commission involvement on behalf of growers.

Below is a snapshot of some of the accomplishments in 2010:

• Extension of the Special Ag Water Rate (SAWR) for avocado growers in San Diego County Water Authority’s service area: As a result of advocacy by CAC and avocado industry members, the Water Authority Board unanimously voted to extend the SAWR through December 31, 2012. This hard-fought extension is valued at nearly $5 million annually to avocado growers in the Water Authority’s service area

• Removal of Hass Avocados from Medfly Host List: As a result of CAC’s efforts, the USDA removed Hass Avocados from the Medfly host list in April 2010. Consequently, growers under Medfly quarantine are no longer required to apply pre-harvest bait treatments to Hass Avocados before movement

• California Avocado Good Agricultural Practices (GAP) Manual and Standard: Upon directive from the Board, CAC and the GAP Committee, in conjunction with growers, handlers, the citrus industry and auditing bodies, have worked continually towards producing the official California Avocado Industry GAP Standard. Significant progress has been made and in 2011 CAC plans to introduce the manual and standard to avocado growers and industry stakeholders

More highlights on marketing, industry affairs and production research will be included in CAC’s 2009-10 Annual Report, soon to be announced in The Greensheet: CaliforniaAvocadoGrowers.com/the-greensheet. Visit CaliforniaAvocadoGrowers.com/marketing-program to view monthly reports of the CAC’s marketing accomplishments.

In 2009-10 CAC facilitated many one-on-one and small group grower meetings to foster interactive communication. Here CAC President Tom Bellamore meets with growers Bob Staller and Alan Cavaletto.

Year MM LBS Price per LB Total Crop Value $MM

09/10 534.5 75.36 402.705/06 600.9 56.78 341.292/93 569.8 20.70 117.986/87 555.6 16.90 93.983/84 492.5 18.50 91.1

12 Mauchly, Suite L Irvine, California 92618-6305 | (800) 344-4333 | CaliforniaAvocado.com

7% Industry Affairs

10% Production Research

19% Administration

64% Marketing

2010-11

AVOCADO COMMISSION HIGHLIGHTS

2009-10

2009-10 CALIFORNIA AVOCADO COMMISSION HIGHLIGHTS 14 HAND GROWN IN CALIFORNIA

2010 Retail Coveage

Consumer Advertising in 2010Consumer advertising is a pillar of CAC’s marketing investment designed to position California Avocados as premium in order to optimize value for California Avocado growers. Radio, print ads in regional magazines such as Sunset, outdoor billboards in high-traffic

areas, fitness center posters and grocery cart ads in core markets positioned California Avocados as top of mind with consumers.

CAC also advertised nationally in culinary and lifestyle magazines such as Cooking Light, Eating Well, Saveur and in online media. The combination of advertising delivered 1.1 billion consumer advertising impressions in 2009-10, which was a 49 percent increase over 2008-09.

Public RelationsCAC encourages consumer purchase and demand (awareness and preference) for California Avocados with extensive public relations outreach. The 2009-10 campaign included California Avocado grower stories focused on local farming and community, a cadre of artisan chefs who promoted the versatility and premium quality of

California Avocados and nutrition communications. Key messages in 2009-10 included information about the concentration of beneficial carotenoids in California Avocados, the use of avocados as a fat replacement in baking and suggesting avocados as a first food for babies and toddlers.

Online Marketing and Social MediaA fresh design of CAC’s consumer website, CaliforniaAvocado.com, encourages expanded avocado usage through featured recipes and nutrition information. In 2010 CAC fully engaged with California Avocado fans on social media, with posts, photos and videos on Facebook, Twitter, YouTube and Flickr. Social media interactions measure more than half a million impressions per month. CAC’s Facebook page launched in March 2010, and California Avocados gained more than 51,000 fans by the end of October.

Several of the nation’s largest contract feeders and 19 operators with more than 9,700 locations featured dynamic California Avocado promotions.

The California Avocado Grower Campaign elevated California branding in-store at retail.

Celebrity Chefs Susan Feniger and Mary Sue Milliken demonstrate California Avocado recipes to influential media and food bloggers at a pre-Cinco de Mayo event. The chefs and CAC Cinco de Mayo Public Relations efforts received over 185 million impressions.

Trade (Retail and Foodservice) HighlightsThe core strength of CAC’s retail program is the personal contact CAC’s Merchandising team has with key retail accounts and their ability to utilize the Commission’s data assets to demonstrate California Avocado contribution and profitability at retail. The Merchandising team also leverages CAC’s consumer advertising to achieve prominent quality displays, feature ads and promotional activity in season.

For foodservice accounts that already use Fresh California Avocados, CAC created programs and menu concepts to encourage greater usage during the season. Summertime promotions with Subway, Baja Fresh and others were among the successes in 2010. The Commission also used menu planning to develop foodservice accounts that added California Avocados to their operations for the first time, thus expanding distribution.

In 2010 CAC called on key decision-making retailers across the country.

Production Research/Technical InvestmentIn 2010 CAC’s Board of Directors affirmed that research and development must remain a Commission cornerstone and that room for improvement exists. The Board identified the need for CAC’s research program to evolve, becoming closely aligned with CAC’s future vision and strategic needs. To achieve these goals, the Board put in place plans for a new production research and science management review process in which they will tackle setting high level goals and objectives, to integrate science with grower and marketing needs. The new review process and accountability system, set to roll out in 2011, will support CAC’s strategic priorities, and strengthen California Avocado grower competitiveness, sustainability and profitability.

Jonathan Dixon, internationally recognized avocado expert who has made notable scientific contributions to the global avocado industry, joined CAC as research program director.

Marketing: Energizing the California BrandThe California Avocado Grower Campaign serves as a key component of the Commission’s marketing effort, contributing to CAC’s success in increasing brand awareness and consumer preference for California Avocados. The percent of shoppers who look for country of origin and care that avocados are U.S. grown has increased with “importance of U.S. grown” up from 43 percent in 2006 to nearly 70 percent of avocado consumers in fall 2010*.

*Source: Avocado Tracking Study Fall 2010

A top priority of the 2009-10 business plan was achieved with successful strengthening of brand and attribute ratings.

0 20 40 60 80 1000 20 40 60 80 100%10 30 50 70 90

Taste

Freshness

Premium Quality

Food Safety

Environmentally Responsible Farming

Fair Labor Practices

0%

20%

10%

30%

40%

50%

60%

70%

80%

90%

100%

Tast

e

Fres

hnes

s

Prem

ium

Qua

lity

Food

Saf

ety

Envi

ronm

enta

lly R

espo

nsib

le F

arm

ing

Fair

Labo

r Pra

ctic

es

Total U.S.% of Consumers Who Rate California Avocados Higher than Other Origins on…

©2010 Doctor’s Associates Inc.SUBWAY® is a registered trademark of Doctor's Associates Inc.

*Regular 6" sub on 9-Grain, wheat or Italian bread without cheese or condiments that contain fat. SUBWAY FRESH FIT® is not a diet program.

2009-10 CALIFORNIA AVOCADO COMMISSION HIGHLIGHTS 32 HAND GROWN IN CALIFORNIA

California Avocado Corporate Accounts