We’ve all heard the stereotype. Millennials eat avocado toast (so say the older generations). The uncharitable version is that they can’t afford other things like cars, houses, etcetera due to their expensive consumption habits otherwise. And avocado on toast is the standard bearer for that spendthrift consumption.
I’m here to tell you that it’s bunch of nonsense and that the older folks are just jealous. Millennials, those born between 1981 & 1996, weren’t intrinsically destined to spend their money poorly as some generational sense of entitlement. Nor did the financial crisis imbue them with the mass desire for small but still affordable treats. The reason that millennials got the reputation for eating avocado on toast is that 1) it’s true, 2) because they could afford it, and 3) older generations didn’t even have access.
First, let’s give the older generations their due. What does the data say (from the California Avocado Commission)? The price of avocados in the US began a steady march upward starting in the late 80s. By the time of the dot-com bubble, the price of avocados was 3 times what it had been in the 70s and 80s. The below left figure is the price per pound of avocados. And wages were not keeping up. The figure below right illustrates number pounds that the median person ages 16-24 could afford in a week. Starting at the end of the 90s, avocados became permanently less affordable. Millennials chose to start eating avocados exactly when they became less affordable.
But, hold on just a second. The rise in the price of avocados was not the only thing changing during that period. After all, the law of demand says that higher prices result in a lower quantity purchased *all else constant*. So, what else wasn’t constant? The affordability index already accounts for income, so that’s not the difference. The change wasn’t due to improved avocado productivity. Below left is total US output and below right is output per acre. And the trend is a whole lot of nothing.
Avocado prices were volatile, but the trend was flat relative to other goods. One possible hint is that Americans were spending less on food overall – so maybe more of their budget could be allocated to avocados? Maybe.
But what about outside the US? The figure above left shows us two things. 1) It’s close, but the average price of avocados relative to other foods was lower in the new millennium than it had been in the 90s (though, not nearly as low as in the early 80s). And 2), the price of avocados substantially stabilized. We can see that in the relative price and in the affordability graph. The relevance of price stability is that culture doesn’t coalesce around goods that have sudden changes in affordability. If the new millennium was going to be the avocado’s moment, then it wasn’t going to happen if there wasn’t dependable access.
Speaking of access, more convincingly, avocados are far more of a national food than they were in past decades. Before the North American Free Trade Agreement took effect in 1994, Mexican avocados imports were banned. Now, the vast majority of avocadoes come from Mexico and other countries. For example, in the current season, US producers have harvested only 37 million pounds so far. Contrast that with the 461 million pounds that have been imported. Parents of millennials often didn’t have the opportunity to buy avocados, much less the luxury of buying them year-round.
That’s the answer. Millennials eat avocados, not because they’re bougie. Rather, it’s because they have access to their fellow man across the southern border. They eat guacamole and avocado toast because it’s available and tasty. The tastiness didn’t change over time. The horizon of their pallet was limited by the extent of the market.
