Mission Produce launches IPO
On Thursday, Oct. 1, Oxnard, CA-based Mission Produce Inc. began its journey as a public company with the initial public offering of 8 million share of its common stock on the NASDAQ Stock Market under the symbol AVO. The IPO opened at $12 and closed on its first day at $13.80, an initial one-day gain of 15 percent.
Mission Produce Chief Operating Officer Mike Browne called it an “exciting day” for the company and a logical step to take the organization to the next level. Mission Produce self-identifies as the largest distributor of avocados in the world with its 2019 volume of 559 million pounds being almost 60 percent more than its closest competitor.
Browne said taking the company public, which is largely seen as a move to generate significant capital, will allow the company to continue to grow in a responsible way both organically and through acquisition where opportunities present themselves. He said the company intends to remain “laser focused on avocados” and is not looking to diversify its product line. In fact, he said diversification presents its own challenges and Mission has achieved its success largely by solely concentrating on the avocado.
Mission Produce has aggressively created a vertically integrated operation in Peru as it owns 10,000 acres, of which more than 8,300 acres are currently in avocado production. The remaining land is expected to be planted over the next several years. Browne indicated that the company would employ that same strategy as it further explores opportunities in Europe, Asia and South Africa.
He said that on the marketing side, the avocado still has much room for growth with Europe and Asia’s consumption levels being where the United States was 20 years ago. But he added, the U.S. still has much room for growth as well with the continuing increase in consumption from millennial and Latin populations. He said the explosion in the demand in the avocado category “defies gravity” and points to the need for increased supply.
Produce industry companies have not had a long history of success being publicly traded, though Browne spent many years at Calavo Growers Inc., another publicly traded avocado-centric firm and its stock has performed relatively well. He admitted that public companies are judged on a quarter over quarter basis, which is not always in sync with a produce company that must continually deal with seasonal and weather impacts. “They key is you have to manage expectations,” he said, indicating that Mission’s geographic diversity does create a relatively stable financial environment.
He said the company, which was founded by CEO Steve Barnard in 1983, sells its fruit in 25 countries and sources from 11 countries. It has four packing facilities in the United States, Mexico and Peru, 11 distribution and ripening centers across the United States, Canada, China and the Netherlands, and three sales offices in the U.S., China and the Netherlands.