Mission buys interest in Henry Avocado as two firms eye the future
Mission buys interest in Henry Avocado as two firms eye the future
Mission Produce Inc. in Oxnard, CA, has announced that the shareholders have purchased a 49 percent interest in Henry Avocado Corp. As a result, the two companies have formed a strategic alliance.
"Initially, we are going to be sharing fruit and information and talking everyday," said Steve Barnard, president and chief executive officer of Mission.
"The plan right now is to continue to operate the two firms separately as they have in the past," said Phil Henry, president of Henry Avocado. "But we will be looking at how we can create efficiencies in both distribution and marketing."
In separate interviews with The Produce News, the two presidents agreed that there would almost undoubtedly be future announcements concerning the continued alliance of the two firms.
In fact, in the press release jointly distributed by the two companies, consolidation was a theme touched upon by Ross Wileman, vice president of sales and marketing at Mission. "In these times of consolidation in the produce industry, this move will be good for all Mission and Henry customers," he said. "Our ability to service our customers has been greatly enhanced by the increased volume of fruit we will have on a year-round basis. Last year, with a short crop and tight supplies in California, we were limited in our new customer growth. This move broadens our base of California fruit availability."
Messrs. Henry and Barnard said that the combined sales of the two companies are right around the $250 million level, with Mission providing about two-thirds of that total. "I'd say that combined we represent about 30 percent of domestic avocado sales," said Mr. Henry.
The Mission executive agreed with that number, but said that market share is always a moving target as volume in the avocado industry can fluctuate significantly among the three major production areas: California, Mexico and Chile. This alliance, however, helps the two firms hedge their bets as their volume originates from different regions in California and they largely work with different foreign suppliers. Henry produces most of its California volume in San Diego County, while Mission is strongest in Ventura and Santa Barbara counties. Henry works with one grower-shipper in Chile, and Mission works with that same shipper as well three others. Mission is among the larger importers of Chilean avocados, and the firm also has strong connections in the Mexican production regions.
In the last few years, the U.S. Department of Agriculture has allowed Mexico into more U.S. markets, and it has been able to grow its market share in the United States. The avocado industry is pointing to a time in the not-so- distant future when it will sell 1 billion pounds of avocados domestically.
The two firms' domestic distributions are complementary rather that competing, according to the two executives. "We rarely compete in the same markets," said Mr. Barnard. Mr. Henry agreed and pointed out that each firm has several ripening facilities around the country but not in any of the same markets. "We have a facility in Escondido [CA] that allows us to reach San Diego, Orange County and Los Angeles," he said. "We also have a facility in San Jose that lets us cover Northern California and another one in Phoenix that allows us to service Arizona and New Mexico. Mission has ripening facilities in a number of different markets throughout the country -- Oxnard [CA], Denver, Chicago, New Jersey, Atlanta, Dallas and Seattle -- but not in those markets. We have a little bit of overlap in Los Angeles, but that's about it."
Mr. Barnard agreed and said that Henry's production was key to the deal for Mission. "With our ripening program, we have increased demand, but our growth has been limited by our production," he said.
Mr. Henry explained that Mission is very strong in the retail end of the business, while Henry Avocado has focused more heavily on the foodservice arena. Those two different customer communities tend to take fruit of different sizes. This alliance will help both firms supply their specific customers with the fruit sizes they need to fill an order. Mr. Henry said that another important component of the deal is the company's commitment to its employees and customers. Henry Avocado Corp. is a privately owned company that did have four owners: Mr. Henry, Don Hoey, Richard Opel and Victor Varvel. "Now we have five owners, though the fifth owner is 50 different shareholders, which gives us a broader-based ownership," he said. "As each of us looks down the road at retirement, this allows us to take care of both our customers and our employees. That's very important to us."
While Mission can help Henry in marketing and distribution, Mr. Henry believes his company can help Mission on the growing end of the deal. "We have a farm management business and they do not. That will add value from our end," he said.
"Initially, we are going to be sharing fruit and information and talking everyday," said Steve Barnard, president and chief executive officer of Mission.
"The plan right now is to continue to operate the two firms separately as they have in the past," said Phil Henry, president of Henry Avocado. "But we will be looking at how we can create efficiencies in both distribution and marketing."
In separate interviews with The Produce News, the two presidents agreed that there would almost undoubtedly be future announcements concerning the continued alliance of the two firms.
In fact, in the press release jointly distributed by the two companies, consolidation was a theme touched upon by Ross Wileman, vice president of sales and marketing at Mission. "In these times of consolidation in the produce industry, this move will be good for all Mission and Henry customers," he said. "Our ability to service our customers has been greatly enhanced by the increased volume of fruit we will have on a year-round basis. Last year, with a short crop and tight supplies in California, we were limited in our new customer growth. This move broadens our base of California fruit availability."
Messrs. Henry and Barnard said that the combined sales of the two companies are right around the $250 million level, with Mission providing about two-thirds of that total. "I'd say that combined we represent about 30 percent of domestic avocado sales," said Mr. Henry.
The Mission executive agreed with that number, but said that market share is always a moving target as volume in the avocado industry can fluctuate significantly among the three major production areas: California, Mexico and Chile. This alliance, however, helps the two firms hedge their bets as their volume originates from different regions in California and they largely work with different foreign suppliers. Henry produces most of its California volume in San Diego County, while Mission is strongest in Ventura and Santa Barbara counties. Henry works with one grower-shipper in Chile, and Mission works with that same shipper as well three others. Mission is among the larger importers of Chilean avocados, and the firm also has strong connections in the Mexican production regions.
In the last few years, the U.S. Department of Agriculture has allowed Mexico into more U.S. markets, and it has been able to grow its market share in the United States. The avocado industry is pointing to a time in the not-so- distant future when it will sell 1 billion pounds of avocados domestically.
The two firms' domestic distributions are complementary rather that competing, according to the two executives. "We rarely compete in the same markets," said Mr. Barnard. Mr. Henry agreed and pointed out that each firm has several ripening facilities around the country but not in any of the same markets. "We have a facility in Escondido [CA] that allows us to reach San Diego, Orange County and Los Angeles," he said. "We also have a facility in San Jose that lets us cover Northern California and another one in Phoenix that allows us to service Arizona and New Mexico. Mission has ripening facilities in a number of different markets throughout the country -- Oxnard [CA], Denver, Chicago, New Jersey, Atlanta, Dallas and Seattle -- but not in those markets. We have a little bit of overlap in Los Angeles, but that's about it."
Mr. Barnard agreed and said that Henry's production was key to the deal for Mission. "With our ripening program, we have increased demand, but our growth has been limited by our production," he said.
Mr. Henry explained that Mission is very strong in the retail end of the business, while Henry Avocado has focused more heavily on the foodservice arena. Those two different customer communities tend to take fruit of different sizes. This alliance will help both firms supply their specific customers with the fruit sizes they need to fill an order. Mr. Henry said that another important component of the deal is the company's commitment to its employees and customers. Henry Avocado Corp. is a privately owned company that did have four owners: Mr. Henry, Don Hoey, Richard Opel and Victor Varvel. "Now we have five owners, though the fifth owner is 50 different shareholders, which gives us a broader-based ownership," he said. "As each of us looks down the road at retirement, this allows us to take care of both our customers and our employees. That's very important to us."
While Mission can help Henry in marketing and distribution, Mr. Henry believes his company can help Mission on the growing end of the deal. "We have a farm management business and they do not. That will add value from our end," he said.
