Four days after launching the FreshRealm LLC on-demand delivery platform, Calavo Growers Inc. posted record profits for the second consecutive quarter.
The results for the fiscal 2014 third quarter, which ended July 31, included profit of $8.4 million, a 31.6% increase year to year, according to the financial statement of the Santa Paula, Calif., company.
The Sept. 9 report followed an announcement that FreshRealm, which Calavo founded last year, signed Nutrisystem Inc. as the first merchant to use its food preparation and delivery platform. The test began the first week of September in California, according to a news release.
Calavo’s third quarter got a $10 million boost when the company sold part of its 70% interest in FreshRealm to Impermanence LLC. Calavo retained 50% ownership of FreshRealm and named Peter Hajas to lead the FreshRealm board. Michael Lippold, formerly Calavo’s director of strategic development is now CEO of FreshRealm.
Another factor giving the third quarter “a historic high for any single period in company history” was the company’s Mexican avocado business, Lee Cole, Calavo president and CEO, said in the quarterly report.
“Our strong, profitable supply of fresh avocados from Mexico during the third quarter enabled the company to offset this year’s small California harvest without missing a beat,” Cole said in the quarterly report.
Calavo’s Renaissance Food Group LLC also had record numbers for the quarter. Revenue was up 31% and gross margin for RFG was up 300 basis points year-to-year.
Cole predicted the final quarter of Calavo’s fiscal year will conclude an overall record-setting year. In May, when Cole announced Lippold as CEO of FreshRealm, he predicted similar success for the new venture.
Calavo’s new realm
“Lippold took the FreshRealm idea from inception to where it is today,” Cole said in May. “He brings the skill sets and the vision at the optimal moment to make a major impact on the way we distribute, purchase and consume fresh food.”
The FreshRealm platform promises food from the field to the table in two days, according to the company’s website. It does not sell direct to consumers. Calavo’s RFG will supply products to FreshRealm.
“As a FreshRealm Food Maker, RFG will allow Merchants to offer freshly prepared, made on demand breakfasts, lunches, snacks, meal kits, fresh-cut fruits and vegetables delivered direct to consumer’s doorstep through the FreshRealm platform.
“FreshRealm’s technology platform will allow participants such as traditional retailers, large and small enterprises, communities and food banks to plug in to an ecosystem resembling a national fresh food cooperative,” according to the website.
A crucial element in the FreshRealm platform is the “Vessel,” a patent-pending shipping container that keeps fresh produce and other food cold, said Lippold. He said the containers fit “within standard delivery guidelines” for size and weight.