Oxnard, Calif.-based Mission Produce recently made its initial public offering, and the S-1 document it filed with the SEC as part of that process — plus a listing day interview with chief operating officer Mike Browne — provided insight on some of the opportunities the company is looking to pursue in the coming years.
Mission, listed under the AVO symbol, offered 8 million shares of its common stock to the public at $12 per share, and the underwriters were granted a 30-day option to purchase an additional 1.2 million shares from the company, according to a news release.
“We look at today as really just flipping the page to a new chapter of this company,” said Browne, who spoke with The Packer for a podcast on the company’s listing day, Oct. 1. “Mission’s been at it for almost four decades. There’s a lot more to come. We’re going to continue to grow this company around the globe and be laser-focused on fresh avocados.”
Browne provided some context on why the company chose to go public, a move that isn’t particularly common in the fresh produce industry.
“The idea of going public, I think, is more to give the company some flexibility in its growth strategy and some elasticity in its financial strategies, whether that be balance sheet-related or acquisition-related,” Browne said.
“There’s growth in the public market, there’s a great deal of interest in investing in food — people have to have it, and I think we’ve kind of proved that through this COVID journey,” Browne said. “The timing has been very good for us to do things now. Our farms, many of them are coming into maturity, and our capabilities within our network are ready for this, so we’re really excited.”
The domestic market for hass avocados was $6.5 billion in 2019, with an expected compound annual growth rate of 5.5% from 2019 to 2023, according to the S-1 document Mission filed Sept. 4 with the Securities and Exchange Commission. The global market for avocados was $13.5 billion in 2018 with a projected CAGR of 5.9% from 2018 to 2026.
Drivers of the avocado industry in the U.S. include heightened interest in health and wellness among many demographic groups and particularly strong demand for avocados among millennials and Hispanics, two growing segments of the population.
Mission asserted in its S-1 document that Europe and Asia are also primed for growth.
“In Asia, it’s been a matter of access,” Browne said. “As these markets become more accessible ... we’ve seen great success in Korea, China as you know is growing, Japan continues to be a great consumer, a great supporter of our category.”
Mission has been in Japan for more than 35 years and in China and Korea for more than five years, according to the S-1.
“We expect to maintain and strengthen our relationships with distributors in Japan and Korea, and we believe our existing Chinese distribution facilities will serve as a platform upon which we can continue to build out our avocado distribution network,” Mission wrote in the document.
While access has been the key issue in Asia, establishing ripening infrastructure is a critical piece of the puzzle in Europe, Browne said. For avocados to be a viable impulse purchase, they have to be ready to eat.
Mission’s S-1 filing gave more insight into the company’s vision for growth in that market.
“We plan to expand our distribution capabilities throughout Europe to support new direct retail relationships,” Mission wrote in the document. “We will also increase our exports from Peru, Guatemala, Colombia and other regions to provide balance to our year-round supply and to capitalize on the growing demand for avocados throughout Europe.
“In addition, we believe our seasonal customer programs will help us continue to build our existing relationships and attract new customers across Europe,” Mission wrote. “As we continue to expand throughout the region, we believe our growing scale will enable us to make more direct, ripe and bulk deliveries of our avocado produce to retail customers.”
Another market mentioned in the S-1 as one targeted for further development is Chile.
“We believe Chile represents an attractive opportunity for growth as one of the world’s top avocado-consuming countries, and we believe we are well positioned to be a long-term provider of avocados in the region,” Mission wrote.
