Dive Brief:
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Mission Produce, Inc. delivered back-to-back record quarterly earnings this year driven by strong consumer demand, and is looking to maintain momentum after El Niño conditions impacted avocado groves in Peru.
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Operating profits totaled $20.2 million in the second quarter, an increase of 165% over last year. The company also reported improved cash flows as it advances cost savings efforts to offset anticipated losses in the back half of 2024.
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CEO Stephen Barnard said in an earnings call the company is in a strong position to remain competitive as global avocado supply dwindles. Mission is looking to source from third-party suppliers in other regions to mitigate its avocado shortages.
Dive Insight:
Unseasonably high temperatures in part driven by El Niño conditions have stunted fruit development and reduced sizes across the Peruvian growing region, impacting global avocado supplies. The supply crunch, combined with rising consumer demand, has caused avocado prices to rise, boosting Mission's bottom line.
Unit sales prices were up 22% versus the prior year, Barnard said. To make up an anticipated avocado shortfall, Mission will rely on purchasing from suppliers outside of Peru.
“We expect to utilize the strength of our world-class sourcing team to access other third party fruit to augment the shortages from Peru and meet customer demand during the Mexican low-season,” Barnard said.
The company is also advancing its efforts to cut costs and expenses. After implementing its plan in the first quarter, Mission is on track to realize $10 million in annual cost savings. This ongoing strategy coupled with strong avocado margins have yielded positive earnings results year to date.
Mission’s total revenue increased 35% to $298 million in the second quarter, and was also bolstered by an extended blueberry harvesting season and the company’s expanding mango operations.
Additionally, Mission is entering new markets such as Europe and Asia, and just completed the buildout of a distribution center in the U.K. with cold storage space and ripening rooms for mangos.
“Mission remains in great position with our diversified network of global assets,” Barnard said.
