Are Supply Chain Wins Enough to Fuel AVO's Next Growth Phase?

Mission Produce, Inc. AVO delivered a standout second quarter in fiscal 2025, fueled by strong execution in its global sourcing and distribution network. Supply chain wins, particularly the company’s ability to navigate Mexico’s seasonal volatility and leverage alternative origins like California and Peru, played a central role in maintaining service levels and meeting customer commitments. This operational agility not only preserved volumes amid pricing fluctuations but also reinforced AVO’s position as a reliable partner. The company’s long-cultivated grower relationships and investment in ripening and distribution infrastructure enabled it to sustain quality and size consistency, helping retail demand remain resilient even at elevated price points.

While these supply chain efficiencies have underpinned near-term success, Mission Produce’s growth ambitions extend well beyond cost and logistics gains. The company is applying its avocado playbook to emerging categories like mangoes and blueberries, where it is leveraging existing customer relationships, operational flexibility and programmatic sourcing to capture market share. The fiscal second quarter saw mango volumes reach record highs, which propelled AVO to the second position among U.S. distributors.

The key question is whether operational wins alone can drive the “next growth phase” or if broader strategic moves will be necessary. While supply chain strength remains a durable competitive advantage, future expansion will likely depend on accelerating category diversification, expanding global market penetration and capitalizing on increased production from Peruvian orchards, which are expected to deliver a 150% volume rebound this year. If AVO can pair its logistical mastery with brand-building and market development in high-potential categories, it could transform short-term operational gains into sustained, multi-year growth momentum.

AVO Faces Stiff Competition From CVGW & FDP

Calavo Growers, Inc. CVGW and Fresh Del Monte Produce Inc. FDP are two key competitors in the fresh produce industry, each leveraging distinct strategic advantages. 

Calavo has built its reputation on strong supply chain execution, anchored by deep ties to Mexican growers, advanced packing operations and a robust distribution network. These capabilities allow CVGW to consistently deliver high-quality avocados to retail and foodservice customers, even in volatile market conditions. While these supply chain strengths have supported steady performance, Calavo’s next growth phase will likely require more than just operational reliability. Expanding value-added products, deepening international market penetration and enhancing brand-driven consumer engagement could be key to sustaining long-term momentum.

Fresh Del Monte boasts one of the most extensive global supply chains in the produce industry, with a vertically integrated model that spans farming, shipping, ripening and distribution. This scale enables FDP to efficiently source and deliver a wide range of fruits, including avocados, across multiple continents. However, while its logistics expertise and cost advantages are clear strengths, future growth will hinge on how effectively it can diversify into higher-margin categories, capture more value through product innovation and leverage its cross-selling opportunities in retail.

AVO’s Price Performance, Valuation & Estimates

Shares of Mission Produce have gained 16.9% in the last three months compared with the industry’s growth of 6.3%.

From a valuation standpoint, AVO trades at a forward price-to-earnings ratio of 24.81X, significantly above the industry’s average of 14.76X.

The Zacks Consensus Estimate for AVO’s fiscal 2025 and 2026 earnings suggests a year-over-year decline of 20.3% for both years. The estimates for fiscal 2025 and 2026 have been unchanged in the past seven days.

AVO stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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