AVO Bets on Direct-to-Retail in Europe: Too Soon or Just Right?

Mission Produce, Inc. AVO is making a calculated push into Europe, betting that direct-to-retail partnerships can replicate its U.S. success in a market still developing its avocado consumption base. The company’s U.K. facility has already started to gain traction, with European sales rising 37% year over year in third-quarter fiscal 2025, reflecting deeper retailer penetration and improved utilization. For AVO, the move is not just about chasing growth but also about anchoring itself closer to consumers in markets where per capita avocado consumption is steadily climbing.

AVO is leveraging its vertically integrated supply chain, particularly from Peru and Mexico, to provide European retailers with the same year-round consistency and promotional programming it has refined in the United States. The emphasis is on direct-to-retail relationships with large grocery chains, which demand stability in quality, pricing and supply. By focusing on a handful of top customers, the company aims to maximize scale efficiency, enhance category profitability for retailers and position itself as the preferred partner in a fragmented competitive landscape. This strategy minimizes reliance on intermediaries, allowing AVO to capture more margin while tightening its value proposition.

The timing of this European bet may prove crucial. While the market opportunity is clear, Europe remains smaller than the United States in absolute volume, raising questions about how much of a growth lever it can be in the near term. Still, AVO is planting a flag early, positioning itself for long-term gains as avocado consumption continues to rise. If execution remains strong, the company’s European direct-to-retail strategy could serve as a model for expansion into other international markets such as Asia. For now, the question is less about “too soon” and more about whether the company can maintain its operational edge and replicate its U.S. playbook abroad.

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 Growers has built its reputation as one of the leading global avocado marketers, with strong ties to growers in Mexico and California. The company’s vertically integrated model supports its Fresh Products, Renaissance Food Group and Calavo Foods segments, allowing it to diversify beyond avocados into prepared foods, guacamole and fresh-cut produce. Calavo’s strength lies in its deep grower relationships, extensive distribution network and ability to supply high-quality avocados consistently to retail and foodservice customers.

Fresh Del Monte is a diversified multinational produce company with a broad portfolio spanning bananas, pineapples, melons and fresh-cut fruit, alongside its growing avocado and fresh vegetable businesses. With vertically integrated farming operations across Latin America, a strong shipping and logistics backbone and established distribution in Europe, Asia and the Middle East, FDP brings scale and reach that few competitors can match. Its ability to leverage global infrastructure to move fruit efficiently gives it an edge in servicing retailers and foodservice clients across multiple regions.

AVO’s Price Performance, Valuation & Estimates

Shares of Mission Produce have gained 2% in the last three months against the industry’s decline of 1.4%.

From a valuation standpoint, AVO trades at a forward price-to-earnings ratio of 25.46X, significantly above the industry’s average of 14.68X.

The Zacks Consensus Estimate for AVO’s fiscal 2025 and 2026 earnings suggests a year-over-year decline of 9.4% and 28.3%, respectively. The estimates for fiscal 2025 and 2026 have moved northwards in the past 30 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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