Mission Produce Eyes Mango Market: Smart Move or Risky Diversion?

Mission Produce, Inc.’s AVO strategic entry into the mango category is a calculated move that builds on its vertically integrated model and success in avocados. As part of a broader diversification plan, the company aims to leverage its established infrastructure, operational expertise and customer relationships to bring much-needed consistency and quality to a category that is significantly underrepresented in North America. Management sees parallels between the avocado market years ago and today’s mango market — both marked by supply fragmentation and variable quality. By enhancing standards and expanding supply, Mission Produce believes it can stimulate consumer demand and reshape perceptions of mangoes in the U.S. market.

The company's strategy is rooted in replicating the same vertically integrated framework used in its avocado operations. This includes applying robust sourcing from global origins, efficient packing and distribution, and strong retail partnerships. Mission Produce is positioning itself not just as a supplier, but as a category builder. Although the mango program is still in its early stages, initial results are promising. The company aims to use its advanced packing and distribution infrastructure to scale quickly while absorbing initial margin pressure as an investment in long-term market share gains. Its long-standing customer relationships across the grocery retail and foodservice sectors offer a natural channel for mango expansion.

Mission Produce is optimistic about the outlook for mangoes and other complementary fruits like blueberries, which also saw segment growth. The company’s confidence is grounded in growing consumer preference for healthy, convenient snacks and its ability to supply consistent, high-quality fruit year-round. The diversification strategy, spanning sourcing geography and product categories, is also meant to stabilize financial performance amid seasonal and geopolitical fluctuations (e.g., tariffs or regional weather impacts). Rather than a distraction, mangoes appear to be a thoughtful extension of Mission Produce’s core capabilities, adding a new vector for sustainable growth while enhancing asset utilization across its supply chain.

AVO’s Peer Comparison: CVGW & FDP

Calavo Growers, Inc. CVGW, has a strong foothold in the avocado market, but faces ongoing margin pressures due to its exposure to fluctuating input costs and limited diversification beyond avocados. However, the company is actively addressing these challenges through strategic restructuring aimed at streamlining operations, improving cost efficiency and enhancing profitability. Calavo also benefits from deep, long-standing grower relationships and a robust sourcing network that supports its ability to deliver high-quality avocados consistently. 

Fresh Del Monte Produce Inc. FDP benefits from a broader product mix that includes bananas, pineapples, and fresh-cut fruit, offering more stability but requiring complex global logistics management. The company has been investing in automation, digital transformation, and sustainability initiatives to boost operational efficiency and long-term resilience. Additionally, its integrated supply chain and strong presence in key international markets give it a competitive edge in meeting global demand consistently across diverse product categories.

AVO’s Price Performance, Valuation & Estimates

Shares of Mission Produce have gained 20.7% in the past month compared with the industry’s growth of 7.4%.

From a valuation standpoint, AVO trades at a forward price-to-earnings ratio of 23.93X, significantly above the industry’s average of 16.58X.

The Zacks Consensus Estimate for AVO’s fiscal 2025 and 2026 earnings implies a year-over-year decline of 20.3% in each year.

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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