- Mission Produce, a major avocado distributor, went public Thursday in a downsized IPO.
- The company said Wednesday that its shares would price at $12, below the $15 to $17 range that it initially expected.
- CEO Steve Barnard called the price "disappointing," saying that the COVID-19 pandemic has affected Mission's IPO plans.
- He added that the company is moving ahead with plans to expand its international operations, targeting higher sales of its Hass avocados in Europe and Asia.
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The IPO market has started to rebound from its freeze this past spring, with a number of small companies listing stock. But going public remains challenging, as Mission Produce's IPO on Thursday shows.
The California-based avocado distributor had been planning its IPO long before COVID-19 started weighing down financial markets, CEO Steve Barnard told Business Insider in an interview Thursday. But on Wednesday, Mission said it would sell its shares for $12 each, lower than the range between $15 and $17 it targeted at first. The company also pared back the number of shares it would offer publicly to 8 million, down from the 9.38 million it had planned for in late September.
"Unfortunately, the process has been in-gear for a year and a half," Barnard said. "COVID and whatnot hit right in the middle of it."
"We were a little disappointed in that, but for every problem, there's an opportunity," he added. Mission's stock started trading under the ticker AVO midday Thursday.
Expanding sales opportunities abroad is one opportunity, Barnard said. Cash raised from the IPO will go in part toward expanding cold distribution networks in Europe and Asia, where the company believes it has more room to grow sales of its Hass avocados.
Mission's bet is that consumers in those areas of the world will prefer Hass fruit instead of other varieties, such as green skin avocados, which Barnard said are more watery than their Hass cousins and don't last as long on store shelves.
Mission has done something similar before: It popularized Hass avocados in the US after NAFTA removed trade barriers for Mexican-grown fruit to enter the country, Barnard said.
"Their per-capita consumption is where the United States was 20 to 30 years ago," Barnard said of consumers in Europe and Asia. "We see a huge opportunity ahead globally."
In the US, the company has had to shift some avocados originally destined for dine-in restaurants to retailers, which represent about 63% of Mission's revenue, Barnard said. That includes taking avocados that may not meet supermarkets' typical cosmetic standards and selling them in larger bags than normal in order to meet demand.
"We're seeing that people are eating a lot more avocados," he said.
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