Who's Winning the Avocado Clash: Mission Produce or Calavo Growers?

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a day ago

In the fast-growing world of fresh produce, no fruit has captured the market's imagination quite like the avocado, and two names stand out in the race to dominate the global supply chain — Mission Produce Inc. AVO and Calavo Growers Inc. CVGW. Both companies have carved out powerful positions in the avocado industry, but their strategies, scale and market approaches set them on distinctly different paths.This face-off takes you inside the competitive dynamics between these two avocado titans, comparing their market shares, positioning and business models. AVO leans on a vertically integrated, global footprint with a sharp focus on operational efficiency and international sourcing. Then again, CVGW blends avocado distribution with a broader portfolio that includes value-added fresh foods and prepared produce.As consumer demand for healthy, fresh options continues to rise and global supply chains grow more complex, the question arises: Which company is better positioned to scale, adapt and lead in the premium produce category? Join us as we unpack the strengths, strategies, and prospects of AVO and CVGW in this all-green battle for avocado dominance.
AVO continues to cement its position as a global leader in the avocado industry, attracting investor interest with its scale, strategic clarity and consistent execution. The company opened fiscal 2025 with strong momentum, driven by impressive gains in its Marketing & Distribution segment despite supply disruptions in Mexico, its primary sourcing region. This performance underscores Mission Produce's agility in navigating market volatility while maintaining pricing power and meeting rising consumer demand. With sourcing operations across Mexico, Peru, Colombia and Guatemala, AVO commands a meaningful share of the global avocado supply and is steadily expanding into complementary high-growth categories like blueberries and mangoes.At the core of Mission Produce's growth strategy is its vertically integrated model, diversified sourcing, and product expansion. Its multi-category portfolio, anchored by health-forward staples, positions the company to benefit from long-term consumer trends. AVO is investing heavily in infrastructure, including new acreage for blueberries and a growing mango program, as well as optimizing its North American distribution network for cost efficiency. This operational flexibility allows Mission Produce to shift sourcing when needed, ensuring service continuity and reinforcing its reputation as a reliable, high-quality supplier in a competitive market.On the financial front, AVO is showing disciplined, profitable growth. Adjusted earnings and EBITDA have improved, backed by strong asset utilization and expanding farming operations. The company is also investing in digital innovation to enhance efficiency across its logistics and supply chain. However, tariff uncertainties remain a variable, especially given Mexico's central role in sourcing. Temporary tariffs earlier this year created margin pressure and underscored the value of Mission Produce's global diversification. With alternative sourcing regions like Peru, Colombia and others, and a resilient supply network, the company is well-equipped to absorb geopolitical shocks, strengthening its case as a long-term growth player in the global produce sector.
CVGW, a long-established leader in the avocado and fresh food space, is making a strong comeback with a sharpened focus on profitability, margin expansion and operational efficiency. In its latest quarter, the company delivered its best first-quarter adjusted net income since 2019, signaling a turning point after years of restructuring. The Fresh segment, led by avocados, saw a significant surge in profitability despite a slight dip in volume, driven largely by stronger average pricing and lower fruit costs. This pricing power reflects Calavo Growers' deep industry relationships and disciplined sourcing strategy. As a major player in the avocado market, CVGW's influence remains critical, with its branded products and private-label offerings reaching a broad base of retail and foodservice customers.What sets Calavo Growers apart is its dual-segment portfolio, combining its core Fresh segment with a stable, if challenged, Prepared segment that includes ready-to-eat guacamole and fresh-cut fruit. While the Prepared segment faced margin pressure in first-quarter fiscal 2025, it remains a strategic lever as convenience trends grow. The Calavo brand itself stands for freshness, trust and health, resonating especially with health-conscious, time-strapped consumers.Backed by a vertically integrated supply chain and long-standing grower partnerships, CVGW continues to strengthen its operational backbone. The company's targeted cost discipline, evidenced by a significant drop in SG&A expenses, and a tripling of adjusted EBITDA, underscores its renewed commitment to sustainable profitability.Like others in the produce industry, CVGW faces uncertainty regarding tariff dynamics, particularly regarding Mexican avocado imports. While tariffs briefly posed additional cost pressures, the company's management remains confident that the nutritional value and affordability of avocados will preserve demand resilience. More importantly, Calavo Growers' long-standing sourcing presence in Mexico, paired with adaptive pricing and logistics strategies, offers it a buffer against short-term disruptions. With a strong balance sheet, growing momentum, and a clear focus on shareholder value, CVGW is emerging as a streamlined, high-potential investment in the evolving global produce landscape.
The Zacks Consensus Estimate for Mission Produce's fiscal 2025 sales and EPS implies year-over-year declines of 6.6% and 32.4%, respectively. EPS estimates have been unchanged in the past 30 days. AVO's annual sales and earnings are slated to decrease 3.2% and 6% year over year, respectively, in fiscal 2026.
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The Zacks Consensus Estimate for Calavo Growers' fiscal 2025 sales and EPS suggests year-over-year growth of 7.2% and 78.1%, respectively. EPS estimates have been unchanged in the past 30 days. CVGW's annual sales and earnings are slated to increase 5.1% and 24.1% year over year, respectively, in fiscal 2026.
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Mission Produce and Calavo Growers have experienced stable estimates in the past 30 days. However, CVGW holds an edge, supported by stronger projected year-over-year sales and EPS growth, compared with the anticipated year-over-year declines in Mission Produce's sales and EPS.
In the past three months, the CVGW stock had the edge in terms of performance, having recorded a total return of 16.8%. This has noticeably outpaced the benchmark S&P 500's return of 1.2% and AVO's 12.3% decline.
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From a valuation perspective, Mission Produce trades at a forward price-to-earnings (P/E) multiple of 26.89X, which is above its 5-year median of 20.5X. Moreover, the AVO stock trades above Calavo Growers' forward 12-month P/E multiple of 12.49X and a 5-year median of 21.87X.
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At current levels, CVGW appears attractively priced relative to AVO, offering a compelling case for value-focused investors. While Calavo Growers' lower valuation may reflect lingering market skepticism, it suggests an opportunity the market has yet to fully recognize, particularly considering the company's recent operational turnaround. With improving profitability, expanding margins and disciplined cost management, Calavo Growers is demonstrating meaningful progress that supports a stronger earnings outlook without the elevated price tag.In contrast, AVO trades at more than double Calavo's current forward P/E multiple and sits above its 5-year median, signaling a valuation that already reflects much of its growth potential. While Mission Produce's premium is supported by its global sourcing footprint, multi-category strategy and digital innovation, the stock leaves less room for upside surprises and offers less of a cushion in a volatile market environment.Given this dynamic, CVGW offers a more favorable risk-reward profile, especially for investors seeking exposure to the avocado sector with a margin of safety. With a well-known brand, stabilized operations, and improving financial performance, Calavo Growers' undervalued stock could represent a more prudent and timely entry point, particularly as valuation discipline becomes increasingly important in today's market.
Calavo Growers emerges as the more compelling pick, particularly for investors seeking a balanced blend of value and growth. While Mission Produce stands out for its global footprint and diversified category strategy, Calavo Growers' recent performance suggests a company on the rise.With a robust three-month return, a leaner cost structure and clear signs of a successful operational turnaround, CVGW is capturing attention not just for what it is today but also for where it is headed. Its significantly lower valuation, especially when compared with AVO's premium pricing, underscores the market's relative underappreciation, offering an attractive entry point.Adding to CVGW's appeal is the positive momentum in analyst sentiment. Positive forward estimates signal growing confidence in the company's earnings potential, suggesting the turnaround is not only real but sustainable. While AVO may offer long-term strategic advantages through diversification and scale, CVGW currently presents a more favorable risk-reward profile.For investors focused on capitalizing on both recovery and value, Calavo Growers is making a strong case as the stock to watch in the avocado space. AVO and CVGW currently carry a Zacks Rank #3 (Hold). 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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