- Oops!Something went wrong.Please try again later.
Yahoo Finance’s Alexis Christoforous and Steve Barnard, Founder & CEO of Mission Produce, discuss the popularity of avocados amid the pandemic.
ALEXIS CHRISTOFOROUS: Welcome back. Stock in Mission Produce is in the green after the avocado distributor's first quarterly earnings report since going public in October. Joining me now is the CEO of Mission Produce, Steven Barnard. Stephen, good to have you here. Thanks for joining us. I read that 2020 was a record year for the avocado industry. In the US alone, we consumed something like 6 billion avocados. So tell me how is it that your industry is growing during this pandemic at a time when so many food industries are shrinking?
STEVE BARNARD: Well, first of all, we have plenty of supply this year. As you mentioned, our numbers are up overall. People are, I think, conscious of what they're eating more so now than they ever have been. With the pandemic, they're eating at home more. You probably read, the food service business has been affected in some cases, not all cases. Some of the fast casual numbers are up. And retail is up.
I think one of the things that's changed even at retail, however, is how people are shopping. They're shopping less, but buying more. And we're seeing a different form of purchases, whether it be bulk bags like you would see in a club store. But retail's putting multiple sources of bags in now and that appears to be the fastest growing package.
ALEXIS CHRISTOFOROUS: I have seen that in my supermarket, where instead of just getting a single individual avocado, you can buy the bag of avocados. I'm curious what sales are like to the restaurant industry and how important is that to the avocado industry? Because so many restaurants we know are either shut down, or working at lower capacity.
STEVE BARNARD: Yeah, well, it's a big factor for our industry, especially the Hispanic-Mexican food. You see actually avocados on every menu today with the salads, sandwiches, breakfast, lunch, and dinner, omelets. Pretty well covers the whole space. But obviously in our case here in California, a lot of the restaurants are closed due to the shutdown. But some of the fast casuals, such as Chipotle as an example, the numbers are up because people are taking it out, curbside pickup, that type of thing. And their numbers are up.
So it's just really depends where you are in the space. Overall, the avocado consumption numbers are up compared to a year ago. And the supply is too. And prices are lower today than they have been because of the supply. It's the supply and demand product that reacts fairly quickly to it.
ALEXIS CHRISTOFOROUS: Yeah, I wanted to ask you about pricing because I know revenue for the last quarter came in at $205 million. That beat expectations, but it was still down 11% compared to the same time last year. And a big part of that was lower prices for avocado, at a time when we're actually seeing a lot of food price inflation during this pandemic. I think food prices overall are up 4%. So do you see that trend continuing? Will we expect to see lower avocado prices?
STEVE BARNARD: Well, it really depends on the supply. Mexico presently is shipping record numbers across the border, which is good for the industry. And it increases consumption going forward. What we'll see going into the first and second quarter of '21, you'll see consumption up and that will carry forward when the supply drops a little bit and prices will go back up, probably disproportionately, at least it has historically. So we're probably shipping 10 million pounds more than we were a year ago at this time. So the prices are substantially lower. But again, it reacts very quickly and you have to lay the averages.
ALEXIS CHRISTOFOROUS: What is that going to mean for first quarter outlook? The fact that you're going to have to contend with these lower avocado prices?
STEVE BARNARD: Well, our volumes are way up. So hopefully, we make it up with volume. The Super Bowl polls we're seeing now, which is one of the highlights of the year along with 5 de Mayo and 4th of July. But the numbers are record setting. I think Mexico's been shipping, like I said, 10 million pounds a week, more than they ever have before across the border. So prices will remain fairly low for a while. I think, probably late spring, you'll see a change and they'll start going back up.
ALEXIS CHRISTOFOROUS: You know, you mentioned the Super Bowl. I have to think the Super Bowl is the Super Bowl for the avocado industry. So many Super Bowl parties. Guacamole is a big part of that. But now, of course, with the pandemic, it's squashed a lot of those party plans. So are you expecting this to be another blow out for the avocado industry, even with the pandemic?
STEVE BARNARD: Well, we think it'll be good. I think you'll see, again, more parties, smaller sizes. So I guess it all averages out. But we sure haven't seen any slowdown in the pull through on orders. It's been very good.
ALEXIS CHRISTOFOROUS: All right. But before we let you go, I need some of your avocado tips because I buy a lot of avocados. And first off, when you buy them and they're not ripe, sometimes you can't find a ripe one in the store. Is there any way to quicken up the ripeness situation? Let's say I go to supermarket and I buy it today and it's just too hard to eat tonight. Is there any way for me to quicken up that process?
STEVE BARNARD: Put it in a paper bag on your counter, outside of refrigeration, maybe throw a banana in there with it, which will give off a little ethylene, accelerate the process. Thing about an avocado that people don't know is really, your refrigerator is probably 36, 38 degrees, which is too cold for a hard avocado. It's perfect for a ripe avocado. A ripe avocado is actually tougher when it's-- I mean, a ripe avocado's tougher for refrigeration when it's ripe compared to hard.
So, buy more, ripen them, then put them in the refrigerator. And it'll last probably at least a week or 10 days. But if you put them in there too hard, they turn black. So there's the lesson of the day.
ALEXIS CHRISTOFOROUS: I knew you would know. I am so glad because I have wondered about that. So hopefully, we've helped other people as well. All right, Steven Barnard CEO of Mission Produce. Thanks so much. Enjoy those of avocados during the Super Bowl.
STEVE BARNARD: Great. Thanks for having me, Alexis.