|The First Name In AvocadosTurning a delicious but odd-shaped fruit into a household favorite wasn’t in the plan when a group of grower-hobbyists banded together in 1924 to form the California Avocado Growers Exchange. And two more years would pass before Rudolph Hass of La Habra, California, would plant the state’s first Hass avocado tree.
At the time, avocado growers had no quality standards, no distribution channels, and only one facility, a packinghouse in Vernon, California. During that first year, the Growers Exchange packed 180,000 pounds of avocados from that packinghouse and, in doing so, launched an industry.
Though the Vernon packinghouse has long since closed, the company that sprang from that Growers’ Exchange – now known as Calavo Growers, Inc. – is still going strong some 81 years later. In 2005, this publicly traded, diversified, global agribusiness packed approximately 35 percent of the California avocado crop, nearly double the market share of its closest competitor. Three modern packinghouses – strategically located in Santa Paula and Temecula, California, and Uruapan, Michoacan, Mexico – teem with productivity and thrive on volume, packing approximately 200 million pounds per year. The company is now headquartered in Santa Paula, California and employs more than 500 people.
Calavo’s two principal business units – fresh avocados and processed products – supply wholesale, retail, foodservice distributors and operators and industrial. The company’s processed products division manufactures nearly 100 brand name and proprietary flavors of frozen and fresh-refrigerated guacamoles using ultra-high-pressure technology from a new, state-of-the-art 90,000-plus square foot production facility in Uruapan, Michoacán, Mexico. In supermarkets, Calavo’s great-tasting fresh-refrigerated guacamole is available to consumers nationwide. And, consumers of Calavo fresh avocados now span the globe, from Japan to Europe and beyond.
|Birth of a BrandThough no one foresaw such lofty accomplishments back in 1924, Calavo’s leadership qualities were evident from the outset:
|Branching OutDiversification into broader product lines began in 1931 with limes and avocado oil, the Company’s first processed product. Soon, Calavo was marketing coconuts, mangos, kiwifruit, persimmons, and Asian pears under a wide range of product names. Papaya, sold under the Calavo Gold® label today, made its first appearance in 1949.
Calavo turned its attention to avocado processing in 1962 with the acquisition of Frigid Foods in Escondido, CA. Its first successful processed consumer product was a refrigerated one-pound can marked “Avocado Dip (Guacamole)” in 1965.
|Reaching Beyond BordersIn 1964, the company that had created the domestic market for avocados launched its buttery-flavored fruit overseas, beginning with Japan and later followed by additional expansion into Asia, Europe, and Canada.
These new export markets, coupled with rising demand at home, drove the need for new sources of fresh products. In the 1990’s, Calavo established alliances to source fresh avocados from Mexico, Chile, New Zealand and the Dominican Republic.
|Going PublicCalavo thrived as a growers’ cooperative for 78 years. In 2001, Calavo member-shareholders were ready to take the next step. They voted overwhelmingly to convert the company to for-profit status. The following year, Calavo Growers, Inc. began trading on the NASDAQ National Market System under the ticker symbol CVGW.
That pivotal event set the course for the company’s future, unlocking the value of Calavo shares and offering new alternatives for raising capital to execute the company’s business plan. In 2003, Calavo made its first strategic acquisition, Maui Fresh International, Inc., a multi-product distributor of specialty produce. The transaction leveraged Calavo’s brand equity and market stature into new perishable product categories and broadened Calavo’s product offerings to 20-plus items, ranging from tropical fruits to chiles.
|Managed with a Grower’s Eye-viewLeading Calavo into this new era is Lee Cole, Chairman of the Board, President and CEO. The visionary yet down-to-earth executive has deep roots in “Calavo® Country” of Santa Paula, California. He has lived there since age 13 and operates his own 400-acre avocado ranch near the Company’s corporate headquarters.
Cole and the board of directors – most of whom are also avocado growers – clearly understand that growers are the lifeblood of the company. Growers generate volume, and higher volume results in better utilization of overhead, effectively spreading fixed costs over more pounds. Accordingly, nurturing grower relationships remains, as it has always been, Calavo’s number-one priority.
Today, Calavo’s grower community is some 2,300 strong. From 10-acre farmers to California’s two largest avocado producers—the Irvine Company and Limoneira Company—all enjoy the resources and marketing clout that come from aligning with the industry leader. Growers benefit from Calavo’s market knowledge, hands-on field management, education and informational programs and, most importantly, some of the highest returns in the industry.
|A Strategic Business AllianceCalavo’s 2005 cross-equity agreement with Limoneira Company illustrates the tremendous potential of synergies between the complementary business segments of Calavo and its growers. As a result of this far-reaching alliance, Calavo acquired a 15 percent ownership interest in Limoneira, a 112-year-old international land, farming and food company; Limoneira, in turn, became Calavo’ssecond-largest shareholder. Calavo gains the packing volume of Limoneira, the industry’s second-largest grower, and the opportunity for future Limoneira-Calavo joint ventures.
Calavo gained a new home, too, moving its corporate headquarters to a historic Craftsman-period lodge on the Limoneira Ranch in Santa Paula, California, in 2005. Calavo’s relocation also provides a showcase for visiting customers, who can soak in an end-to-end experience: growing, packing, ripening and shipping, all in one region.
Nearby, Calavo’s new Value-Added Depot, located in its former Santa Paula processed products plant, houses all aspects of Maui Fresh – sales, warehousing and distribution – in addition to Calavo’s ripening program and state-of-the-art firmness sorting equipment, ProRipeVIP®.
In 2005, Calavo enhanced its avocado ripening program by introducing ProRipeVIP® —verified internal pressure – that utilizes Acoustic Firmness Sensors (sound wave technology) to determine the firmness of an avocado by “listening” to its vibrational pattern. Calavo is the only avocado marketer in the U.S. to offer this newest, most innovative and accurate post-ripe sorting technology. By providing stores with avocados that are ready to eat, this value-added service helps boost consumption and breed happy customers.
|Looking ForwardFrom its corporate headquarters, Calavo’s leadership looks out onto vast avocado groves—and a promising future. Well capitalized and diversified, with strategic alliances in place, equipped with state-of-the-art facilities and leading- edge technology, the company is well positioned to meet new challenges and seize new opportunities.
At home, the growing Hispanic market, along with increased acceptance of avocados in mainstream dishes, portends new highs in domestic consumption. Abroad, the enormous potential of the China market beckons. In 2005, Calavo made its first shipment of avocados to China, a country with a population of one billion plus, with surging personal incomes and a zest for all things Western.
Our purchase of Renaissance Food Group, LLC was the cornerstone of our 2011 achievements. A leader in the fast-growing refrigerated fresh packaged goods category, Renaissance Food Group adds a broad product line-up under the Garden Highway and Chef Essentials brands.
From proud California origins, Calavo has built a brand that is recognized and respected for the finest avocados in the world. With consumers around the globe enjoying a great-tasting, healthy food—and avocado growers enjoying healthy returns—the Calavostory moves forward, always reaching for new milestones and strong in its conviction that the best is yet to come.