February 21, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Mission Produce, a vertically integrated, global leader in the avocado business, has partnered with Criterion Africa Partners (CAP), a private equity firm developing assets in the forestry value chain in Sub-Saharan Africa, and ZZ2 Boerdery (ZZ2), one of South Africa’s largest farming companies, to launch the joint venture Selokwe Agri. 

Through this venture, the partners aim to expand to over 1,000 hectares (2,471 acres) of avocado orchards in the prime growing region of Limpopo, South Africa, by leveraging the expertise of each shareholder to maximize the production and distribution potential of the region. Additionally, Mission Produce has contracted with Core Fruit to manage the logistics and transportation to the EU market, where the bulk of the project’s South African production will be bound.

“As global demand for avocados continues to grow (1), establishing additional sources of owned production through vertical integration is a key element of our sourcing strategy to promote increased supply reliability,” said Steve Barnard, founder and CEO, Mission Produce. 

“South Africa is the second largest exporter of avocados to the European Union and the United Kingdom during the Summer season (1).  So, our new investment in the region is expected to support our expansion in export markets, especially in conjunction with the anticipated March opening of our newest forward distribution center in the UK.”

This project will add to an already impressive global footprint for Mission Produce, which already manages over 5,500 hectares (13,591 acres) of avocados, and owns and operates four state-of-the-art packing facilities in California, Mexico, and Peru, and manages sourcing capabilities in Chile, Colombia, the Dominican Republic, Guatemala, Brazil, Ecuador, South Africa, and beyond. This expansive reach across both hemispheres enables it to provide premium fruit on a year-round basis through its 12 forward distribution centers strategically located throughout North America, China, and Europe. 

For CAP, the establishment of Selokwe Agri is part of its higher and better use (HUB) investment strategy, which aims to create higher value through the improved utilization of land, water, and labor resources in South Africa, and increasing employment opportunities in the regional communities. 

The final partner, ZZ2, brings its expertise in avocado cultivation and environmentally friendly farming to the project, having already developed more than 250 hectares (617 acres) of avocados at Selokwe, which are expected to see their first harvest this season. This ability will maintain the project’s compliance with CAP’s ESG standards, including meeting the benchmarks of the Global G.A.P. and Sustainability Initiative of South Africa (SIZA) certifications. 

“We look forward to deepening our relationships with some of the most well-established, reputable partners in South Africa, the world’s 8th largest exporter of avocados,”(1) said Keith Barnard, senior vice president, sourcing, Mission Produce. “The avocado seasonality of South Africa extends our supply availability by approximately two-to-three months before Peru’s peak season and is expected to bring a long-term benefit in our ability to offer a year-round supply of ripe Hass avocados.”

Barnard noted the market potential that exists in the EU, explaining, “The opportunity to grow the avocado market in Europe is significant – in 2022, the EU’s per capita consumption was 3.3 pounds, compared to the U.S.’s 8.5 pounds.”(1)

Indeed, this potential has also been outlined in the Agricultural Outlook 2021-2030 report issued by the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization (FAO) of the UN, which forecasts that avocados are expected to be the second-most traded tropical fruit, after bananas, by 2030. At which time, the EU (where avocados have already outpaced grapes to be the second most valuable fruit import from developing nations) will account for 31 percent of global imports. 

“The addition of a high-quality source to our existing network strengthens Mission Produce’s position as a global market leader and enhances our ability to drive avocado market growth in the EU.”

Endnote:

1. FruitTrop Magazine. September-October 2022.

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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