Calavo says MLP contract worth up to $30M in 2008
Calavo Growers Inc. said yesterday the pineapple distribution agreement it signed last week with Maui Land & Pineapple Co. will be worth $25 million to $30 million in revenue in fiscal 2008, and will immediately begin adding to earnings.
MLP said on Friday its savings in calendar-year 2008 will be about $1.5 million from outsourcing the sales, marketing and distribution of its sweet, fresh pineapple -- Maui Gold -- on the mainland and in Canada.
The deal, effective Dec. 1, will make Santa Paula, Calif.-based Calavo the largest distributor and marketer of fresh commodity produce grown in Hawaii.
In 2003, Calavo acquired Maui Fresh International to become the largest importer of Hawaii-grown Kapoho Solo papayas. Calavo also promotes and sells other tropical items from Hawaii.
Lee Cole, chairman, president and chief executive of Calavo, said the agreement with MLP is significant strategically, operationally and financially.
"Calavo has built a strong infrastructure, including a robust sales organization and investment in distribution capacity, that provides a solid foundation for fresh product diversification," Cole said. "We are well-positioned to fold in additional products that can extend the Calavo brand."
In August, Calavo expanded into fresh tomatoes in a marketing and distribution agreement with Agricola Belher of Mexico that will lead to the sale of Calavo-branded tomatoes and generate tomato sales in the range of $20 million to $25 million in fiscal 2008.
Calavo, which also markets and distributes fresh avocados and other perishable foods, had $258.8 million in revenue in the fiscal 2006 year that ended Oct. 31, 2006. Fiscal 2007 results won't be released until January.
MLP said on Friday that the agreement with Calavo will result in the closing of MLP's Northern California operation and the layoff of nine employees who were responsible for the duties that now will be handled by Calavo.