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Avocado Grower, Packer Team Up

Calavo Growers agrees to distribute 10 million pounds a year of the fruit from Santa Paula-based Limoneira.

June 09, 2005|Fred Alvarez | Times Staff Writer

Widening its stake in an increasingly competitive avocado market, Calavo Growers has teamed with Ventura County's largest farming company to boost distribution and sales of the pear-shaped fruit.

Under an agreement reached last week, Calavo will pack and distribute 10 million pounds of avocados produced annually by the Santa Paula-based Limoneira Co., one of the nation's largest avocado growers.

Calavo, the nation's largest avocado marketer, already has moved its headquarters from Santa Ana to Santa Paula. The companies plan to build a state-of-the-art avocado packing house on Limoneira property in the Santa Clara River Valley within three years.

Calavo President and Chief Executive Lee Cole said the new partnership puts the nation's two largest avocado growers, Limoneira and the Irvine Co., under the Calavo banner.

And it comes as the United States prepares to lift a 90-year-old ban on the importation of Hass avocados from Mexico into California, ratcheting up the competition for consumers. The U.S. Department of Agriculture last year announced it would allow Mexico to ship avocados into California and other Southwestern states starting in 2007.

"This partnership is very important to us; now we can supply the big chain stores, and they don't have to go somewhere else looking for fruit," Cole said. "We were already in the No. 1 position. This just solidifies our place."

Calavo and Limoneira traded ownership stakes last week through an exchange of stocks and cash. Calavo now holds a 15% ownership interest in Limoneira, making it that company's single largest shareholder. Limoneira has a 7% ownership stake in Calavo.

Limoneira President and Chief Executive Harold Edwards said his company plans to increase avocado production to 15 million pounds annually within 10 years. The 112-year-old company farms 7,000 acres of citrus and avocados in the San Joaquin Valley and in Ventura and Santa Barbara counties.

"We are bullish on avocado production and extremely bullish on Calavo," Edwards said. "It has the avocado world under its wing."

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