Mission Produce’s Operations Stall After Botched ERP Implementation

Avocado distributor’s financials may not be reliable either.

March 11, 2022

Though avocado prices have jumped recently, Mission Produce (AVO), a grower and wholesale distributor of avocados, wasn’t able to capitalize profitably. While sales rose 25% to $216 million in the quarter ending January 31, 2022, Mission’s net income plunged 709%. The company posted negative operating cash flow of $41 million.

In its latest 10-Q, Mission blamed the poor performance on a botched enterprise resource planning (ERP) implementation in its Marketing and Distribution segment. The system was implemented on November 1, 2021— the first day of the quarter— and resulted in a disastrous ninety days:

“During implementation, we encountered significant challenges which limited our ability to effectively manage our business operations, thereby impacting our profitability and financial results for the first quarter of 2022. Our distribution centers and packing houses experienced problems with purchasing, receiving and shipping…”

Unable to procure and package on its own, Mission was forced to rely on third parties for fruit and packaging. The fallout doesn’t end there though. The system’s automated customer invoicing didn’t work properly either, suggesting delays in payments are ahead. Mission also warns of inventory management issues— especially problematic for perishables with short shelf lives like avocados.

Like its new ERP system, Mission’s financials may not be trustworthy either. The company suggests the records necessary to produce accurate financial statements may also be impacted:

“...new ERP system…which impacted recordkeeping processes for the general ledger, accounts receivable, inventory, accounts payable, purchasing, and shipping. We have focused on the maintenance of internal controls and the assessment of the design of new controls through the development and deployment of the new ERP system.”

Related: GO, KR, WMT

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