Mission Produce signals cash flow pivot with $40m CapEx plan and leadership handover to John Pawlowski

Mission Produce, Inc. (NASDAQ: AVO) has announced a strategic shift in its capital allocation plan, cutting expected capital expenditures to approximately $40 million in fiscal year 2026, while simultaneously signaling its next phase of global expansion with a planned CEO transition. John Pawlowski, currently President and Chief Operating Officer, will take over from founder Steve Barnard in April 2026, marking the company’s most significant leadership change since going public in 2020.

The dual announcement comes on the heels of Mission Produce’s fiscal year 2025 earnings, which showed record annual revenue of $1.39 billion, up 13 percent from the previous year. While the fourth quarter saw revenue decline by roughly 10 percent year-over-year due to softer industry pricing, avocado volumes sold rose 13 percent, highlighting the company’s ongoing strength in distribution and global supply chain execution. Adjusted EBITDA increased to $41.4 million in the fourth quarter, driven by improved operational leverage and recovery in its International Farming segment.

With more than $180 million in operating cash flow generated over the past two fiscal years, Mission Produce appears to be ending its infrastructure-heavy investment phase. The company has completed major investments in farming operations, cold-chain facilities, and distribution capacity in North America, Latin America, and Europe. With these assets now live, the company is shifting its financial posture to one focused on cash generation, operational efficiency, and international market development.

Why is Mission Produce cutting capital expenditure to $40 million in fiscal 2026 and what does it signal?

The planned step-down to approximately $40 million in capital expenditures for fiscal 2026 represents a sharp reduction from the elevated spending levels seen in prior years. Mission Produce executives emphasized on the earnings call that this is not a retreat from growth, but rather a recalibration of investment priorities. The company’s multi-year infrastructure buildout is largely complete, and future growth will now focus on asset optimization and expanding volume throughput rather than continued capital-intensive projects.

This leaner CapEx profile is intended to unlock stronger free cash flow performance and position Mission Produce to reinvest more selectively in growth opportunities with higher return on invested capital. The company is also preparing for potential shareholder returns, though no formal dividend or repurchase program has yet been announced. For investors, the new CapEx discipline signals a transition to a more mature operational model that prioritizes cash conversion over fixed asset growth.

How does the CEO transition align with Mission Produce’s next strategic phase?

Founder Steve Barnard will transition to the role of Executive Chairman following the company’s Annual Meeting in April 2026, passing day-to-day leadership responsibilities to John Pawlowski, a 20-year company veteran and current President and Chief Operating Officer. The planned succession comes at a pivotal moment, as Mission Produce pivots from infrastructure-heavy expansion to strategic global growth.

John Pawlowski’s appointment as incoming CEO reinforces continuity in operational focus while aligning the executive team with a new mandate: drive profitable growth outside North America. His operational background and international exposure make him well-suited to lead Mission Produce’s next phase, which includes strengthening the company’s position in Europe, expanding in Asia, and optimizing margins across its avocado and mango portfolios.

Institutional investors are likely to view the transition as a low-risk leadership change with upside potential. The company’s long-tenured leadership team remains intact, ensuring operational continuity while embedding new accountability for performance in emerging global markets. Pawlowski’s elevation also reflects Mission Produce’s confidence in the scalability of its vertically integrated platform.

What does Mission Produce’s global expansion strategy look like beyond North America?

During the earnings call, Mission Produce executives highlighted notable growth in European operations, driven by increased avocado consumption, favorable supply dynamics, and rising household penetration. The company expects this trend to continue, with strategic investments in distribution, retail partnerships, and consumer awareness campaigns supporting higher volumes.

Mission Produce is also targeting Asia as its next major frontier. While the region currently contributes a smaller portion of revenue, it is seen as a long-term growth driver. The company believes that its cold-chain expertise and sourcing scale give it a first-mover advantage in markets like China, Japan, and South Korea, where avocado adoption is increasing but infrastructure and supplier reliability remain limited.

The global expansion play is about more than geography. Mission Produce aims to move beyond being solely an avocado distributor. The company is increasing focus on multi-fruit category development, deeper supply chain integration, and end-to-end transparency for customers. The ability to apply its post-harvest expertise and logistics network to other high-value perishables may open adjacent revenue streams while reducing dependency on volatile avocado pricing.

How are macroeconomic factors and commodity trends influencing Mission Produce’s positioning?

The broader avocado market is currently undergoing price normalization after several years of supply volatility and inflation-linked demand shifts. While this has affected near-term pricing power, Mission Produce has been able to offset some of the margin pressure through volume growth, disciplined sourcing, and greater operational efficiency in packing and logistics.

Farming conditions in key sourcing countries such as Mexico, Peru, and Guatemala have improved, contributing to more consistent supply. However, this also introduces new competition, particularly from vertically integrated rivals and regional players. Mission Produce’s scale, cold storage infrastructure, and strategic grower alliances remain core competitive advantages, particularly in contract-heavy retail channels.

From a capital markets perspective, Mission Produce’s shift to CapEx discipline and focus on international growth may help improve valuation multiples. The company has historically traded at a discount to its logistics and produce distribution peers, in part due to earnings volatility tied to avocado seasonality. With improved EBITDA visibility and free cash flow generation, Mission Produce may attract broader institutional interest beyond commodity-focused investors.

What are the strategic risks facing Mission Produce in 2026 and beyond?

While the CapEx reset and CEO transition are strategically sound, they are not without execution risk. Mission Produce’s ability to profitably expand in Europe and Asia will depend on managing regulatory differences, supply chain costs, and local consumer preferences. Additionally, pricing pressure in the avocado category may persist through early 2026, putting more pressure on volume-led growth.

There is also integration risk if the company continues to explore multi-fruit expansion or geographic acquisitions. Investors will expect discipline in how new categories are managed and how synergies are realized. Any misstep in execution or erosion in gross margin could undermine confidence in the company’s post-investment phase.

The company must also remain vigilant around ESG reporting, particularly in water-intensive growing regions. As environmental scrutiny increases, especially across institutional capital channels, how Mission Produce manages resource efficiency will affect not just its brand, but also its ability to raise capital at favorable terms.

What are the key takeaways from Mission Produce’s $40 million CapEx reset and CEO succession plan?

• Mission Produce is shifting away from its recent infrastructure investment cycle, reducing fiscal 2026 CapEx to approximately $40 million and prioritizing free cash flow generation.

• The company posted record full-year revenue of $1.39 billion for fiscal 2025, with strong avocado volume growth offsetting softer pricing in the fourth quarter.

• John Pawlowski, currently President and Chief Operating Officer, will take over as Chief Executive Officer in April 2026 as Steve Barnard moves to Executive Chairman.

• The CEO succession aligns with the company’s strategic pivot toward global market expansion, particularly in Europe and Asia.

• The reduced CapEx signals that major cold-chain and farming infrastructure investments are largely complete, allowing Mission Produce to optimize existing assets.

• Global expansion remains a top priority, with the company actively building retail partnerships and logistics capabilities across international markets.

• Pricing pressure and avocado market volatility remain risks, but the company’s integrated model and sourcing scale provide resilience.

• Execution risks tied to new category expansion, regulatory environments, and ESG pressures will be key factors in determining long-term investor confidence.