Thank you for joining us today. I'm Ben Bienvenu. I cover the food and agribusiness sector here at Stephens. We have the Mission team with us today to take questions and give us insights about their business. From the company is Steve Barnard, Co-founder and Chief Executive Officer, and Bryan Giles, Chief Financial Officer. I'll be leading the Q&A session today, but feel free to chime in with questions if you have them, and I'll check in periodically to see if there are questions. Steve, Bryan, you know, we really appreciate you being here, as always, and you know, helping us learn more about your business. Yeah, thanks, thanks for having us. Thanks for being here. So I wanna start by maybe looking back a bit. We've had a tumultuous few years, the last few years in your business and your industry, not just specific to you. But you know, we've started to see green shoots of improvement in this year. And, you know, I, I think as we continue to move forward, I would, I would think as we see inflation ease, that we'd see some continued improvement. But I'd love to hear from you, you know, the things that you're optimistic about as you transition into a new calendar year, things that you're, you know, on alert for, risks to potential improvement as you look forward- Mm-hmm ... and help us frame generally how we should be thinking about the go forward. Well, I'll just start it out, and I'll turn it over to Bryan. Mm-hmm. But, obviously, through the COVID time, inflation, especially on freight rates, hit us pretty hard a few years ago. Those have calmed down and actually have actually headed the other way in a pretty rapid drop. So that's a big cost savings there. And, I think, we're kind of settling down as a company on what our CapEx is going forward, and that we're pretty well built out on some of the production areas that we've talked about, so... And with that, yeah, we see consumption continuing to grow around the world. You look at Asia and China and some other areas, there's a huge opportunity out there, so we're continuing to develop and plan ahead to make sure we have the resources in place to fill that need. So... I would say, you know, steady supply of avocados are probably what's most important to us in the near term. We transition to different crops throughout the year, with Mexico being the one that we're in right now. So and right now, I mean, we've seen consistent supply coming across the border. It doesn't mean things won't change at some point going forward. It's a dynamic environment in Mexico, but certainly that consistent supply enables us to put those programs in place, and it encourages retail to promote the category and keep it at the forefront of everyone's minds. You know, certainly, the risks are that there are disruptions along the way, whether it be with Mexico or whether it be with our own production as we move towards the Peruvian season next year. I think as you know, the farming part of our operation certainly has different risk characteristics to it than the marketing business does. We're subjected to fluctuations in production yields, which certainly input or impact our profitability. And with some of the weather patterns, with an El Niño condition, I mean, there's certainly... You're monitoring how that may impact the crop. And then certainly pricing environment, where, you know, when we're marketing fruit, and we're buying and selling, you know, we can make money on a per-box basis in a high-price or a low-price environment. When you're a farmer, you're much more susceptible to where that ultimate price resides. So I would say, but that would probably be the biggest risk, is if pricing ultimately sets in at a level that is lower than we'd like it to be. Okay. You know, I think we talked about some of the volatility in the markets in which you participate. I think one thing that any new investor in Mission grapples with is trying to think about what's the appropriate baseline or normalized earnings for your business. What do you think about when you're thinking about putting capital to work and targeting returns on capital? Maybe that's a perspective that we could look at this from, whether it be organic growth capital or M&A, to grow your business. I'll let Bryan talk about the numbers here in a minute. Mm-hmm. But when we look at where we're gonna spend capital, how does it improve the business? How does it grow the business? Does it solve a need that we have, say, in distribution or a gap in production somewhere? We're pretty well built out, I think, on the supply side of it, but looking forward on distribution with Asia and China and some other opportunities, you know, those stand alone on their own. So it's, does it fill a need? Does it provide value? That's where we keep it simple, and then Bryan goes over the numbers... and tells me if I can do it or not. You know, there's very much a long-term profile to our investments, whether it be farms or whether it be in our distribution facilities. You know, farms take, you know, four or five years to get into production and even longer than that to really reach maturity. So you're looking at pretty far out when you're making decisions. I think even our distribution operations, we're gonna be building them out with capacity to grow into, so you're making assumptions around how a market's gonna grow during that timeframe. You know, we've invested heavily in CapEx over the last probably five years or so. I think the message we've delivered is that we expect to step down, and those, I think we're seeing a, you know, step down this year, and that should continue going forward. I think, too, Steve alluded to the supply base, I think we feel pretty good about where we're at. Peru, we're pretty much done with development of avocados. You know, we're finishing off some projects in Guatemala that are gonna help us balance the calendar with Peru. I think distribution, we're good with North America at this point. We feel, you know, that we have adequate infrastructure. I think, you know, we've invested in the U.K. earlier this year, and that's continuing on with our second phase. So I mean, there's some growth opportunities and maybe some export markets, but, but all in all, I think we feel pretty good that we can step it down significantly from where we're at. You know, I think still, you know, historically, we've looked at around a 20% hurdle on ROI. I'd say if anything, with the volatility that's in the market, I'd wanna see a return that might be a little bit higher than that right now, to get us to pull the trigger. But I, you know, I think that, yeah, we are seeing that natural step down. We've made these investments, and we expect them to kind of, you know, no, no pun intended, come to fruition over the, the coming years. Okay. And maybe thinking about normalized earnings from a, you know, profit per pound or box perspective, is there a expectation that you have, recognizing things are never static? Yeah. Maybe you're waving at that normalized margin per box on the way up or down as you pass it? Yeah. Play the averages. Yeah. No, I mean, Ben, I think you understand the space- Yeah ... as well as anybody. You know, I would say that, you know, if we're making a margin that's, you know, between $0.12-$0.14 a pound, we're probably content. Within our marketing and distribution segment- Mm ... if we're making a margin that's in that range, we're probably content. If we're making more than that, we're happy. If we're making less, we're probably working on how to fix that. That's kind of the range that we would tend to operate in. You know, certainly, that target moves over time as well. It's not always 3-3.50. I feel that's kind of where we're at now. We still have, I think, capacity, you know, that we're working to better utilize, so as volume grows, I think that there's opportunities to gain fractions of pennies on that. But, certainly, the most important aspect of our business is to get it right on the buy, sell, on the fruit itself. It's a dynamic environment. We don't have long-term agreements with customers or with growers, but we have long-term relationships with both. But the pricing moves regularly. Our customers are used to that kind of dynamic movement. It's kind of a little different than most items in the produce aisle, but they've grown accustomed to it. But we do our best to kind of manage that and try not to get too long or light on inventory at any given time that leaves us exposed. The farming side's just a little bit different. Mm-hmm. I think yields and pricing are the big drivers on margins. We've seen years where that business has had margins north of 50%, and we've seen years where it's had margins below 20%, because there's just dynamics that are at play that aren't completely within our control. What we know is that farming business is there. You know, the purpose for it is to support the marketing business. You know, our intent's not to just be farmers, to let someone else market our fruit. The intent is that we developed a demand for avocados, and there was a lack of supply available, so we went out, kind of took the matter into our own hands and developed supply in many cases. It enables us to do things that, you know, marketers that aren't vertically integrated can't do. There, there's definitely value. I think he's referring to fixed pricing agreements with retail for the season, such as Peru. If you didn't own that product, you'd be at- Yeah ... at risk if your price went below what the market was. Yeah. Yeah. That was for a need, not 'cause we like punishment. Maybe could you talk a little bit about the supply and demand in the market, the avocado market right now? What are the things that you're focused on as we transition into the Mexico crop year, and then think about kind of the next several months? Well, stability comes to mind. Mexico is a hard place to predict 'cause they can start and stop. You pay every day for fruit on the tree, and you pick it and pack it, and deliver it to the border, to the port or wherever you're going with it. So it's, you've gotta have a lot of feet on the ground to figure out what they're thinking. You have to work around holidays and whatnot, as far as disruptions, but it goes up and down. It's good and bad, depending on what side of the fence you're on and what happens. That's why we try to have at least two sources of supply at any one time. That's why we're developing Guatemala, which comes off the same time as Mexico. That's strictly for the export markets, Europe and Asia. At this time, it is in the process to be approved for the U.S., but Mexico is a tough place to do business. But unfortunately, it's the biggest supplier in the world, so we've gotta be there. We've got several feet on the ground down there, two packing houses. We deal with several others. It's a day-to-day business, and, yeah, we're making it work, but it's challenging. Yeah, I mean, right now, it's moving smoothly. Pricing is low. You know, USDA data's out there. It kind of, you know, indicates as such. There's a... You know, people are chasing larger-sized fruit, but there seems to be ample supply of smaller fruit at this point. But we know that can change quickly. We've seen it change quickly. We've seen it change in the season quickly already. Change in the middle of the day sometimes. We're hearing mixed messages on what the overall Mexico crop's gonna look like this year. Some people are saying slightly up, some people are saying slightly down. All we can do right now is kind of monitor and try to gain more and more information as it becomes available. Certainly, you know, it's still pretty far off before we think about California and Peru slotting in, but, you know, most likely, if Mexico's a light crop, California will harvest early and fill in, and try to get out of the way before Peru comes on board later in the summer. They'll certainly, I would see marketers that will try to attempt to even start Peruvian harvest early, if that is the market conditions, 'cause if the crop ends early, pricing will likely rise, and that will be an indicator to growers to start harvesting. So, you know, there's still, you know, a lot of things at play right now. I think the key for us is just, we're gonna be positioned at the top of the industry, regardless of what the market conditions are. It creates different challenges for us along the way, but we're confident. We've been able to execute in high supply environments, and we execute in low supply environments, and, you know, we'll do no different this year. Maybe thinking more recently, we had a big run-up in price, kind of at the start of this last fiscal quarter for you all. It came down quite substantially during the quarter. What were the factors at play there? Is that transitioning from one crop to another? Is it excess supply, weaker demand? Not weaker demand. Demand has stayed good. Okay. It's basically supply out of Mexico and the sizing of what you're picking. They can move from one district to the next, and you really don't know when that's gonna happen. And the size curve may change. So you might have promotions on size 60s, which is a smaller size fruit, and then all of a sudden you end up with a lot of bigger fruit, and you're short over here- Mm. -and it's... Again, that's why we like two sources of supply at one time. That should calm down as we get into November. The volumes are up now- Mm ... and they'll just, they'll go full speed probably till March at this point, especially for Super Bowl. So I think we're over the rough spots. It's not a surprise. It happens every year. Yeah. You just don't know what day it's gonna happen and- Mm ... how to make your commitments, but- Yeah ... it's nature of the beast. Yeah, to Steve's point, Mexico drives the industry, and I think that, you know, certainly, you know, we had a period of time at the end of our, you know, quarter where we saw prices rising because, you know, fruit was in short supply. You know, Peru, you know, and I think anticipation for, you know, the current quarter and going through had a lot to do with how we thought the new crop with Mexico was gonna come online. Again, it's all about the message of like, what, what is the right info? We'd heard that the crop was gonna be smaller. Now we're hearing mixed. The harvest thus far doesn't seem to be showing it, and that's ultimately what's keeping pricing down. Mm. As Steve alluded to, the bulk of the avocados consumed in the US come from Mexico. They are the largest supplier. They make up close to 70% of the fruit that we market. So it's significant, and when that industry supply ebbs and flows, it has an immediate impact on pricing, much more so than any of the other countries of origin that we source fruit from. Okay. I wanna transition and talk a little bit about growth and volume growth opportunities in the business, but before I do, maybe I'll check and see if there are any questions from the group. So you talked about demand being strong still, Steve. Maybe talk about what opportunities you see for growth in the U.S. Is that still your priority? I imagine there's critical mass there, so it is. Yeah. The numbers are more important, but then maybe talk a little bit about the international- Sure ... opportunities you have. Yeah, I think we're gonna continue to see growth in the U.S., even though it'll slow down a little bit. I mean, we're at about, what? 10 pounds per capita, I think, 9-10 pounds per capita today. When we got started years ago, it was 1. Several things changed that. And we're really focusing on Europe and Asia, 'cause that's where the old saying, "Follow the money," and that's the biggest opportunity, 'cause their per capita consumption's 1 pound, about where we started years ago. Just in Europe alone, as an example, we've just opened our second, we've opened, as Bryan said, a big distribution center in the U.K. And we also have one in the Netherlands for distribution in Northern Europe. Their per capita consumption over there, they still eat green skins, which I make the joke to them that the Donner Party wouldn't eat green skins. They're awful. We need to get the Hass variety and go year-round with it, ripen them, and do it right. We're making progress, although it's slow. They're stubborn. I like to tease them. I said, "There's a reason we left 300 years ago, you know?" So they just looked at me like: What are you talking about? I said, "This-- You're doing it wrong." They repackage everything. They throw the old package away. I mean, they talk about ESG, they don't practice it at all. So we're trying to change the way they do business there, and we can do that now because we're vertical, and we can get the fruit over there that we control. That's the reason we're vertical. So we're making progress. We picked up two or three retailers over there on a full-time basis, Lidl and Aldi, which are the two fastest growing, by the way, and making great progress there. But we think that by providing a ripe pass year-long, getting rid of the green skins, and getting rid of a lot of that packaging, which would lower their cost, their sales should triple in the next three years, four years- Yeah ... I think. And that, that's in Europe. China, consumption's really not measurable yet, but, we have four distribution centers there. And just this past year, we were sending, as an industry, about 30 loads a week there during the summer, especially during the Peruvian season. This year it went to 100, and I said: What happened? It tripled in one year. The kids started eating avocado smoothies, and it tripled the business overnight.... So what's next? And I said, "What's next is the avocado noodle soup." They eat noodle soup twice a day, everybody. Put four chunks of avocado in a noodle soup, and you'd sell 78 million pounds a day extra. So there's huge opportunity. Okay, take half of it. Put them in half the noodles. I don't care, do something. But, we're doing promotions with soup companies and whatnot to try to get the consumption up, 'cause it's a number one superfood. They eat healthy, they eat fish, they eat noodles, things like that. So I mean, it fits their diet, and we see huge opportunity in both Europe and Asia, and there's more opportunity here, too. Mexico's per capita consumption is well over 20. I don't know if you've noticed, but a lot of them are moving here, so that's gonna make the numbers go up here, too. Yeah. What's the receptivity from each of those geographies, Europe and China, in terms of, you know, responding to, to you guys coming in and trying to change the products that you offer to the market and, and then ultimately change the consumer behavior? Well, we hired locals, which helped. Matter of fact, they're gonna be in our office next week. It's changing. They're listening. They're trying things. It's slow, but we're seeing progress. Yeah, I think when we first went into mainland Europe about 10 years ago, you know, we were dealing primarily with the wholesale customer base. We didn't have a lot of- Yeah ... direct-to-retail relationships yet. We had a vision of how we thought we could change the space and a long-term plan that as Peruvian production came online, how we were gonna roll it out. I don't think it worked quite as we'd expected in the EU. As Steve alluded to, Stubborn ...stubborn, you know, they didn't really wanna. We thought that we could replicate how fruit was purchased in the U.S., you know, sold bulk on the shelf. People feel fruit, want ripened fruit. That's not really the way they sell it in E.U. today. Again, we think that the pull-through will be much greater if they shifted to U.S. model, but they weren't quite ready for that yet. So we didn't see the growth in the E.U. happen as quickly as we thought it would. I think when we expanded in the U.K. operation and opened up our operation earlier this year, we took a different approach to it, where we have our own facility, we have repacking equipment, and we are selling direct to retail and giving them what they want, and we're seeing a very positive reception of that. So we're growing our share, we're growing our customer base there, and, and I think doing really well in that market. We're now going back to the EU and saying: Okay, you know, we've, we tried to fight it, but now we're gonna give them what they want. We still think long term there'll be the shift- Yeah ... but in the short term, we're gonna do repacking there, where we've relocated. We don't have a lot of hard assets on the ground in the EU, but we relocated to a different facility in the Netherlands that has repacking services. So we can sell direct to retail and not through a middleman there. We think, you know, we're gonna have to build that up. The relationships exist, but we think it'll be a much more successful model over the next, probably two or three years than what we've seen in the past. I think longer term, the challenge in Europe is that there, you know, there, there is a bubble of fruit that comes in during the Peruvian season, and then there's a lack of supply outside of that window. You know, I think that in order for that market to truly develop, there needs to be a year-round supply, and that means more fruit available during the fall, winter, and spring months. I think some of the investments we're doing in Guatemala and Colombia, and even South Africa, along with relationships we're developing with third-party suppliers in those areas, are gonna help to bolster supply during that window. So you don't come into the European season and see volume in the market double. I think that's part of the challenge we have right now, is that the market gets overwhelmed during a short window, and then it goes back down. I think there's a combination of needing to elevate kind of those valleys, but at the same time, while not growing the bubble any more than it already is over the next couple of years. But we're going direct retail and cutting out a link of the chain- Yeah ... by doing the repacking or whatever they want ourselves. Mm-hmm. That's a huge profit center. Got it. Or has been for those guys- Yeah ... trying to keep it. I'd say, yeah, the Asia market is still very immature. I don't think we're trying to change anything there. They're just learning how to consume avocados today, where... You know, Europe, while the consumption is much lower than the U.S., it is, you know, it's somewhere on the spectrum between Asia and the U.S. There are players there today. We have a relatively low share at the moment. We think we can. Not only will consumption grow, but we think we can build share meaningfully in that market over the coming years. So nice opportunities for demand growth. How is supply globally meeting that? Is it exceeding it, generally? Is it lagging it? And what are the geographies that are seeing the most supply growth? Well, I would say Peru’s probably seeing the fastest or most recent supply growth, almost in excess. Mexico is pretty stable of what they do. Colombia’s around the corner. They’re not quite there yet, but they’re starting to... They’ve got a lot in the ground, 90,000 hectares, I believe, but a lot of them are on the wrong rootstock, and a lot of them aren’t irrigated, so I’m not quite sure how successful that will be. But we’re looking at Guatemala and Peru to fill a lot of that timing-wise, and then it... I don’t know. There’s a huge opportunity out there, and yeah, I think we’re in position supply-wise and distribution-wise. Yeah, I think, you know, historically, we went through a couple decades where Mexico just kept growing and growing and growing every year, double digits. And you came to rely on the fact that that was gonna continue to happen. I think industry exports, we've seen that number kind of level off the last few years. I mean, Mexico's still big, but it's not growing at the same rate that it had been. And being that they're the largest supplier of avocados throughout the world, when they stop growing at the same rate, it impacts the industry as a whole. I think, you know, when we started making the investments in Guatemala and Colombia, you know, we did it for a couple of reasons. You know, number one, we wanted leverage against Mexico because we know that there's certain times of the year where we are completely dependent upon the product that's coming out of the country, and we wanted some leverage there. Mm-hmm. Number two, we knew with Peru going into export markets, we were gonna need supply for those countries. And Guatemala and Colombia already... You know, they're well-designed for being able to go into those markets. And then, you know, kind of the last thing really would be to kind of counteract the impact of slowing growth in some of the other markets, which is kind of what we're seeing today out of Mexico. You know, it's not reducing, but in order to keep the supply, consumption growing at the rate that it has, you know, I think these supplemental supplies out of these countries will be helpful. Certainly, we're not in Guatemala and Colombia at anywhere near the scale we went into Peru, and I doubt we ever will be. You know, we truly view it as a supplement to Mexico because we still have a significant presence there. But I, I think it's certainly gonna help give us the leverage that we need. It's gonna help us put those kind of fixed price programs in with customers on a year-round basis, which is particularly important for, you know, like some of our little larger food service customers who really can't fluctuate menu pricing. I think they place a ton of value on that, and it gives us a huge advantage over our competitors, and it gets us more business throughout the year, not just, you know, during those windows that we have it today. So, you know, there's... I think getting back to the original question, you know, I think Peru probably has grown too fast in a very short period of time. I think that, you know, with these, some of these other emerging markets are watching Peru, and I don't think that it will grow—they'll grow as quickly. Mexico is certainly probably not growing at the same rate that that it has been. Well, you need the land and water to grow, too, and in some areas are about out. Not out, but out of new opportunities. Yeah. Okay. Thinking about profit per box, you have the growth opportunity in terms of growing the number of boxes that you market and distribute. What opportunities do you have to grow margins? And, is it subject to, you know, things like better capacity utilization as you, as you've built out- Mm-hmm ... all this capacity, ancillary services? Kind of, what are the rank order of opportunities? First of all, we're looking at our costs everywhere, especially in Peru, where we've been on a very aggressive growth mode. Well, now we're starting to flatten out on the growth. We're not stopping, but we're slowing it down. So we're taking a look at all of the overhead and personnel and everything else to make sure we have the right number. And that's a big number, by the way. So that's first and foremost, and then Guatemala is still in a development stage, so that's still going. But, like on avocados in Peru, we're pretty well done on planning. We're almost done on the blueberry planning. Another couple of years, that's not a huge deal. So we're... Now we have to be efficient, and we're making cuts where we need to. Yeah. I probably don't have too much more to add on the farming side. Certainly, it impacts the marketing side as well, though. We've got packing house capacity, we have distribution capacity that's not being- Mm ... fully utilized. I think certainly as we grow, it helps to utilize that better. And again, I think, you know, with growth rates being a little bit lower over the last few years than what we'd seen in the prior decade, we're not growing into that, or hadn't grown into that capacity as quickly as we'd originally expected to. So it's causing us to look at, you know, maybe some things that when we were in a high growth environment we didn't need to look at as closely. Mm. You know, cost rationalization, cost cutting is a thing that, you know, maybe we didn't spend as much time doing at Mission in the past 'cause we really didn't need to. We were focused on growth and positioning in the market, and driving the bottom line through driving the top line. While we still think that's going to happen, you know, I think that, you know, the bit of a slowdown has caused us to look at things a little bit differently and certainly rationalize our cost structure, both in the farms as well as in our marketing business. One thing that's come out of this Peru deal last year, where there was a glut, a lot of these bigger growers who were trying to market their own, calling us, wanting us to pack and market. Now, we're taking a little bit of it where we see an opportunity, but, and we're in a good position, especially since we're pulling it through all the way to the retailer, and, we can get as much of it as we want, I guess, is what I'm saying. Yeah. But we're gonna be cautious. We don't want to overload our own stuff. Yeah. Thinking about the international farming business, the Peru operations, profitability last year was excellent. It's been a little bit lighter this year. I know you've had costs go up, but prices have come down a bit. How does what's happening in, you know, the pricing dynamics we talked about- ... out of Mexico impact your ability to realize price out of Peru? And- Yeah ... I know you talked about the, you know, the flat price arrangements that you have with your customers. How much does that insulate you from to what we've seen in the last few months on pricing in the market? Well, it helps, assuming your costs aren't higher than what you're selling it for, which sometimes happen. Yeah, I mean, we're seeing growth in the marketplace, number one. You're seeing some consolidation in the marketplace, which you've read about. We're just in a good position to win that battle. Matter of fact, we're in the process of doing that. As far as picking up new business here in the U.S., we're looking at all of our costs again in, in Peru and, and whatnot, trying to be as lean and mean as we can, and get back to basics and- Yeah ... slow down on the CapEx and polish the helmet, so to speak. Yeah. You know, talking specifically- Mm ... about Peru, Ben. I think when we go back to last year, in the early—you know, as we went through the early part of 2022, avocados were probably at the highest prices that we would have seen in close to a decade. I think our average selling price during our fiscal second quarter of 2022 was over $2 a pound. Really unheard of levels, and levels that aren't sustainable for long-term demand growth. So Peru, when the preseason started, it was starting out in an environment that looked like that. So there was very elevated pricing early on. It was very easy to set programs with customers at price points that we were comfortable with because we were starting from a high price level. I think we were dealing with inflationary pressures and cost growth. It's just the fact that pricing was really high masked the impact of it. As we transitioned to the fourth quarter, our fiscal fourth quarter last year, which would be, you know, August, September, and October, you know, we saw a big drop-off in average selling prices as the newer Mexico crop came on board, which was larger than it had been. Combined with the fact that we really didn't get the right size curve, so at the end of the season, whereas, whereas we had a lot of program sales early, we were selling fruit late in the season in, in the spot markets because we had the wrong mix, or we were having to do programs at the end with retailers, to get them to move fruit through that were competitive with Mexico pricing. So while I would say if we compare like third quarter, year-over-year, yeah, last year was much stronger, but it did taper off in the fourth quarter. When we look at this year, we kinda started off in an environment that was a little bit different. Pricing was lower, it wasn't at the elevated levels- Mm. ... so we weren't able to put programs in place with customers at the same price points that we saw. We did see a lower, slightly lower cost environment this year. Some of those inflationary pressures had receded, but the drop-off in pricing more than outweighed it. I think the thing is that when we look at input costs at our farms, they're driven by other macroeconomic factors that can be different than what drives avocado pricing, the true supply and demand in the short period. So I think that's what we've been a victim to, and, and we can be, you know, in short periods of time, we can see ourselves get out of balance there. We know that over the long haul, it, it will course correct. We're already seeing behavior change in terms of you know, there aren't new trees being planted in Peru, scaling back, you know, production, you know, as we look to go forward, but it takes a few years for that to correct itself. So I mean, I think that, you know, we talked about it a little bit earlier, you know, price is an important driver. I think that as we look to next year, we're gonna take meaningful steps to reduce cost structure in the farm, to be able to drive a margin at a lower price point than maybe what it would've looked like this year or last year. And then, continue to focus on yield improvements, getting that product into the right market. Well, just the one comment about the fixed price programs, those tend to be exclusive to North America. So the percentage of the fruit we bring into the North American market, I would say you know, 90%-85% of that is locked up in a program before it arrives. When we go to Europe and Asia, we have programs in place, but they're not fixed-price programs. We have volume commitments, and the prices are set later. So those are still gonna be susceptible to movements in pricing, I think, as we move through the season. So again, important to us to make sure that certain markets aren't being overloaded, not really by us, but by the industry as a whole, and understanding what the impact that supply is gonna have on where pricing ultimately settles. I think the real differentiation here, too, with regarding Peru and what our competition is doing, we carry it all the way to the customer, retailer, food service. We're vertical from the farm all the way to the customer, not the consumer, but the next level up, which nobody else is in this space, at least here in the U.S. There's a little bit of it in Europe with a company called Westfalia, but not to the degree we are. So, that'll help offset the competition- Yeah ... and, help on margin. What do you think is the right balance of, you know, international farming or first-party fruit versus marketing and distribution? You talked about investments in Guatemala and elsewhere. Do you wanna grow production there in the same way that you have in Peru or do something different? That's a shorter window, so we'll do less, of course. Yeah. I think our number of 20% overall is still- Okay ... solid. We just need enough to make sure we can make those commitments in a window. Or if a customer says, "Give me a price. Well, you better make sure you have the product. Mm-hmm. You know, it's just enough. It's an insurance policy. Yeah, I think Steve's right. I mean, we're at. I think last year we were at about 19%. It'll likely be a little lower than that this year, just based on supply dynamics from different countries of origin. I think when we look at our long-term models, we don't see the number getting above, like, 25, based on how we think the industry as a whole is gonna grow. But we think, to Steve's point, that's enough to enable us to do what we want to do on the marketing side of the business. I would say, though, kind of leaning back to what we talked about before, a lot of these assets are still in their early stages of development. And we've got close to 750 hectares planted in Guatemala that aren't producing any fruit yet. So we have assets on our balance sheet that really aren't fully utilized or really generating, you know, contributing to the bottom line yet. So, you know, while there is volatility within the farming segment, there's also assets that we have invested in that really aren't producing results yet. In Peru, it's more mature there, but we still have opportunities for yield improvements in some of the younger farms that are there. So some things should happen naturally. There's natural tailwinds to, you know, improve the bottom line, but again, we still need to manage the other risks that are out there along the way. I wanted to ask about that. Oh, do you have a question? I was just curious, mangoes and blueberries are something that you see a lot of growth from, or they just kind of came along with the avocados and they're not related? We'll start with mangoes. We just got into it for the second time, a year ago. First time we lost more money than we knew we had, but we- Mm-hmm. ... we're changing the model. Mangoes are the most consumed fruit in the world. They grow in a lot of the areas where the avocados are, and in many cases, we use the same teams. We got back in it, for reasons, number one, it's very high growth category. There's no leader in the space. Retail's crying for it. We have the distribution model already in place, i.e., ripening, transportation, coming, that nobody else has. So is it gonna be easy? No, but it's the demand exceeds supply for now. All the big guys want mango programs, and you get more of their avocado business if you can do it. It's on the same truck, going through the same ripening facility, so there's a lot of secondary benefits to it. How did you lose money the first time? It's an easy story. Every day, at least back in—this is back in the 1990s—you would pay for the fruit on the tree, and you'd take it to the packing house and then figure out how you're gonna sell it. Well, I thought, you know, let's—we need to know what our costs are, so we know what the price of retailer for, 'cause he wants that price before you pick it. So we went down and bought a bunch of fruit on the tree down in Mexico, and paid for it. What we hadn't accounted for was a hurricane- Mm ...that parked over Nayarit for a week and a half. And couldn't get in to harvest it, so I went down and looked at it. Well, it still looked all right after a week and a half. Let's start going, and got it to the packing house, looked at it, met it at the border, still okay. By the time it got to New York or Chicago, it was running out the back of the door of the truck. We had 150 trucks on the road, and had prepaid that, so we were out of the mango business by about noon that day. But we got back into it 'cause I forgot about it. So we had a meeting in our office. The accountant says... This was before Bryan. The guy says: "Hey, we gotta have a mango meeting." "Okay." August 24th, 1999, I'll never forget it, 12 o'clock. He saw these papers on these. "Look at those numbers." I said, "God, those are great numbers. What do those brackets mean?" He says, "You've lost, I don't know, $5 million, $2 million in three weeks." I said, "That's impossible." He says, "How's that impossible?" I said, "We don't have $2 million, you knew something was wrong." So we were out of it, but obviously, age and nature, we're back in it. I, I- It's actually doing okay. ... The takeaway I have from hearing those stories is that Steve and the team are always willing to kind of push the envelope. You know, we wanna be at the leading edge, not afraid to move the category forward, whether that be in avocados or mangoes. Not everything works out all the time, but if you as long as you learn from it, you can keep moving forward. And I think that's what helps over 40 years, has helped us grow from a startup to the largest avocado distributor and marketer in the world. And, yeah- Gotta make adjustments as you go. 'Cause we're certainly not the oldest avocado company. You know, when we started up, there was a guy that had 80% market share, and now we're bigger than they are. So it's, you know, decisions that were made along the way, willing to take action, willing to be at the forefront, you know, operate in ambiguity, sometimes without perfect information, but know how to keep it moving forward is what's made Mission so successful, and will continue to. Maybe last question- Hopefully, it's a happy ending at the second. It will be. Maybe last question: What are your aspirations around M&A, and what does the balance sheet afford you to pursue? Yeah. I mean, historically, Mission's not been an acquisitive company. We focused on organic growth. I mean, even the acquisition we did in Peru was really buying out a joint venture partner. We were involved in that from the very beginning. You know, I think we look at opportunities as they come along, but there's, you know... It's not something that is a critical component of our growth plan. That being said, you know, the deal with the market, and the U.S. in particular, has become more fragmented over the last few years. And with growth rates slowing down a bit, I could see opportunities for consolidation within the space. I think it's just a matter of, you know, kind of seeing how quickly that unfolds. I think, you know, when we look at our balance sheet, you know, in the short term, I think our focus is to, you know. I think we have a manageable leverage ratio. It's grown a little bit more than we like over the last years because our EBITDA hasn't lived up to, to where we'd like it to be. I think as a result, you know, we're spending time to, you know, kind of maybe tighten the belt on CapEx even a little further than what it normally would have done. It's really important to us to get in a position where we're generating meaningful free cash flow again, so we can pay down debt, bring leverage back to where we'd like it to be, which is, you know, sub 2, probably 1.5 range, is where we'd ultimately like to live, maybe even lower than that. Execute on some of the share buybacks we talked about or disclosed during our last earnings release, and then potentially have, you know, a bit of a war chest out there to be able to do M&A activity if it indeed, you know, the right deal comes along. Opportunity. Yeah, regarding M&A, I mean, I think there are some opportunities out there. The question is, what are you buying? Something that's old, tired, and worn out, out of position, or how does it add value to us? Yeah. Okay, understood. Yeah. Okay, I think we'll leave it there. Steve, Bryan, thanks for your time. Okay. Thank you, Ben. Appreciate it. Appreciate it. Thank you.