Calavo Growers’ acquisition of fresh-food firm Renaissance Food Group will give the US avocado supplier a competitive advantage in the grocery space, according to an analyst.

Yesterday (26 May), Calavo Growers announced the acquisition of RFG, a privately-owned, California-based fresh food group. The company, formed in 2003, has experienced 54% compound annual growth in sales from inception until 2010. RFG’s revenue is expected to reach over US$100m for the current financial year.

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“We believe that the addition of RFG allows Calavo to improve distribution, at both existing and new accounts, while positioning the company at a competitive supply advantage in the grocery space,” said BB&T analyst Heather Jones.

Aside from the potential for sales synergies, Jones expects Calavo to harvest cost synergies due to SG&A overlap and the combined operating leverage of the two companies. “As an example, product sourcing for RFG is one area where CVGW can leverage its existing fresh fruit product and relationship base,” she said.

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