Greetings and welcome to the Calavo Growers Incorporated First Quarter 2021 Earnings Call. It is now my pleasure to introduce your host, Lisa Mueller, from Investor Relations. Thank you, Lisa, you may begin.

Thank you, operator, and thank you all for joining us today to discuss Calavo Growers' first quarter 2021 financial results. This afternoon we issued our earnings release, and this document is available in the Investor Relations section of our website at ir.calavo.com. I'm here today with Jim Gibson, Chief Executive Officer of Calavo, and Kevin Manion, Chief Financial Officer. On today's call, management will provide prepared remarks and then we will open the call up for your questions. Before we begin, I would like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts, such as statements about our outlook for revenue and adjusted EBITDA, are also forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from these forward-looking statements is contained in our SEC filings, including our reports on Form 10-K and 10-Q. With that, I would now like to turn the call over to Jim Gibson. Jim, please go ahead.

Thank you, Lisa, and good afternoon, everyone. We hope you and your families are healthy and safe during this challenging time. We appreciate you joining us to discuss our 2021 first quarter results. Today, I'll kick things off with a high-level overview of the quarter and the current state of our company and the industry. Then, Kevin will provide commentary on our first quarter financial results, balance sheet, and guidance. We will then open up the line for Q&A. It seems incredible that one year ago we were facing the first real effects of the COVID pandemic, and while we have been successfully adapting to the new environment over the last several quarters, our first quarter results were mixed, reflecting improvement in some areas and challenges in others due to the ongoing impact of the pandemic. Our core avocado business delivered improved results for the quarter. Market demand for avocados continues to rise, albeit at a slower pace due to the pandemic, and supply remains plentiful given the strong crop out of Mexico. These dynamics continue to weigh on prices, which, on average, were down 14% year-over-year. However, we grew our volume and delivered higher avocado gross margins in the quarter as we did a good job of managing our pricing spread and our sales mix. Our RFG business was negatively impacted by industry-wide supply chain disruptions, namely delivery delays at most of the U.S. ports due to the implementation of additional safety measures related to the pandemic. This dynamic impacted the availability and quality of some fresh fruit and vegetables, which created added challenges. We also continue to be impacted by the closure of our co-packing partner in the Midwest from April 2020. Our Foods segment was again adversely affected by lower foodservice demand resulting from the pandemic, offset slightly by favorable input commodity prices. Taken in the aggregate, our first quarter results were generally in line with our expectations and adjusted EBITDA was at the high end of our guidance range. With respect to our Fresh business, it bears repeating that even with increasing demand, when we are sourcing avocados, we are buying a full spectrum of sizes and grades that come off the trees, and our sales team then moves to match these sizes and grades with appropriate customers. Food service has historically represented about 20% of our avocado business, usually serving to absorb the supply of Number 2 grade fruit and at the same time allows us to retain margin and good volume growth. This has been a challenge over the last several quarters as our expectation is that as demand returns from our foodservice customers in the second half of 2021, we will be able to return to our pre-pandemic sales and gross margin levels. In terms of operations, we saw good results and savings from increasing utilization of our Uruapan packing house. With respect to our RFG business, we believe the challenges we encountered during the quarter are short-term in nature, and we are cautiously optimistic that we will return to top-line growth and increased profitability in the second half of the year as the country’s ports are returning to more normalized conditions and we move beyond the anniversary of the closure of our Midwest packing house from April of 2020. In addition, as the pandemic becomes less of an operational risk, many of our facilities will return to more normalized operations, which should boost margins as well. Finally, our Foods segment continued to be adversely affected by lower foodservice demand resulting from the pandemic, offset slightly by favorable input commodity prices as we take advantage of the excess supply of avocados from Mexico. We have made great strides with our ESG initiatives this quarter. We joined the Sustainability Council and the Hass Avocado Task Force on Avocado Sustainability to contribute to the industry’s sustainability commitment. We have also begun developing a carbon footprint measurement so we can better measure our impact and report on this metric to our stakeholders. In Mexico, we are now saving upwards of 5,000 liters of water per week following new efforts to optimize water usage in the fruit washing area. We have also expanded our relationship with food technology company, Apeel, bringing their plant-based technology to customers in Florida and Texas. And our use of Shelf Engine's intelligent forecast system has been implemented in one of our largest retail partners and is already reducing food waste by reducing spoilage and eliminating shrinkage. Finally, our upcoming Annual Shareholder Meeting is mainly virtual, and our use of notice and access saves costs and is environmentally friendly. Turning to governance, it is our long-term objective to both rightsize and refresh our Board. Lee Cole recently stepped down from our Board following his retirement as CEO and Chairman last year. We are grateful to Lee for his decades-long commitment to Calavo and the strong foundation he put in place that we are building upon today. Lee's departure and that of two other long-standing Directors, Dorcas Thille and Gene Carbone, are in line with our Board's commitment to reduce its size to nine members by 2023, of which seven will be independent. We are thrilled to now also have Farha Aslam on our Board as of January 2021. She serves on our audit, compensation, and sustainability committees and she has already made great contributions. Our Board's independence rate now stands at over 63% with seven independent directors out of a total of 11. Our governance activities in the quarter include the Board's creation of a Sustainability and Corporate Responsibility Committee and the implementation of an Anti-Hedging/Anti-Pledging Policy. Both initiatives reflect long-standing values of our company and yet are an opportunity for us to continue to formalize and lay the foundation for strong ESG leadership in the years to come. Looking ahead, we expect to see a continuation of current trends at least through the first half of 2021, with a large supply of avocados from Mexico continuing to weigh on prices and foodservice demand unable to fully recover until a majority of the country is vaccinated and we move closer to herd immunity. I want to thank our entire team of 4,000 colleagues across our global operations for their tireless efforts and their ability to be both flexible and innovative, regardless of the many obstacles we had to overcome. In the meantime, we continue to implement strategic initiatives designed to enhance our long-term growth prospects, capitalizing on opportunities to increase operating leverage and realize synergies across our entire organization. We remain committed to investing in our people and advancing our sustainability initiatives as well as maintaining best-in-class communication with our investors, all with a focus on long-term growth, improved profitability, and enhanced value for our shareholders. With that, I'll turn the call over to Kevin.

Thank you, Jim, and good afternoon from our global headquarters in scenic Santa Paula, California. I know that you have other earnings call options at this time of day, and I thank you for joining us, particularly our new analysts at Seaport Global and D.A. Davidson. I'll start by discussing our financial results for the first quarter, followed by our balance sheet and outlook. Please note that all comparisons are year-over-year unless otherwise noted. We will also be discussing non-GAAP results, and a reconciliation of non-GAAP financial measures is included in our earnings release. We issued our proxy statement earlier in the month which identifies a number of governance enhancements such as our Anti-Hedging/Anti-Pledging, board self-evaluations, and creation of a Sustainability Committee. We also have updated an Investor Relations presentation on our website at ir.calavo.com. On a consolidated basis, first quarter revenue was $220 million, which is at the midpoint of our guidance. This is a decline of $53 million or 19% year-over-year. This was primarily driven by three factors: lower avocado prices, which decreased 14% from last year and had an impact of $16 million; $25 million lower RFG revenues from the loss of our Midwest co-packing relationship which, as Jim said, cycles in April; and the ongoing impact of COVID-19, which particularly impacted our foodservice customers. Even with the decline in consolidated revenue, avocado volumes increased 2% year-over-year reflecting the ongoing trend of higher consumer demand. Gross profit increased 13% year-over-year to $17.8 million from $15.8 million in the first quarter of 2020, and our gross profit margin percentage expanded to 8.1% from 5.8%. The increase in gross profit and margin percentage was mainly due to improvements in the Fresh segment as we delivered higher avocado gross margins in the quarter by managing our pricing spread and sales mix better than in the prior year. As you may remember, the fruit quality was a significant issue last year with avocados. These improvements were partially offset by a decline in gross profits in the RFG business due to a number of factors, including higher labor costs and increased spoilage on fresh fruit and vegetables resulting from major port delays, poor quality and yield due to weather events in Florida and Central America, and unabsorbed overhead due to lower overall volumes. SG&A expenses declined 13% to $14.2 million from $16.3 million in the year-ago quarter, primarily due to the decrease in salary and benefit expense as a result of our consolidation initiatives enacted in May 2020. Adjusted EBITDA was $9.4 million for the quarter compared to $4.5 million for the comparable period in the prior year, and came in at the high end of our guidance that we provided on last quarter's call. Net income for the first quarter was $5.3 million or $0.30 per share, up from a net loss of $938,000 or negative $0.05 per share loss in the prior-year period. Adjusted net income was $3 million or $0.17 per share compared to $0.8 million or $0.04 last year. Now, moving on to our three business segments. Sales in the Fresh segment decreased 13% year-over-year to $115.5 million from $133.2 million in the first quarter of 2020. Importantly, while revenue declined, avocado volume increased 2% from the prior year as consumer demand for avocados continues to grow. Similar to last quarter, this quarter's higher volume was offset by a 14% decline in the average selling price as a result of increased market supply due to the large Mexico harvest this year. And unlike last year, when foodservice and wholesalers that serve smaller retailers and restaurants helped absorb supply, COVID continued to constrain sales to these customers in the first quarter. As a reminder, our exposure to foodservice is about 20% and wholesalers comprise an incremental 6%. Gross profit in the Fresh segment increased $6.5 million to $13.1 million or 11.3% of revenue, up from $6.6 million or 4.9% of revenue in the first quarter of 2020. Please note that on the last table of the earnings press release, we disclose pounds of avocados sold and gross margin of $0.12 per pound compared to $0.05 per pound last year. At 25 pounds per case, this returns us to our historical target range of $3 to $4 per case. In RFG, sales declined to $90.3 million for the first quarter from $120.9 million in the prior-year period. The decrease primarily reflects lost sales from the termination of our co-packer relationship in the Midwest, which ended in April of last year. So we will lap comparison during the second quarter. Excluding the co-packer impact, revenue declined 6%, primarily driven by a 4% decline in volume and less favorable product mix of more cut fruit and vegetables compared to last year when the mix consisted of more value-added meals. Gross profit for the first quarter decreased to breakeven compared to a gross profit of $2.9 million or 2.4% of sales in the same period last year. This decline was due to weather-related supply chain disruptions leading to major port delays and poor quality fruit, which impacted yields. Labor shortages due to COVID also contributed to lower yields and higher costs. For the Food segment, sales were again impacted by soft demand in the foodservice channel due to COVID-19. For the quarter, sales declined to $16.5 million, down from $20.5 million in the year-ago quarter. Foodservice comprises about 50% of this business. Gross profit was $4.7 million or 28.7% of sales as compared to $6.4 million or 31% of sales in the first quarter of 2020. The lower gross margin was primarily the result of lower volumes, partially offset by a decrease in avocado costs. Turning to our balance sheet, we ended the quarter with $148 million of cash, liquid investments, and available debt capacity. During the quarter, we amended and extended the terms of our secured credit facility, increasing the revolver commitment by $20 million now to a total of $150 million and extending the maturity by five years. Total debt including finance leases was $45 million, and our leverage ratio was 0.75 times. We continue to have a strong balance sheet and low leverage, positioning us to take advantage of potential opportunities and invest in the current infrastructure for the future. In addition, we paid our annual cash dividend of $1.15 per share in December, which represented a 4.5% increase from the prior year and our ninth consecutive year of increasing dividends. This yields about 1.5% at recent stock prices. Finally, in the first quarter, we entered into a separation agreement with FreshRealm. Essentially, we relinquished our previously written-off promissory note and equity in FreshRealm in exchange for a new $6 million note and equity participation in any future monetization event. As we look to the second quarter of 2021, we see a continued near-term impact from the pandemic as it remains difficult to predict when foodservice demand will return to pre-COVID-19 levels. While we continue to see avocado volumes growing, we believe that the same supply and demand dynamics will keep pricing at lower levels than the prior year. In addition, our RFG business continues to face increased labor costs and unabsorbed overhead due to lower volumes. Therefore, we expect second quarter revenues to be in a range of $255 million to $275 million, which is a year-over-year decrease of 6% at the midpoint, and adjusted EBITDA to be between $14 million and $18 million, which is an increase of 19% at the midpoint from the second quarter of 2020. The slightly wider EBITDA guidance range reflects both the impact of the recent severe weather events in the Northwest, Texas, and the Northeast, where we were not able to ship or produce in our RFG facilities in those regions as well as the near-term uncertainty of our labor pool due to the reluctance of many workers toward getting vaccinated at this time. This forecast also presumes a stable Mexican peso exchange rate. Jim and I look forward to seeing you at two upcoming virtual conferences, the D.A. Davidson Consumer Conference being held tomorrow and the ROTH Annual Conference on March 16. On a final note, Jim and I would like to congratulate our former CEO and Board Chairman Lee Cole on his retirement and thank him again for building this company that we are now entrusted with. With that, I'll turn the call over to the operator for questions.

Thank you. Our first question comes from Brian Holland with D.A. Davidson. Please go ahead with your question.

Hey, good afternoon, gentlemen. It's actually Bill Newby on for Brian Holland today. Thanks for taking my questions.

Hi, Bill.

Welcome.

Could you provide more insight into the supply environment as we shift from Mexico to California? I'm aware of recent changes in Colombia's access to the U.S. market and Peru's expected increase in supply this year. Are you still optimistic that we will see supply tighten from current levels as the year progresses? I'd appreciate any thoughts you have on this and your confidence in the outlook for the rest of the year.

Sure. So, I think as we're looking into the second quarter, definitely Mexico is still going to be a strong player and California will start to come on. So, we expect that supply is going to continue to be strong in this period of time, but we are seeing that as the economy is beginning to open up, we can feel that there is latent demand that is beginning to press on that supply/demand balance. And so, as a result of that, there is pricing pressure on the upside, and we are following that up. So, on our side of the world when that's occurring, we're really working on maintaining that good cost structure that allows us to stay in front of the pricing change. So, we're balancing our inventory position with demand as we move through the supply chain and that allows us in an up-price market to continue to advance margin, and we expect that margin will benefit as well.

All right. No, that's helpful. Appreciate it. Appreciate the color there. And then, I guess, just a couple of quick ones on RFG and I guess how you guys are thinking about the varying dynamics as you move into 2Q and through the rest of the year here. I guess, are you still seeing delays at the U.S. ports, one. And then, I guess any more specificity you can provide on where you guys are seeing tailwinds on the commodity prices and if you expect those to continue into Q2 and latter part of the year?

Yes. For most of the fruit commodities, we are still offshore and expect to remain that way for the majority of the second quarter. We will continue to experience impacts from the quality issues linked to the weather challenges in those regions. As the quarter progresses, I believe the delays are easing, but we are still facing some effects on fruit quality, which will continue to impact us. Additionally, we had a facility in Houston that was closed for a week due to an ice and water issue. Our Clackamas facility in the Pacific Northwest was affected by an ice storm, and we also had a facility in Swedesboro, New Jersey impacted by a snowstorm. All these facilities faced difficulties in February, but they have recovered and are now fully operational. Our expectation is that performance will continue to improve as we progress through the quarter, and as we enter the third quarter, we anticipate moving towards the domestic season, which is typically a strong period for Renaissance.

Yes. I think, as we mentioned in our guidance, we've probably already absorbed a range of $0.5 million to $1 million of cost because of those weather incidents.

Thank you for the insights. Can you provide any further information on the commodity prices?

Well, I think, as Jim said, they’re all imported products now. So, that should be pretty steady, meaning it's high right now and will stay about the same levels for most of the quarter until the domestic fruit starts coming in, and that will lower our overall average price. But right now, particularly melons and pineapples have had a tough road in, and so the prices are high because there are fewer of them. And then sort of the supply chain issue is the fruit's been beat up a little bit in transport as it sits at the ports. And so, by the time we've got it, the efficiency of us getting through that fruit is low and the output of that food is lower, so it's been a tough slog on the margin side on that and we think that will improve as the second quarter goes on.

Thank you. Our next question comes from Eric Larson with Seaport Global Securities. Please proceed with your question.

Yes, good afternoon, everyone. Thank you for taking my questions. I apologize for my cough. My question is about avocado volumes, which are up 2%. Your distribution is 80% retail and 20% foodservice. I'm curious because the industry has consistently experienced double-digit volume growth for a while now. So, I was expecting that 2% volume growth would be higher, especially with stronger retail growth, although somewhat balanced by foodservice. With lower pricing and considering that this product is typically inelastic, I would have anticipated a higher volume figure. What am I possibly overlooking here?

There are several factors at play. Supplies from a major player are affecting prices, and demand isn't quite aligning with historical patterns. Demand is still on the rise but has been impacted on the foodservice side due to restrictions from lockdowns. Shopping habits have changed significantly during the pandemic, with people shopping less frequently, perhaps a couple of times a week or just once a week. This change affects how consumers perceive avocados. During the pandemic, we shifted our focus to promoting bagged avocados, and those sales have increased significantly because it's more convenient for shoppers to grab a bag rather than handle individual pieces of fruit. Additionally, with a decline in foodservice demand, we're purchasing everything available from the field. This has led to an abundance of Number 2 grade products that we don't have sufficient demand for. We're managing the balance between quality and supply against the needs of our customer base during this time. Our main priority is to serve our existing customers well rather than trying to attract new customers at lower prices.

Okay. COVID-19 may have affected consumer buying habits and other factors, which could have reduced the industry's top-line growth rate in the near term. Will the industry be able to return to double-digit growth if conditions normalize?

Well, we certainly believe that's the case. I mean, I think even in the current period right now, we can feel that demand is beginning to press upward. It's lifting, and there’s certainly as a result of that, pressure on price to move upward as well. And so, we think that that's really a good sign in this environment that as we kind of pull through more vaccinations, local governments releasing lockdowns and allowing for businesses to reopen and whatnot, that people are going to get out again and begin to really aggressively buy that grade commodity which is avocado.

Yes, I think one of the things that we certainly saw this quarter is the events that normally propel that margin or that volume growth, whether it's Christmas or something like Super Bowl, the lift was much more muted this year, but the carry of that lift was very short. So historically, I think we'd expect a nice lift for Super Bowl, and then it carries for another week or so. This year, it was a couple of days and back down to normal. And I think those are the things that will bring us back to the opportunity for double-digit growth going forward.

Okay. No, that makes some sense. So, just a real near-term question. You've talked about sort of the overabundance of Number 2 fruit and kind of an overhang, and maybe a pricing overhang on the market. Are we getting past that amount of fruit that's coming to market? Was that a grower issue? A weather issue? And is that an overhang that still exists with us and maybe even until foodservice recovers?

It's natural to have Number 2 grade fruit alongside everything else coming out of the field. At this time, with foodservice not fully recovered, those products serve as suitable outlets for us, enabling us to maintain our margins while also working to expand the business, as we can offer a variety of sizes and grades.

Got it, okay. So, it's still really a foodservice issue as opposed to a crop quality or something like that that's taking place in Mexico?

Correct.

Absolutely. I think what we've seen overall is the quantity of Number 2s has decreased from last year when it was a very big issue that did have an overhang. We don't see that issue this year.

Got it. Thank you. That's what I was trying to get to. Thank you very much.

Thank you. Our next question comes from Ben Bienvenu with Stephens. Please proceed with your question.

Hey guys, good afternoon. This is actually Pooran jumping on for Ben.

Hello, Pooran.

Good afternoon.

Hi. Good afternoon. I just wanted to start off and just ask about avocado prices. I know you seasonally get a bump kind of Super Bowl and a little bit after, but we've seen a pretty big price rally here in recent weeks. So, I just wanted to get your take. Is this that Super Bowl, maybe that March Madness kind of rally, is this maybe a return to foodservice? I know you said your foodservice business was lower, but maybe the pace of improvement has been greater. I just kind of want to get your take on the recent avocado price rise.

Yes, well, I think, definitely there is the feel that that demand is increasing or it is about to really increase. And so, we're seeing rising prices coming out of Mexico and transversely, the price is going up out to the retail customer base. And so, that is beginning to occur, and as it does occur, there is opportunity for us to generate margin. And as a result of the higher prices, it allows for us to aggressively go out and seek new customers.

Okay, great. Could you provide as much detail as possible about your conversations with customers in the foodservice sector? You mentioned improvement and an expectation of increased demand. Are you detecting this in your discussions with your customers, or is it just a general perception?

Well, I think foodservice is kind of in a couple of different brackets. There is more like the quick-serve kind of concept, and that is definitely recovering and has been recovering very well and working pretty well for us. What we're looking for is more of the wholesale environment for us that services individual restaurants and small restaurant chains, and that has been pretty much devastatingly impacted by the pandemic. And so, as local governments begin to open up and allow for that type of dining experience, then that is going to open up opportunities for us to sell into that environment again. And our expectation is that it feels like with the pace of the vaccines picking up, Johnson & Johnson now in play, we believe that distribution is going to get stronger and stronger. Governments are beginning to open up in the environments that they operate in. And then the other piece of it is that we're moving into springtime now where weather is getting nicer and nicer, and people want to get out, and even in those generally colder environments, the weather is getting nicer and more apt to handle the dining experience as they transition.

I appreciate the information. I have one more question. Do higher freight rates pose any issues for you? Are you concerned about that, and how, if at all, is it affecting avocado prices? Is there any connection?

Freight is certainly an important factor for us at the moment. It serves as a key indicator we track and is reflected in our pricing. We generally have contracts for various routes, which are holding steady, but we are actively monitoring the situation, especially for the routes from the border to our value-added distribution centers, as we aim to lower those costs. We collaborate with our customers, some of whom opt for direct loads straight from the border. This strategy helps us mitigate some of the natural freight costs associated with stopovers in direct deliveries. We have a significant amount of freight on the road, including avocados and fresh food from our Renaissance operations. When possible, we either combine loads or find backhauls to reduce the overall freight costs.

Thank you. Our next question comes from Mitch Pinheiro with Sturdivant & Co. Please proceed with your question.

Hi, good afternoon. I wanted to ask about the avocado margins. They were better than I expected, and I know you benefit from lower food costs and some foreign currency support. However, I was surprised considering the challenges you've had, especially with the Number 2 fruit. How did you manage to achieve those margins?

I think our sales crowd is doing a really good job of managing inside of this environment, specifically on the inventory control side so that we're always looking at the fresh cost and putting price over the top of that. But then the other piece that we've really focused on in this quarter and will continue throughout the balance of the year is working on the non-fruit costs, meaning the manufacturing and as I was just talking about, the distribution piece of our business. And so, one of the things we're really focused on, specifically in Mexico, is pushing a lot of material through our packing out so that we take on all of the efficiencies, the volume variance associated with fixed overhead, and we can generally translate that efficiency into additional margin at the bottom line.

And that's even with a 2% volume increase? I mean, that's not a lot of throughput leverage typically, but you're still able to accomplish that with lower volume growth.

We are working in the factory to optimize throughput, which involves managing hours and overtime. Additionally, there are instances when we cannot purchase externally and we are making deliberate choices to maximize the volume processed through our packing house to achieve full efficiency.

So all things being equal, can we expect continued favorable throughput and efficiency moving forward?

Correct. Yes, we have initiatives extending beyond the packing house into our supply chain. This includes utilizing our value-added distribution centers and optimizing our freight lanes across the three business units we operate in. There are also opportunities on the non-fruit side that can enhance the overall program, which is our main focus in the current environment.

Okay, I have one more question. It might have already been addressed, but with RFG, sales were slightly lower than I anticipated. You attributed this mainly to the comparison with the co-packer, but it seems a bit lower. Was the inability to sell due to port congestion and similar issues, or was it primarily just the loss of that co-packer?

Yes.

Kevin mentioned that during this quarter, there were several holidays that typically benefit Renaissance. Specifically, in December and early January, there were waves of the pandemic that significantly affected both demand and our operations, particularly in Southern California and Houston. As a result, we experienced a decline in the expected boost from retail holiday sales around Thanksgiving, Christmas, and the Super Bowl.

Okay. Thank you for your time.

Thanks, buddy.

Thank you. Our next question comes from Ryan Meyers with Lake Street Capital Markets. Please proceed with your question.

Yes, hi, guys. Thanks for taking my questions. First one for me. Could you give us some additional color on the sales mix in the Fresh Foods segment and then how that helped kind of drive the gross margin there?

Fresh is solely composed of avocados?

Correct.

So the mix there is really more of a customer movement as compared to anything else, but I think maybe your questioning is compared to last year where we had Number 2 quality, supply was probably 80% higher than it was this year. And Number 2 qualities last year just didn't have a home to go to. And so, they were really depressing our margins. This year we didn't have as much, and our sales force has done a really great job throughout the pandemic of now finding a home for everything. So, I think that's the mix you are referring to.

Right. You mentioned that 20% of the mix was foodservices. How did this change throughout 2020 as you navigated the pandemic, and what do you expect that percentage to be moving forward? Will it remain around 20%, or do you anticipate it will shift as conditions improve?

Yes, certainly. I believe that out of that 20%, the business segment experienced a decline between 20% and 50%. However, our teams identified several new locations to allocate products, which was a positive and innovative development. I am confident that foodservice will rebound, and restaurants will recover without a doubt over time, driven by significant pent-up demand. Unfortunately, we do not have a clear timeline for this recovery. It is likely that many of our current restaurant owners will be replaced by new operators, which is a disappointment from a turnover standpoint. Nevertheless, we are optimistic about the trends in selling fresh products and our food products, like guacamole, in those restaurant spaces. One recent acquisition that we closed last February, Simply Fresh Fruit, did not align with our timing, but we remain hopeful about the hospitality sector's revival, which will provide an additional great opportunity for us. I believe that the entire 20% decline will eventually return. If we analyze the situation, a 20% decline ranging from 20% to 50% implies a recovery in the range of 4% to 10%. Ideally, I expect our volume recovery to be closer to the 10% side than the 4%.

Great, that's helpful, and that's all I had. Thank you.

Thanks, buddy.

There are no further questions at this time. I would like to turn the floor back over to Jim Gibson for any closing comments.

I want to thank our shareholders for your continued support. And I look forward to updating you on our progress in our next quarter's earnings call. Until then, stay healthy and safe.

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful evening.