Steve alluded to the growth CapEx in the UK, where there is — we see a real opportunity there. I think in Europe, our plan is to use third-party distributors today. There may be some point in time down the road where we need to invest in our own facilities, but we feel like we’ve got a — identified a partner that we can work with over there that can kind of help us provide the value-added services direct to retail that we need, to truly be a competitive force in that market. And I think beyond that, when we look at the farms, I think we’ve got all the trees planted in Peru today that we intend to plant for the foreseeable future. I think that we’re — our buildout is complete. We have the packing capacity we need related to avocados. And I think we’re definitely seeing a scale-back there.
We still — we’re going to be building a packing house in our Guatemala location to service the fruit that we’re going to be harvesting there off of our own farms. So, that is a CapEx we still need to do. And there’ll likely be a little more acreage planted in Guatemala over the next two years, but certainly a major step down from where we were at. And those are really the only other things that are on our radar from a farming standpoint right now. I think Blueberries, the last part that we alluded to, very much focused on this joint venture being able to fund its investments through operating cash flow. I think we’ve agreed with our partner that that’s how we want the CapEx to move going forward. So, we’re kind of at a point right now where we slowed down some of the CapEx there after getting off to kind of a rough start this year with Blueberries.
Certainly, we’re seeing a dramatically different environment with Blueberries today, and it might enable us — depending on the cash flows that are generated there, it might enable us to pull some of those development efforts back in. But again, even Blueberries has a defined overall investment that we’re going to make. It’s just over — determining over how many years we’re going to do it.
Stephen J. Barnard: And one thing about those Blueberries, is we run those through our — actually, our avocado packing facility there in Peru during the off-season. So, it helps utilize that giant facility also and lower our overall cost year-round.
Ben Bienvenu: Okay. That’s great. Thanks for all the detail, and thank you for taking the questions.
Bryan Giles: Sure. Thanks, Ben.
Stephen J. Barnard: Thanks, Ben.
Operator: Thank you. Our next question comes from the line of Gerry Sweeney with ROTH Capital Partners. Please proceed with your question.
Gerry Sweeney: Hey. Good afternoon, Steve and Bryan. Thanks for taking my call and happy [Multiple Speakers]
Stephen J. Barnard: Good morning.
Bryan Giles: Thank you.
Gerry Sweeney: Ben talked about the cost controls on the International side. But one thing you — I think you highlighted was improvements in the marketing strategy. And I’m assuming that’s through Europe and the UK. I was wondering if you could give a little bit more detail of what you’re sort of changing on that front, if I heard that correct?
Bryan Giles: Yes. I think that we’re looking at a few things, Gerry. Certainly, market allocation comes into play. When we — there’s four primary markets, or three primary markets we send fruit to, North America, which is predominantly the US. We’ve got Europe, and we’ve got Asia. We — South America, Chile, is an overflow market. We really try to minimize the amount of fruit that goes there, but it’s available if need be. And then worst case scenario, there’s fruit that doesn’t get exported, it stays in country and goes to processing. Pecking order in terms of returns, in-country fruit is the lowest return. Chile would be the second lowest. And then kind of — we kind of manage the overall returns in those other three primary export markets.
I think that certainly within the US, the amount of fruit that we can bring here and the pricing is determined by, not only by how much Peruvian fruit the industry as a whole sends, but by what’s going on in Mexico. So, certainly we’re going to be evaluating the Mexico crop as we move through the season to see if there are more opportunities to bring — opportunities to bring more Peruvian fruit to the US market in the coming year. And we think that there’s a high probability that that will be the case. I think when we look to Europe, which is probably the market that takes second-most volume, certainly the UK operation being in its second year next year, we’re looking to significantly expand the amount of fruit that we run through it. And we actually generated very solid returns through that location, kind of employing our direct-to-retail strategy.
So, we’ll be able to do more of that. I think in Mainland Europe, we still sell a lot through wholesale markets. We didn’t have the repackaging capabilities on our own to be able to sell direct-to-retail. I think as we go into this next year, we are going to try to do that with some portion of the business we have there. We do feel that we have the capability now to do it, but it will be a transitionary period. But on top of that, I think there’s a real possibility that we may scale back the overall volume that we send to Mainland Europe next year. It’s one of the areas where we certainly suffered weaker returns this year. And then last would be the Asian markets, I think China being the primary driver. And again, that’s a market we’re going to need to evaluate as we get close to the season to determine what the overall returns will be and decisions will be made as to how much fruit we want to put in there based upon our overall market strategy.
