Paramount entry seen as game-changer in Rio Grande Valley - The Packer

Paramount entry seen as game-changer in Rio Grande Valley

11/12/2013 04:37:00 PM
Jim Offner

Courtesy Paramount CitrusAn orchard at one of Paramount Citrus' new holdings in South Texas. The company recently acquired Healds Valley Farms Inc. in Edinburgh and Rio Queen Inc. in Mission.A major California-based citrus grower-shipper moved into Texas last year, just in time for Christmas.

Even competitors saw the arrival of Paramount Citrus as a gift to the Rio Grande Valley’s citrus business.

“We welcome Paramount. We’ve been friends with them prior to them coming to Texas, and they’re going to be good for our industry, just as Rio Queen Citrus was,” said Trent Bishop, vice president of sales for Mission, Texas-based Lone Star Citrus Growers.

In a year’s time, Paramount’s citrus acreage holdings have jumped from zero to about 10,000, excluding production from company-affiliated growers, according to David Krause, president.

Bret Erickson, president of the Texas International Produce Association, Mission, estimates that Paramount now accounts for 60% to 70% of Texas’ commercial citrus acreage.

There still are enough customers to keep all industry participants busy, Bishop said.

Erickson agreed.

“It’s been a shot in the arm for the citrus industry here, and we’re already seeing acres start to climb,” he said.

The arrival of Paramount, which bought Edinburg, Texas-based Healds Valley Farms Inc. in December 2012 and then followed up by purchasing Mission-based Rio Queen Inc. the following spring couldn’t have come as a surprise to anyone in the valley, Bishop said.

“The Rio Grande Valley has been largely consolidating for the last 25 years, anyway,” he said.

Bishop said the number of citrus grower-shippers in the valley has shrunk from around 25 two decades ago to just a few today.

The presence of Paramount likely will provide a marketing boost to everyone in the region’s citrus business, Bishop said.

“I know Paramount is going to do some good marketing for Texas grapefruit, which is good for our industry,” he said.

Rick Burnes heads Paramount’s Texas operations as vice president for domestic operations in Texas.

The company bases its Texas operations at the former Rio Queen facility.

Ray Prewett, president of the Mission-based Texas Citrus Mutual, said Paramount’s presence has been a positive development.

“It’s beneficial to have their presence and expertise in production and marketing in the area, because it raises the profile of Texas grapefruit even more,” Prewett said.

Krause said the company’s most daunting challenge in its first year in Texas has been to meld its acquisitions into one cohesive operation that works with its California business.

“In Year 1, we ended up using the existing computer systems and IT structure from each of those businesses and our California operation also, so we had three different operating platforms in Year 1,” he said.

That’s not the case anymore, he said.

“We spent the off-season this season this summer implementing our system in Texas, and now we’re all on a common platform, and our communication is excellent,” he said.

Most of the remnants of Rio Queen and Healds Valley — including most labels — have disappeared, Krause said.

“Our role is going to be to operate as the industry leader with a significant share by adding these two together under one Paramount platform,” he said.

The existing grower networks were keys to the acquisitions, Krause said.

“Our grower-partners down there are very important to the success of the business and largely why we acquired the two businesses — not just the acreage that the companies are on but also the grower-partners that we picked up. And we hope to continue to expand that also,” he said.

There are more than 40 growers in Paramount’s Texas network, he said.

Once an outsider where the Texas citrus deal was concerned, now Paramount finds itself the industry leader.

“We like the leadership position and in its augmentation to the rest of our product offerings and what it does for us as a business,” Krause said.

Paramount had been looking to move into Texas for several years, Krause said.

“It wasn’t until sort of a right set of circumstances presented itself from the two entities that were, in fact, willing to sell,” he said.

Jeffrey Arnold, salesman for the Edinburg-based Edinburg Citrus Association, said Paramount is a major presence but that presence should have limited effect on his organization’s business.

“Fortunately for us, our customers like to buy from the little guy, and because we are a grower cooperative, we have increased our acreage by 35% this year,” Arnold said.



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