Go big or go home.
Consolidation on the supply side of fresh produce marketers was a theme for 2018, headlined by the Fresh Del Monte Produce purchase of Salinas, Calif.-based Mann Packing and the 45% stake in Dole Food Co. acquired by Ireland-based Total Produce.
Here are some of the highlights from 2018 in supply side acquisitions and bankruptcies.
Indianapolis Fruit, Piazza Produce expand convenience
By Chris Koger
IF&P FOODS LLC — the merged Indianapolis Fruit and Piazza Produce — has acquired made-to-order packaged convenience foods company Cibus Fresh Inc.
The purchase allows Indianapolis Fruit and Piazza Produce, both of Indianapolis, to expand grab-and-go products to include chef curated sandwiches, wraps, flatbreads, salads, snack packs and parfait cups, according to a news release.
Cibus Fresh, Noblesville, Ind., has an 11,000 square-foot kitchen that’s been inspected by the Food and Drug Administration and the U.S. Department of Agriculture, according to the release.
“By combining Cibus Fresh’s unique approach to fresh convenient foods with our extensive expertise in produce and specialty foods distribution, we’re primed to exceed our customers’ expectations with new offerings, quality and speed of delivery,” Greg Corsaro, president and CEO of IF&P Foods, said in the release.
More than 60 food varieties will be added to the IF&P Foods’ product lines with the acquisition, and more are planned.
Indianapolis Fruit and Piazza Produce merged in 1997 to form IF&P Foods.
Indianapolis Fruit distributes to independent grocers and grocery chains, and Piazza Produce distributes to foodservice operators, according to the release.
Schmieding Produce buys N.C. watermelon grower
By Chris Koger
Schmieding Produce, which ships watermelons grown in most of the major watermelon areas in the U.S., has acquired North Carolina grower Moore’s Produce.
Schmieding, Springdale, Ark., called Moore’s Produce, Turkey, N.C., a “great asset to the continued growth” of the company’s watermelon program, in a news release.
“Moore’s Produce and (former owner) Tony Moore have an impeccable reputation in the industry for delivering quality products and conducting business with a high level of integrity,” Lester Woerner, chairman of Schmieding owner Woerner Food & Ag Group LLC, said in a news release.
“This acquisition continues to help Schmieding execute on our plans to expand our operations across North America,” Woerner said in the release.
Schmieding grows a variety of potatoes for the fresh and processing markets, as well as carrots, pumpkins and other produce for retail, processing and wholesale sectors, according to the release.
Woerner said the company continues to look for expansion opportunities with new acquisitions.
Field tomato giant Lipman buys greenhouse company
By Chris Koger
Lipman Family Farms, which touts itself as North America’s largest grower of field tomatoes, has entered into an agreement to buy greenhouse grower Huron Produce.
Huron, based in Exeter, Ontario, has facilities in Canada, Mexico and the U.S. The acquisition allows Lipman, Immokalee, Fla., to be a year-round marketer of tomatoes, according to a news release.
“The Huron Produce acquisition is truly transformative,” Darren Micelle, chief operating officer of Lipman Family Farms, in the release. “We look forward to the opportunities resulting from the introduction of our proprietary varieties into the protected agriculture space.”
Huron markets tomatoes and other vegetables under the Suntastic label. Lipman’s signature tomato, the Crimson Queen, has color and lycopene attributes that are now standard in all Lipman tomatoes: round, roma, grape and heirlooms.
“The addition of Huron gives us extraordinary product depth, expands our collective capabilities and broadens our distribution footprint, allowing us to better serve our customers with a single, year-round solution for tomatoes and vegetables,” Micelle said in the release. With the purchase, Lipman plans to expand with new facilities in Canada, Nebraska, another Denver location and a warehouse in McAllen, Texas.
The deal is expected to close in April.
Highline Mushrooms expands with deal
By Chris Koger
Highline Mushrooms, Leamington, Ontario, has purchased western Canada grower-shipper Prairie Mushrooms.
In announcing the acquisition March 7, Highline strengthens its coast-to-coast Canada supply and boosts it organic category. Highline now has five mushroom growers in Alberta and British Columbia, which operate as All Seasons’ Mushrooms, according to a news release, but will adopt the Highline name with the Prairie deal.
“Prairie is an excellent fit with our existing mushroom business in western Canada, given its trusted position with key customers and its significant organic growing capacity,” Highline President and CEO Aaron Hamer said in the release.
Duke Tran, president and founding shareholder of Prairie Mushrooms, will lead the company’s western Canada business.
Insight and numbers on Del Monte’s big plans with Mann
By Ashley Nickle
Fresh Del Monte Produce took another big step in diversifying its business with an agreement to acquire Salinas, Calif.-based Mann Packing.
The companies expect the $361 million deal to close in the first quarter of this year, according to a news release Feb. 6. Coral Gables, Fla.-based Del Monte may be known for its bananas, but fresh-cut is one of the areas driving growth for the company, executives have explained in recent earnings calls. Sales in that segment have risen significantly since 2014, including some notable and steady increases throughout 2017. The numbers have largely been driven by increasing volumes, showing Del Monte’s investment in the fresh-cut segment.
“Mann has a lot of interesting new products and capabilities, and Del Monte can take it to another level,” said Mitch Pinheiro, an analyst for Costello Asset Management.
Investing further in the fresh-cut segment makes sense as supermarkets look to take the additional labor and food safety risk out of stores, Pinheiro said.
Vice president of marketing Dennis Christou said Del Monte does not expect any major changes in the Mann Packing organization, and leadership there will continue to be involved in the combined businesses. In addition, Del Monte envisions continuing use of the Mann’s brand.
Total Produce to buy 45% of Dole
By Tom Karst
Adding a huge building block to its North American produce empire, Ireland-based Total Produce has entered into an agreement to buy a 45% equity stake in the Dole Food Co. from chairman and owner David Murdock for $300 million. The transaction, expected to close by mid-2018, has been approved by the board of directors of Total Produce and is subject to anti-trust review in a limited number of jurisdictions, according to a news release. Total Produce also has the option to purchase 100% of Dole two years after the initial deal closes.
The Feb. 1 announcement by Total Produce comes less than a month after Belgium-based Greenyard announced an end to negotiations to buy Dole Food Co. On Jan. 9, Dole filed documents with the Securities and Exchange Commission to back off plans for an initial public offering.
Total Produce said the deal with Dole is a continuation of its successful expansion strategy and brings together two of the world’s leading fresh produce companies, with complementary market positions in various product segments and geographies.
In November, Total Produce purchased a 50% stake in Lafayette, Calif.-based distributor The Fresh Connection.
Earlier in 2017, Total Produce increased its stake in British Columbia-based The Oppenheimer Group to 65%, up from a 35% stake acquired in 2013. Total Produce bought 65% of Los Angeles-based Progressive Produce in February 2016.
The deal with Dole is bigger than all of those, as Total Produce has annual revenues of $4.97 billion and Dole’s are estimated at $4.45 billion.
“We are delighted to have signed an agreement with Dole, long held in the highest regard as one of the world’s best fresh produce companies, with iconic brands dating back to 1851,” Carl McCann, chairman of Total Produce, said in the release. “We are particularly pleased to be partnering with David Murdock, who has been an inspirational and visionary leader since he acquired a majority shareholding in Dole in 1985.”
Total Produce used to be connected to Fyffes, which fits closer to Dole’s profile as a big supplier of bananas, pineapple and melons. Fyffes spun off from Total Produce in 2008.
Analysts believe the structure of the deal, with the option of buying all of Dole after two years, is designed to create a window in time to reduce Dole’s debt levels to an acceptable level before Total Produce brings it on to their balance sheet. As a rule, he said debt levels at about 3.5 times EBITDA are considered acceptable for Total Produce.
Eclipse Berry Farms files for bankruptcy
By Tom Karst
Los Angeles-based Eclipse Berry Farms and it subsidiaries Rosalyn Farms LLC and Harvest Moon Strawberry Farms have filed for Chapter 11 bankruptcy. In a Chapter 11 bankruptcy, the debtor typically creates a plan of reorganization to keep its business alive and pay creditors over time. Ryan Du, accounts payable for Eclipse Berry, said Jan. 18 that the firm will continue to operate but gave no timeline on the company’s future plans.