Merger and acquisition (M&A) activity is common in the business world, though it hasn’t been as prevalent in the fresh fruit and vegetable world—until recently.
Yes, the greater food and beverage industry has been rife with M&As over the years, but the blending of businesses from field to fork was never the norm. Restaurant chains and grocery retailers were the key players, building alliances within their categories.
But in today’s highly connected business climate, cross-category alliances are dominating in food and beverage with companies throughout the supply chain joining forces to create efficiencies, provide marketing opportunities, better serve their customers, and, of course, raise profits.
RECENT DEALS AND MANEUVERS
While it’s true M&As in the food and beverage industry as a whole dropped in 2022, this came after significant growth in 2021.
Private equity and venture capital investments in these businesses—from fine dining, casual, and fast food restaurants to regional and national grocery retailers to consumer packaged goods—totaled $54.7 billion in 2021, according to S&P Global Market Intelligence.
This figure was tied to an amazing number of transactions—a whopping 1,075—involving food and beverage companies.
For the first 11 months of 2022, on the other hand, the figure was just $9.7 billion from 705 transactions. About 41 percent of this global total for 2022 was attributable to deals occurring in the United States and Canada.
Reasons cited for the decline are many; they include struggles in the stock market, food price inflation, high debt levels, supply chain disruptions, labor costs, rising interest rates, lower consumer spending, and the war in Ukraine, among other factors.
But, perhaps surprisingly, deals involving a host of fresh produce companies have continued at a rapid pace during 2022 and into 2023.
Players large and small
The scope of M&A activity in fresh produce spans from small, niche growers to major suppliers, from those of similar ilk uniting for strength in the marketplace to those seeking full vertical integration for better control.
Earlier this year, Belding, MI-based apple grower and distributor BelleHarvest Sales, Inc. BB #:104436 acquired Valley View Company, LLC, and Sterling Investment Partners bought Florida Veg Investments, LLC from Shoreline Equity Partners.
Earlier in the year, Great Neck, NY-based William H. Kopke Jr., Inc., BB #:116246 an importer/exporter and distributor of citrus, acquired Vision Global Group, LLC of Wyckoff, NJ, which specializes in lemons, limes, and mangos.
Around the same time, Anaheim, CA-based grower-shipper and distributor Legacy Farms, LLC BB #:167426 acquired specialty produce leader Frieda’s, Inc. (now Frieda’s, LLC) BB #:388120 of Los Angeles.
These 2023 deals followed several notable acquisitions in 2022, including New York City, NY-based Investcorp’s purchase of a majority stake in Sunrise Produce {{BB #:143420}} of Fullerton, CA, and Immokalee, FL-based Lipman Family Farms BB #:110471 purchased a 75-acre greenhouse facility in Jalisco, Mexico, one of several acquisitions it has made in recent years.
Additionally, Chicago-based private equity firm Wind Point Partners, LLC acquired FreshEdge, LLC, an Indianapolis, IN-based holding company of fresh food distributors. In turn, FreshEdge has continued on its own acquisitions spree buying Chicago-based Testa Produce, Inc. and Panama Banana back in May.
This is an excerpt from the cover story in the July/August 2023 issue of Produce Blueprints Magazine. Click here to read the whole issue.
