September 12, 2016

Two of Australia’s leading produce companies, Perfection Fresh Australia and FruitMaster, have announced their agreement to merge their table grape businesses.

The resulting company, which will trade as FruitMaster Australia, will be the largest table grape grower and marketer in the country. It will have a Board comprised of representatives from both companies as well as a substantial portfolio of grape varieties and proprietary genetics, three farms in Kenley, Robinvale, and Paringi in New South Wales, a strategic network of third-party growers, and a packing and distribution center located in Robinvale.

“Our strategically aligned third party growers will continue to play an integral role in the future of the business and will enjoy the same level of service and unparalleled access to new genetic grape varieties,” said FruitMaster Australia Director, Michael Simonetta.

The deal will also benefit both companies in a significant increase in scale, transforming FruitMaster Australia into an industry leader both domestically and abroad.

“We expect to market two and a half million boxes of grapes this year, split between our third party growers and our own production,” said Simonetta. “The increase in production volumes opens the business to a broader range of customers domestically and internationally, and will enable us to provide greater opportunities to our global customers.”

Integration of the two companies will bring the breeding program and proprietary genetics of Perfection Fresh Australia together with the expanded network of farms and third party growers created by the deal which will boost marketing initiatives for the new entity.

“There are already several new exclusive grape varieties that have recently cleared quarantine and with the merged network of farms and third-party growers, we will be able to accelerate the introduction of these varieties and previously released varieties to retailers,” said Joe Lanteri, CEO of FruitMaster Australia.

“These capabilities will enable us to better respond to consumer trends and bring the very best in new grape varieties to market,” added Lanteri.

Incorporating Innovation to Increase Exports

The venture is also investing in innovations that will support the launch of new products and that will be key in the expansion of the business, including a new production line at the Robinvale facility for the production of snack cups and individual grapes, and a second line that specifically meets production protocols for certain export markets.

“We are exploring opportunities through all of Asia, Middle East, and other markets,” said Mr. Simonetta. “The current grape protocol for China is workable but we need continued government support in establishing new export markets and to truly capitalise [sic] on the free trade agreements.”

Consolidation and Competition

FruitMaster Australia is not the only large-scale merger to happen this season in Australia’s produce sector.

In June, two of Australia’s largest fruit and vegetable suppliers, Premier Fruits Group and LaManna Group, the country’s largest banana producer, announced that they were merging their operations into an entity that will have annual sales of $500 million. The merger of equals will result in the second biggest vegetable supplier in the country, trailing only Costa Group Holdings when ranking by annual revenue.

“We are doubling our size by coming together,” Premier’s Anthony Di Pietro told The Australian.“…this sets us up for future growth, investment and innovation and allows us to offer a bigger complementary range of fruit and vegetables to our major customers all year round.”

While both companies can be expected to keep and continue to develop their existing brands, there are also plans for expansion both domestically and internationally. The group, which already exports to 13 countries, is looking to boost its export volumes and is considering a future entry into the U.S.

“The industry as a whole has an enormous future and we need to leverage Australia’s position and pool its resources to take advantage of that,” Di Pietro told The Advertiser.

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Lynda Kiernan