December 10, 2020

By Lynda Kiernan, Global AgInvesting Media

Sustainable food chain investor Paine Schwartz Partners has made multiple moves this week. 

The first, an exit.

An announcement has been made that Paine Schwartz Food Chain Fund IV (Fund IV) has completed the sale of FoodChain ID – a platform for a holistics suite of tech-driven food safety, quality, and sustainability solutions – to Berkshire Partners for an undisclosed sum. 

Looking back to September 2016, FoodChain ID was Paine Schwartz’ flagship investment in the food safety space.  

Founded in 1996 as a pioneer in the GMO food identification space, FoodChain ID’s capabilities have expanded to include the certification of clean label, food safety, and sustainability claims through Non-GMO Project verification, USDA Organic certification, BRC and SQF food safety certification, ProTerra, ProFarm,  and United States Hemp™ Association, among others, along with test and business services that expedite agricultural and food exports, according to the company website. 

As the first tech administrator to work with the Non-GMO Project, FoodChain ID has verified more than 50,000 products, and with ProTerra, has certified more than 3 million tons of agricultural products per year for social and environmental responsibility.

Over the course of Pain Schwartz’ investment, the firm bolstered FoodChain ID’s senior management team with which it partnered to re-prioritize the company’s strategic focus. It has also facilitated six add-on acquisitions and made additional investments in the company to support its long-term growth.

Today, FoodChain ID has tripled in size, controlling a proprietary database that exceeds 100,000 mapped products and ingredients, more than 100,000 regulatory references across 218 countries, and 2.5 million pages of daily global regulatory notifications, scientific opinions, and product recalls in 40 languages.

“It has been an absolute privilege to work with the Paine Schwartz team to elevate FoodChain ID and meet the growing demand for food safety services,” said Brad Riemenapp, CEO, FoodChain ID. 

“Under Paine Schwartz’s ownership, we transformed the business into a global suite of services extending across supply chain compliance, regulatory compliance, risk assessment and predictive analytics. All of this is now underpinned by an amalgamation of customer data that forms a rich ecosystem of supply chain details,” continued Riemenapp. “I am extremely proud of all that we have accomplished and the value we have created for our customers. On behalf of everyone at FoodChain ID, I thank Paine Schwartz for their partnership over the last four years, and look forward to working with the Berkshire Partners team as we take FoodChain ID to its next phase of growth.”

With Berkshire Partners, FoodChain ID will continue to help companies navigate the ever complicated landscape of the regulated global food economy with transparency, accountability, safety, and sustainability in mind.

“We are pleased to complete this sale of FoodChain ID,” said Kevin Schwartz, CEO, Paine Schwartz. “During our ownership of the Company, we worked closely with the management team to grow and transform the business, including through key acquisitions and substantial investments across the platform. We are confident that FoodChain ID will continue to thrive with Berkshire Partners. We wish Brad and the team the best as they move forward.”

The second, is an acquisition launching a new investment platform.

One day after announcing its exit from FoodChain ID, Paine Schwartz Partners announced a strategic investment made via its $1.425 billion Paine Schwartz Food Chain Fund V in Urban Farmer, a leading name in the better-for-you, plant-based specialty dough industry. 

With this investment Paine Schwartz is launching a new investment platform that capitalizes upon opportunities generated by macro New Food Economy trends as consumers are shifting toward eating more at home with a focus on health and wellness.

“We are pleased to establish a new investment platform with Urban Farmer, a pioneer in the fast-growing better-for-you specialty dough category,” said Schwartz. “With its highly on-trend, versatile product offering, state-of-the-art facilities and impressive customer base, Urban Farmer has a strong foundation from which to build on its leading segment share.”

Founded in Manteno, Illinois, in 2013, Urban Farmer is a fully integrated business with a distinct portfolio of plant-based specialty dough products including pizza crusts, topped pizzas, flatbreads, breadsticks, cheese bread, tortillas, empanadas, and sandwich buns. It also has state-of-the-art gluten-free production facilities that meet the highest food safety benchmarks and have the ability to scale to meet growing demand.

Under the continued leadership of CEO John Keigher, Urban Farms will continue to serve its rapidly growing, high-profile customer base of leading better-for-you pizza brands and major North American retailers.

“This is an exciting time for Urban Farmer with this investment from Paine Schwartz,” said Kiegher. “We’ve grown Urban Farmer through our focus on plant-based clean ingredients, innovation, and key investments in our manufacturing capabilities.”

“With consumer demand for healthy and convenient food rapidly increasing, our company is poised to reach new levels of growth,” he noted. “The Paine Schwartz team brings significant food chain and specialty food manufacturing experience along with a focus on, and commitment to, ESG and sustainability, all of which align with our values and the resources to help us achieve our goals. We look forward to working closely with them to continue building out our customer base and expand our leading market share.”

Indeed, this is an overriding concern and focus for Paine Schwartz. Schwartz told GAI News in an interview in November 2019, “We think there is an incredible synergy between these ESG principles and delivering good outcomes, particularly in food and agriculture investing, and sustainability is a core part of that. We will continue to be more proactive in our journey to be best-in-class from a private equity perspective with what we are doing in ESG.”

Commenting on the future partnership between Paine Schwartz and Urban Farms, Schwartz said, “Together with John and the rest of the Urban Farmer team, we look forward to driving further growth and scale by delivering innovative products and capitalizing on opportunities created by macro New Food Economy trends, as consumers increasingly eat at home and focus on health and wellness.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.