April 6, 2021

By Lynda Kiernan, Global AgInvesting Media

Gladstone Land has acquired 2,285 gross acres of farmland in Tehama County, California, from Boston-based Solum Partners for $37.8 million. 

As part of the transaction, Gladstone has entered into a 15-year, triple-net lease agreement with California Olive Ranch (COR) – the largest miller of olives for extra virgin olive oil (EVOO) in the U.S., and the country’s top producer of the number one California EVOO.

We first heard of California Olive Ranch (COR) in 2014, when another Boston-based ag investor, AgIS – founded by HAIG founder Jeff Conrad – first invested in the company with an eye toward capturing a significant share of the domestic EVOO market. 

By 2015 the company was producing 65 percent of all the olive oil products in the U.S., and by 2017 it announced it had raised $35 million through a funding round that was led by a “major U.S.-based institutional investor” and included existing investors in the company, and which marked the largest round ever raised to-date in the domestic U.S. olive oil category. 

At this point COR had spent years developing innovative planting, harvesting, and handling processes through which the olives it produces are never touched by human hands before being delivered to its  mill, and had grown to manage 14,000 acres of olive groves across Northern California.

It was then in October 2020 that Harvard University’s $41.9 billion endowment spun off its natural resources portfolio and team to launch Solum Partners, an independent management firm focused on investment opportunities in the global agriculture and food industries. 

Anchoring the new Boston-based firm (which is headed by former managing director and head of Natural Resources for HMC, Colin Butterfield) are Harvard Management Co. and insurer American International Group Inc. (AIG), which committed $200 million each.

Coinciding with the launch of Solum Partners, the firm announced that it had acquired, with the backing of HMC affiliates and AIG, select investment assets that had been managed by the team while at HMC, including avocado, olive oil, apple, blueberry, and soybean production assets, as well as stakes in Westfalia, a global avocado distribution company, and California Olive Ranch (COR).

Today, Gladstone Land is expanding its relationship with COR as the investor aims to also expand its farmland ownership in the Sacramento Valley.

“We value our relationship with California Olive Ranch and are pleased with the opportunity to increase the amount of land we lease to them,” said David Gladstone, president, and CEO, Gladstone Land.

Tony Marci, managing director of Gladstone Land, added, “This farm near Corning, California, is a very nice olive orchard, and we are excited to increase our farmland ownership within the Sacramento Valley. It was great to work with Solum throughout this transaction, as we were able to achieve the goals of both parties.”

A Savvy Move

By 2017, the U.S.market accounted for 10 percent of total global olive oil consumption, however domestic production met less than five percent of this demand – reflecting a market prime for disruption by domestic producers.

Driving this potential is the fact that due to a lack of oversights for the olive oil industry, cases of product fraud have been increasingly uncovered. Traditionally, the vast majority of olive oil consumed in the U.S. has been imported from Europe, however, 69 percent of imported olive oils labeled as “extra virgin” did not meet the standards of the International Olive Council and the U.S. Department of Agriculture (USDA), according to the UC Davis Olive Center.

Through this deal, Gladstone Land has gained entry at the ground floor into filling the void in the U.S. for authentic, high-quality EVOO in a sustainable manner.

“We have been evaluating opportunities to buy land in Northern California, and we believe this orchard is a great addition to our portfolio, as we like the diversification that olives provide,” said David Gladstone. “We continue to evaluate additional farms to acquire as we work towards another successful year.”

– 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, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.