October 5, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Global alternative investment manager Investcorp has acquired a majority stake in Sunrise Produce, a leading wholesale produce distributor based in Southern California, for an undisclosed amount. 

For Investcorp, this deal provides strong exposure to a high-potential segment of the food supply chain. The U.S. fruit and vegetable market, which was valued at $62.52 billion in 2021, is expected to grow at a CAGR of 5 percent between 2022 – 2030, according to Grand View Research. 

Fresh fruits and vegetables accounted for 78.6 percent of the entire U.S. fruit and vegetable market in 2021 – a standing that is expected to be maintained throughout the forecasted period due to an increasing consumer health consciousness, and greater awareness of the role that fresh and natural produce can play in better personal health outcomes.

As for distribution revenue share within the segment, 73 percent of consumers responded that they prefer to buy their fruits and vegetables from conventional supermarkets, which commanded a 65 percent share of the U.S. market in 2021. 

Supplying these retail outlets is Sunrise Produce.

“Fresh produce distribution is a highly fragmented, $70 billion national market that has consistently shown resiliency through economic cycles,” said Amit Gaind, managing director, Investcorp.

Founded in 1991 in Fullerton, California, by Paul Carone, Sunrise provides customers across the retail, specialty, white tablecloth restaurant, resort, and education sectors with fresh and perishable produce through a comprehensive regional network across the western U.S. that serves a diversified base of more than 2,000 accounts.

In 1998, David Sapia, an industry veteran with 35 years experience in the food distribution industry, joined Paul Carone to continue to grow the company, assuming the role of president and CEO. Over the ensuing years, Sapia oversaw significant expansion and revenue growth across sectors in connection with both new and existing customers.

“We are extremely excited about this pivotal moment for our thriving company,” said Sapia, who remains a significant shareholder in the company.

“Investcorp’s business acumen and resources make them an ideal partner to help fuel our next phase of growth and help us continue to serve our expanding roster of diverse customers with the quality and personal service that they’ve grown accustomed to from Sunrise.”

At this time, Sunrise also announced that company founder Paul Carone will be retiring.

“I am truly grateful for the incredible partnership that Paul and I have built over decades of working together to grow Sunrise Produce,” said Sapia. “Our team is certain that this new relationship with Investcorp will allow us to continue to build on Sunrise’s exceptional foundation.”

Gaind concluded, “David and the Sunrise team have built a special, passionate culture that consistently thrills its customers with outstanding service. Their model and disciplined approach has propelled them to exceptional, industry-leading growth.”

“We look forward to our partnership and to helping the Company accelerate its growth through geographic expansion and acquisitions.”

~ Lynda Kiernan-Stone is editor in chief 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 Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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