February 14, 2017

AMERRA Capital Management announced it has joined forces with Pipeline Opportunity Partners to launch Pipeline Foods – a developer of sustainable supply chains in global agriculture that will have an initial focus on filling the need to meet demand for organic and non-GMO ingredients.

Sales of organic and non-GMO foods in 2014 topped $200 billion, according to the report, “Non-GMO Foods, U.S. and Global Market Perspective, Second Edition” compiled by Packaged Facts, and are expected to climb to a value of $330 billion by 2019, reports Food Business News.

Indeed, a consumer survey conducted by Packaged Facts in 2015 found that 39 percent of respondents stated that they buy groceries with non-GMO labeling, and 35 percent stated that they bought organic products as a way to avoid GMOs.

This demand is playing out on the supply side – The Scoular Company, which supplies organic and non-GMO proteins, sweeteners, and oils to the food industry has seen an 80 percent growth in demand for both non-GMO and organic ingredients.

“Non-GMO is becoming more and more mainstream. It’s still a niche, but it’s coming,” Joe Andrus, director of The Scoular Company’s Food Ingredients division, told Civil Eats.

In response to consumer demand, major players have been increasing their sourcing of organic and non-GMO ingredients, or have been making changes to their product lines, according to Civil Eats, which reports that Chipotle has eliminated GMOs from its menu items and Ben & Jerry’s is transitioning to non-GMO ingredients in its ice cream. Others major food companies making the switch include Gerber, which introduced a non-GMO infant formula in May 2016; Sabra Hummus, which has begun shifting GMOs out of its product line; Campbell’s, which has launched multiple organic and non-GMO soups, while also launching goldfish crackers made with organic wheat; Chobani, which has pledged to work toward ensuring organic and non-GMO feed for the dairy cows supplying the milk for its products; and Post, which has removed GMOs from its Grape Nuts cereal and has secured Non-GMO Project certification.

However, while demand dynamics have been changing, large scale supply chain models have not kept pace. Minneapolis-based Pipeline Foods plans to provide a complete solution to these and other food companies that are expanding their organic and non-GMO business through a procurement strategy that secures a transparent, long-term, socially responsible, and sustainable supply of ingredients.

Beginning with an initial geographic footprint in the Americas, Pipeline Foods plans to rapidly expand its team and asset portfolio to be able to control and certify supply chains from farm gate to fork through a network of strategically located handling and processing assets in both origination and destination markets.

“There has been a steadily growing demand for more professional supply chains by the organic and non-GMO world, especially for grains, oilseeds, and feed ingredients,” said Eric Jackson, chief executive officer of Pipeline. “This requires resources beyond the reach of small and mid-sized players and a different approach than the large incumbents. We are very fortunate to create a partnership with the AMERRA team who has the passion and competence to build this new business model. Their financial strength coupled with our operational experience creates the perfect team to capture this opportunity.”

Founded in 2009, AMERRA Capital Management is a New York-based agribusiness asset manager with more than $1.8 billion in assets under management. Since its launch, the firm has made capital deployments with an aggregate value of more than $3.3 billion across 250 investments. What attracted the firm to Pipeline was the track record of the company’s founders and the idea that the business would serve as a platform for greater investment into a rapidly growing segment of the food industry.

“We had been searching for a way to invest in this space,” said Robert Hodgen, managing director at AMERRA. “We were very excited to find that Eric and his team were focused on building a company with a similar vision. Our investment in Pipeline was driven by the growing consumer demand for specialty products as well as the quality and integrity of the management team.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com