June 7, 2018

Washington State and California-based private equity firm Arable Capital Partners (Arable) announced its acquisition of Farmington Fresh Cuts, a processor of fresh sliced apples, oranges, pears, and other packaged fruit for an undisclosed amount. Alpine Pacific Capital also participated in the deal as a minority investor.

Founded in Stockton, California, in 1995, Farmington has grown to have a dominant presence the Central Valley’s value-added fresh fruit category. Over the years the company has built a long-standing customer base, serving the needs of schools, foodservice, and retail buyers.

Headquartered in Bellevue, Washington, and Bakersfield, California, Arable was launched by a team of highly experienced industry veterans who are aiming to fill the funding gap that exists in the food and agriculture sectors. And in August of last year, the firm announced the first and final closing of its maiden fund at $300 million.

Aware that by its very nature, agriculture requires a long-term investment outlook, Arable is targeting investments in operations headquartered in the Western region of the U.S. – often with family management or operating teams, along the entire agricultural supply chain – that will have a span of 15 or more years.

Apples and Apples

Arable plans to merge Farmington with Fresh Innovations, an existing company in Arable’s portfolio that the firm  acquired in April of this year.

“We are excited to build on our investment in the value-added fruit and vegetable category,” said Derek Yurosek, managing director of Arable Capital Partners. “This merger allows both companies to continue their high level of service for their existing customers and to develop new customers on a regional and national level.”

Founded in 2011, Fresh Innovations has grown to be a leader in fresh sliced apple category. Under the company’s mission “to provide innovative products that are great-tasting, convenient, and healthy,” the company provides  both organic and conventional packaged fresh fruits and vegetable products to warehouse clubs, casual dining establishments, and to the education, entertainment, and health care sectors.”

At the time, Greg Richards, managing director of Arable Capital Partners, spoke of the potential for sliced apples, telling And Now You Know,  “I’m excited about this announcement for a couple reasons. We think sliced apples are part of a very exciting category in healthy fresh snack food. It’s also nice because it has been a very active first part of the year for Arable with this and some other things in the pipeline.”

Fresh Innovations expects that integrating Farmington will result in a strengthening of its  presence in the growing fresh sliced fruit category.

The fresh fruit and vegetable processing market (which includes fresh cut fruit) is expected to grow at a compounded annual growth rate (CAGR) of 7.1 percent from 2017 to reach a value of US$346.05 billion by 2022, according to Research and Markets. This growth is being based on rising demand driven by higher disposable incomes, the convenience factor, and advances in technologies that enable these products to have a longer shelf life. Geographically, North America is projected to dominate.

“The acquisition of Farmington is consistent with our objective to continue expanding our national presence and enhancing the value proposition of our current and future product offerings,” said Toby Cohen, president of Fresh Innovations. “My management team has identified numerous ways to translate the Fresh Innovation’s best practices into the Farmington business. This acquisition is going to give us much needed capacity to help accelerate our growth objectives.”

-Lynda Kiernan