Washington State-based Chelan Fresh and Borton Fruit, two leading U.S. fruit producers, announced that the companies have agreed to merge operations effective September 1.

The deal brings together Chelan Fresh – one one of the largest suppliers of apples, cherries, and pears in the world, with Borton Fruit – also a leading producer of apples, cherries, and pears since 1912. The merger will result in a 47 percent increase in volume for Chelan Fresh’s sales and marketing portfolio, including organic fruit, early-season cherries, new proprietary apple varieties and innovative new plantings.

“Customers want a one-stop-buying experience and shoppers want a wide selection of high quality apples, pears and cherries all year long,” said, Tom Riggan, CEO of Chelan Fresh. “With the increase in volume and varieties, we can support any size program twelve months out of the year.”

A Merging of Majors

Both companies have recently made investments in their operations totaling more than $235 million, funding the addition of state-of-the-art packing facilities and technologies, storage facilities, and upgrades that lift production efficiencies that will enable year-round supply of a variety of fruit.

The combined company will boast 13,000 acres planted in young, high-density orchards with modern trellis systems, and will be considered a leading producer of Honeycrisp apples in the fruit industry.

Washington State is the top producing state of apples, sweet cherries, and pears in the U.S., according to the Washington State Department of Agriculture. In 2015 the state saw revenue of $2.4 billion generated by apple production and $448 million generated from cherry production.

“We are excited to partner with another firm that prides itself on growing high-quality fruit and cutting-edge varieties,” said Bill Borton, president of Borton Fruit. “With farms in different growing regions throughout the Pacific Northwest, the group can supply customers with great fruit from the very front-end of harvest through the end of the year.”

Additionally, the combined marketing operation, which is already working to meet customer needs prior to the official merger date, will continue under the Chelan Fresh name, marketing the majority of the fresh fruit under the global Trout brand label. This deal will result in the largest expansion for the Trout label since its formation in 1923. Chelan also markets fruit under the Cascade Crest Organic and Chelan Fresh labels.

“There is no doubt that this new partnership leverages volume and scale to provide high-quality fruit and excellent year-around customer service, but the most rewarding part to me will be working day in and day out with all of the Chelan Fresh partners,” said Reggie Collins, CEO of Chelan Fruit Cooperative.

“Together, we’re all building one of the most modern, innovative companies in the business on the foundation of family, friends, and a passion for farming.”

Pacific Northwest

This deal between Chelan and Borton Fruit is the second deal announced in fresh fruit sector in the Pacific Northwest in recent months.

In January of this year, Washington State-based Foreman Fruit Company announced it agreed to acquire Oregon-based Earl Brown & Sons, the largest grower and packer of apples in the state of Oregon, for an undisclosed amount.

Foreman Fruit is providing additional capital to fund the leasing of more land and the development of another 60 acres of apples and 10 acres of grapes. Currently Earl Brown & Sons packages between 850,000 and one million boxes of fresh Honeycrisp, Red Delicious, Golden Delicious, Granny Smith, Fuji, and Lady Alice apples per year, reports the East Oregonian, and its Watermill Winery has annual sales of approximately 3,500 cases.

“They’ve created a number of businesses, and a number of very excellent orchards and vineyards,” said Alan Groff, president and CEO of Foreman Fruit Company. “There’s a nice intersection of our capabilities.”

Although still in the early stages of integrating the wine business, Foreman Fruit believes that the venture holds significant, nascent potential for growth.

“I think this is really great wine that is, perhaps, undersold,” Groff told the East Oregonian.

Part of the shift across orchards in the U.S. Northwest is also seemingly connected to the rising popularity of cider and stronger demand for certain apple varieties from craft brewers.

“We’re on the cusp of something that’s really going to take off,” Brad Sleeper, an orchardist in the Coast Range foothills above Oregon’s Haag Lake who produces 40 varieties of cider apples, told Capital Press. “These new cideries are all going to need apples.”

 

-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.