December 21, 2017

Canada’s largest single-profession pension fund – the C$180.5 billion Ontario Teachers Pension Plan (Ontario Teachers) – announced its acquisition of Jasper Farms – the second largest avocado producer in Australia. Financial terms of the deal were not released, however it is reported to be valued at approximately $180 million.

“The acquisition of Jasper Farms underscores Ontario Teachers’ mandate to seek long-term investments in well-managed, producing agriculture properties to meet the growing global demand for food,” said Andrew Claerhout, senior managing director, infrastructure and natural resources for Ontario Teachers.

Based in Busselton, and owned by Neil Delroy, Jasper Farms includes 82,000 trees planted across 220 hectares, and additional trees that are nearly mature on another tract of land of about the same size, according to The West Australian. Harvest concludes in December, and it was expected that the business would produce up to 6,000 tons of Haas avocados worth $40 million.

Eyes on Avocados

Australian avocado operations have gained recent attention by both industry insiders and investors looking to capitalize upon their growing popularity among health-conscious consumers.

Avocado production in Australia has seen steady increases year-on-year, with production in 2015/16 totaling just under 67,000 tons –  16 percent higher than 2014/15 which saw production of just under 58,000 tons, and reaching a value of $460 million, 30 percent higher than the year before, according to Avocados Australia. Exports have likewise seen impressive growth – increasing from approximately 1,750 tons in 2013/14 to approximately 2,750 tons in 2015/16, while consumption in Australia has seen 10 percent growth per year; and rounding out industry projections, by 2025, Avocados Australia expects the country to see its avocado output increase to 100,000 tons.

The Costa Group, Australia’s largest produce company, has identified avocados as a key growth crop and as one of the five pillars of its company, complementing berries, mushrooms, citrus, and glasshouse tomatoes.

Last year the group announced it had entered into an exclusive non-binding partnership with Macquarie Agricultural Fund Management to “jointly investigate compelling M&A projects in farmland, biological assets, water and infrastructure assets.”  That same week, the partnership announced its first acquisition – the Avocado Ridge orchards and packing operations in Queensland from the Carney family for an undisclosed amount.

Adding to Costa’s existing 370 hectares of avocados in Queensland and South Australia, this acquisition will bring the group’s total avocado acreage to 500 hectares, while the group has plans to plant an additional 60 hectares over the next 12 months, according to Fresh Fruit Portal.

Ontario Teachers’ also has identified avocados as a key crop when looking to tap into shifting consumer trends.  “Avocados are difficult to substitute and their unique flavor and nutrient profile have helped them benefit from the growing demand for health foods in Australia and internationally,” noted Claerhout.

Ag and Aquaculture

Ontario Teachers’ continues to build out its position through investments in ag and aquaculture.

Bjarne Graven-Larsen, CIO with the pension fund, expressed the funds targeting of longer-term permanent crop production, saying earlier this year, “We like almonds, avocados, something of the not-so-fast crop so far.”

In 2015 the fund together with California-based Renewable Resources Group purchased almond assets owned by Macquarie Farm Assets and Resources Management in Robinvale, in the Sunraysia district of Victoria, Australia for $115 million.

And just one month ago, Canada Teachers’ announced its first investment in the aquaculture sector with the acquisition of Atlantic Aqua Farms from San Francisco-based Encore Consumer Capital in a deal reported to be valued in excess of C$100 million.

-Lynda Kiernan