October 12, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Columbia Fruit Packers (CFP) and Frosty Packing announced the merging of their respective businesses upon an unspecified strategic investment led by the sustainable investment business arm of Goldman Sachs Asset Management (GSAM). 

The newly consolidated company, which will be known as Columbia Fruit Packers LLC and will continue to be a partner in leading tree fruit marketing company CMI Orchards, has expectations of benefits stemming from the scale achieved through the merger, with more than 3,000 acres of apple and cherry orchards, two apple packing facilities, one cherry packing facility, and the combined expertise of the two companies’ teams. 

For years, industry watchers have been noting that the Washington State tree fruit sector was set for a shift toward consolidation due to an oversaturation of both cherries and apples, as well as too many packing houses.

In 2020, Cascadia Capital released its Washington Tree Fruit Industry Market Trends & Analysis 2020 report, noting, “Macro trends such as downward pricing pressure, increased capital intensity, rising industry minimum wage, international trade tensions, tight labor market, and agricultural technology adoption have stressed the balance sheets of sector participants and show no signs of subsiding in the near-term.”

“The enterprises that make it through will emerge larger and more productive as both larger and institutionally-backed players use the downcycle as an opportunity to expand and scale. A key determinant of profitable winners and losers will be a company’s ability to attract institutional capital as well as acquire quality assets…”

As it launches under its new structure, Columbia Fruit Packers stated that it intends to substantially increase production of high-quality, U.S.-grown apples and cherries through both investments in the existing operations and from further acquisitions.

Mike Wade, president and CEO of CFP, Robin Hansen, assistant CEO of CFP, and Paul Martinez, managing partner, all of Frosty Packing, jointly stated, “We are excited by this investment and partnership, and we look forward to growing the business together and continuing to supply the U.S. with high-quality apples and cherries for generations to come.”

The expanded footprint of the company, along with its enhanced well of expertise, are anticipated as being the foundation on which this leading vertically integrated apple growing business commences. As it continues to supply the market with the highest quality fruit, plans include significant investment in sustainability initiatives, including the expansion of regenerative agriculture practices and technologies.

Assisting the company’s growth and execution of key strategic goals will be NewAg Partners – a leading regenerative farming and agribusiness advisory boutique that supported GSAM in this transaction.

Founded in 2019 by Detlef Schoen, NewAg serves as a catalyst for shifting traditional agriculture to regenerative production systems and practices, offering institutional investors, NGOs, and philanthropic institutions  the ability to sustainably deploy capital at scale and to generate risk-adjusted financial returns and a positive impact on the environment.

NewAg’s pursuit of this work enables institutional clients to capture the financial benefits of agriculture as an asset class, while driving regenerative agriculture as part of the global shift toward decarbonization. 

~ 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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