Local organic growing and shipping giant Earthbound Farm
purchased rival vegetable grower Pride of San Juan for an
undisclosed amount last week in a deal that could dramatically
increase the company’s market share and profits.
Earthbound is expecting the acquisition to boost sales revenue
to $450 million, up $50 million from pre-sale forecasts of $400
million.
San Juan Bautista – Local organic growing and shipping giant Earthbound Farm purchased rival vegetable grower Pride of San Juan for an undisclosed amount last week in a deal that could dramatically increase the company’s market share and profits.
Earthbound is expecting the acquisition to boost sales revenue to $450 million, up $50 million from pre-sale forecasts of $400 million.
Earthbound Farm, the country’s largest grower and shipper of organic produce, agreed to purchase the manufacturing and marketing operations of Pride of San Juan with an aim at expanding the company’s reach into the foodservice industry, and to diversify its share of the organic market.
Earthbound is already well-entrenched in the organic produce market. Seven out of every 10 organic salads sold in grocery stores are from Earthbound and the company’s products are sold in 74 percent supermarkets nationwide.
Although Earthbound plans to keep the majority of Pride of San Juan’s 500 employees, the deal could have some migrant laborers searching for new jobs, according to Myra Goodman, Earthbound founder and executive vice president.
“The timing of the deal was unfortunate in that way,” she said. “We had already hired workers for next season and didn’t know that we would be able to tap into (Pride of San Juan’s) work force. This deal moved very quickly, it took only two weeks, and there will be some seasonal workers that will lose jobs.”
Goodman said the cuts would likely come from unskilled production positions and would be “very few.” However, Earthbound will have new job openings for several skilled positions such as forklift operators, Goodman said. Earthbound also plans to keep most of Pride of San Juan’s sales staff.
“There might be temporary losses,” she said. “But the market should recover over time.”
Earthbound will take over Pride of San Juan’s 165,000 square-foot processing plant and 11 loading docks in April, when the company and its 1,000 employees return to San Juan Bautista from winter operations in Yuma, Ariz.
County officials don’t expect the deal to drastically change the local agriculture industry. San Benito County Farm Bureau President Paul Hain said the deal could actually benefit seasonal workers.
“They could actually have greater job security from this, especially if Earthbound becomes more efficient,” he said. “The work will be stable.”
Hain said the deal would also reinforce the county’s image as a large producer of organic products.
Supervisor Anthony Botelho agreed with Hain that the deal wouldn’t change much for the local agriculture industry.
“I don’t think there are any jobs to cut, the industry is very labor intensive,” he said. “This deal is part of a continuing trend, bigger companies keep getting bigger.”
Goodman, who started Earthbound in 1984 with her husband Drew on 2.5 acres of land in Carmel Valley, sees the acquisition as big step forward for the company. Earthbound has expanded steadily for the last eight years, growing from a 25,000 square-foot facility in 1998 to a 203,500 square-foot facility in 2005. The company markets more than 100 products, including organic salads, fruits and vegetables.
“We’re now going to have a much more efficient single producer – this will lower costs and help us be an engine for growth,” Goodman said. “It’s an alliance with many synergys.”
The two companies, located a mile apart, share a vision for producing high-quality products while keeping a mindful eye on the environment, Goodman said. Pride of San Juan employs sustainable farming practices and produce’s some certified organic products, said company founder Stephen Wyrick. Wyrick will maintain Pride of San Juan’s farming operations and continue to supply Earthbound with produce for Pride of San Juan products.
“Earthbound Farm and Pride of San Juan have been neighbors and respectful competitors for quite some time,” Wyrick said in a statement. “I’ve admired Earthbound Farm’s tremendous success in manufacturing and marketing and I can’t imagine a better company to turn those functions over to.”
Organic produce has become commodity and competition in the marketplace is stiff, but Goodman said she expects Earthbound to continue to grow.
“The sky is the limit. Our growth has been fast and furious and the market is huge,” she said. “The organic image is changing from premium to mainstream as people become more health conscious.”
Goodman said Pride of San Juan would be primarily responsible for developing new products and Earthbound would focus on manufacturing and marketing.
Earthbound, she said, plans to stay in San Benito County for many years to come.
“We’re investing more in more in San Benito County,” Goodman said. “This is our home.”
Brett Rowland covers agriculture and public safety for the Free Lance. He can be reached at 831-637-5566 ext. 330 or
br******@fr***********.com
