Paramount Citrus in Delano, CA, and Grimmway Farms in Bakersfield, CA, announced July 22 that they have entered into an agreement for Paramount Citrus to acquire the citrus assets of the Central Valley-based Grimmway Farms.
"As a part of the acquisition, Grimmway Farms' citrus packing equipment and outside grower program will transition to Paramount Citrus," according to a press release issued by Paramount. "This will add nearly 7,000 acres of Navel and Valencia oranges and lemons grown in each of the major citrus-producing regions in California, including the San Joaquin Valley, Ventura County, and the California Desert."
The additional volume will Increase Paramount Citrus's Navel acreage by 45 percent and its California lemon fresh carton volume by 43 percent.
"Grimmway Farms has developed a strong citrus grower program of farmers who, like our two companies, are committed to the highest quality growing practices," David Krause, president of Paramount Citrus, said in the release. "This additional volume and share of market in crops we already represent will allow us to service our current and new customers in an even better way."
"This acquisition provides for us a great opportunity to transition out of the citrus business while ensuring a solid future for the farmers in our outside grower program and allows us to focus even more of our efforts into our core business, the consistently growing carrot and organic vegetable market," Jeff Huckaby, executive vice president of Grimmway Farms, added in the release.
Paramount announced in June a major expansion in its Mandarin program, which it is now marketing in-house under the "Wonderful Halos" brand.
Krause told The Produce News July 22 that having a "very substantial" share of the Mandarin market, we were looking for an increase in our other crops in order to have a bigger share of the total market to service a similar customer base. The real key in the strategy is to increase our market share of these core crops so that we can better cover distribution for our core customers that we have in the 'Halos' program."
The company's market share in other citrus products will not be the same as in Mandarins.
"We are still going to be a relatively small share of the total market," he said. "But we want to be the one-stop citrus provider for our customers. We want them to be able to back up their truck to our facility and get everything that they need in the citrus category."
Paramount's orange and lemon programs will not have the same consumer focus that the "Wonderful Halos" program does, "but we will support it through our existing Paramount sales and marketing staff and with traditional minor-level merchandising, POS and trade incentive programs."
Paramount citrus was "already the largest vertically integrated grower, packer and shipper of fresh citrus - including Mandarins, Navel oranges, Valencia oranges, lemons, limes and Texas red grapefruit. With the Grimmway Farms acquisition, Paramount's lemon program will now represent roughly 20 percent of total California lemon sales in the United States, strengthening its position as a premiere independent lemon shipper," according to the press release.
Following the acquisition, which was expected to be completed by the end of July, members from the Grimmway Farms grower representative team will join the Paramount Citrus family in order to ensure a smooth transition for growers as they move from Grimmway Farms over to Paramount Citrus.
Jeff Green, general counsel for Grimmway Farms, told The Produce News that the carrot business has been growing, and the company "simply needed the space" for its carrot operation that had been housing the citrus program.
All hourly production workers employed in Grimmway's citrus division will be offered employment with Grimmway in its remaining operating divisions. The members of Grimmway's citrus sales team have either retired, "gone their own way," or moved into other Grimmway divisions, he said.