Goldman Sachs Invests in Ag Production/Processing

Columbia Fruit Packers of Wenatchee and Frosty Packing of Yakima will merge to form New Columbia Fruit Packers after an investment from Goldman Sachs Asset Management.

Goldman Sachs Asset Management will own a majority stake in the new company, according to a news release.

New Columbia Fruit Packers will operate two apple-packing facilities and a cherry-packing facility and own more than 3,000 acres of apple and cherry orchards. That’s roughly 1.4% of cherry and apple orchard acreage in the state, according to data from the USDA’s 2017 Washington Tree Fruit Acreage Report.

The new company will seek to substantially increase production of high-quality U.S.-grown apples and cherries through both investments in the existing operations and from further acquisitions. And, it will continue to be a partner in CMI Orchards, a tree fruit marketing company. The company will be vertically integrated, meaning it will manage or own multiple steps in apple production and distribution.

The company also has plans for increased investment in sustainability initiatives, including regenerative agriculture.

Editor’s Take:

Why is Goldman Sachs investing money in agriculture and food enterprises? Pretty simple, agriculture is generating some phenomenal returns and has become a mainstream investment target. It is obvious Goldman is expecting a rather handsome return on investment moving forward. Population growth, geo-political uncertainties and more consumers eating at home might also play a role in their decision. A potential concern is – concentration of food production in the hands of a few large companies that have huge pricing power. Something to think about. That said, companies like New Columbia Fruit Packers purchase a lot of trucks, which would also qualify for AgPack® on each qualifying truck lease or purchase. Don’t overlook these types of opportunities when considering who to approach as a potential ag customer.