Vanguard buys Challapampa

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John Hey

BY JOHN HEY

@john_asiafruit

Vanguard buys Challapampa

Vanguard CEO Craig Stauffer talks exclusively to Asiafruit about the groupís acquisition of Peruvian grower Agricola Challapampa

Vanguard buys Challapampa

Co-founder of Challapampa Frank Michell with the company's Red Tiger brand

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US-headquartered global fresh produce grower-marketer Vanguard International Group has agreed to purchase Agricola Challapampa SAC and Agricola Milagritos SAC, the Ica, Peru-based businesses collectively known as Challapampa.

The acquisition of Challapampa, one of Peru’s leading producers of grapes, citrus and pomegranates, is part of Vanguard’s strategy to develop a globally integrated business capable of supplying its customers with “fresh crop” products for 52 weeks of the year from its strategic long-time established suppliers and its farms, said Vanguard's CEO Craig Stauffer.

Founded in 2007 by Frank Michell and Darío Núñez, Challapampa is a 500‐hectare grape, mandarin, and pomegranate production operation comprised of two properties, Challapampa and Milagritos.

Challapampa has grown to become a key supplier to the global market. Its brands include Red Tiger, Red Rabbit, Golden Horse, Sweet Crane and Pampa Fresh.

Located in the Villacuri region of the Ica valley, the company harvests grapes from mid-November to the end of March with a production mix of Red Globe and proprietary seedless varieties. It also grows Tango mandarins and pomegranates.

“We are thrilled to welcome Challapampa to Vanguard and to continue our working relationship with this global industry leader,” said Stauffer. “We are proud to be associated with Challapampa and look forward to increasing our footprint in Peru to enhance our ability to supply our customers around the world.”

Dirk Winkelmann, Vanguard’s chief business development officer, said the selection of its Peruvian partner was key. “Challapampa and Milagritos have a superb reputation both in the Peruvian agricultural industry and international markets, and are an important component of our long-term strategy.”
   
Speaking to Asiafruit from Peru on Thursday, Stauffer said his company had developed a strong relationship with Challapampa over the past six years marketing its fruit into global markets, primarily into Asia.

Vanguard’s decision to acquire the operation, and to buy into Peruvian production, forms part of its global strategy to become more vertically integrated with a focus on supplying its customers with “fresh crop” year-round, he said.

“There are two parts to our strategy – we’re not looking to buy and own all of our production – we remain committed to our long-term strategic grower-packer-shippers with whom we have worked for the past 25 years,” Stauffer told Asiafruit.

“However, we need a more consistent, reliable supply base to be able to ensure we can supply our customers with weekly, consistent quality-assured arrivals, and we want to control our own destiny.”

Global network

For Challapampa, one of the key attractions of joining the Vanguard International Group is the entry into a global farming and marketing network, said Stauffer. Headquartered in Issaquah, Washington State, Vanguard has branch offices in Lima, Peru; Santiago, Chile; Stellenbosch, South Africa; Shanghai, China; Taipei, Taiwan; Kuala Lumpur, Malaysia; Jakarta, Indonesia; Madrid, Spain; and Genoa, Italy.

 “I believe the main benefit of the deal for Challapampa comes from being part of a vertically integrated sales and production operation with an excellent customer base around the world,” he said. “They’re only really in the market [with grapes] for three to four months of the year, currently. That makes it very challenging to compete with global players like Vanguard that have year-round programmes.”

Frank Michell will remain with the business as Vanguard Peru’s and Agricola Challapampa’s general consultant, while Darío Núñez will continue as Vanguard Peru’s and Agricola Challapampa’s vice-president of farming operations. “We are dedicated to ensuring a smooth transition and seamless integration of all entities as we enter this exciting partnership between Challapampa and Vanguard,” said Michell in a media statement.

Núñez said the deal marked “the start of many more strategic combinations between the Peruvian growing community and Vanguard International”.

Stauffer said it would be very much “business as usual” for Challapampa and Vanguard, with the integrated team continuing to work with existing customers. Nevertheless, he identified exciting opportunities for expansion, with Challapampa set to add additional acreage of complementary products to capitalise on export market opportunities.

Product diversification 

While acknowledging that Peru’s table grape business into China and other key export markets has faced challenges with supply of its dominant Red Globe variety approaching saturation point, Stauffer said production of proprietary seedless varieties was increasing, adding that there was great prospects to develop exports into a range of markets including Asia, North America, the Middle East and Europe.

He also identified potential to develop Peru’s offering beyond table grapes. “Challapampa has a very nice production base of Tango mandarins, and we’re growing the Wonderful variety of pomegranates,” Stauffer told Asiafruit. “We’re very pleased to have those products as part of our portfolio. For Tango, North America and Europe would be our main market focus. With pomegranates, some will go to Asia, Russia and the Middle East and we have just been granted access to the US.”

Road to expansion

Vanguard’s acquisition of Challapampa follows the company’s tie-up with New York-based agricultural investment fund Blue Road Capital last August to form the Vanguard International Group. The company has earmarked some US$250m for the strategic acquisition of fresh produce and other complementary businesses around the world.

Asiafruit understands that Vanguard is now looking at more acquisitions in the Americas and other parts of the world. But the foray into Peruvian production with Challapampa marks its first major deal, and one the group is delighted with.

 “Challapampa is an outstanding company. Period,” said Vanguard’s chief financial officer Guy Kisling in a company statement. “They define quality in the Peru grape industry. Frank, Dario, and the entire Challapampa team have built a world‐class operation over the past nine years, it has been our absolute pleasure to work so closely with them as a trusted partner.

“This is a fantastic combination of great synergies in our platform. With Challapampa as the bedrock in Peru, Vanguard is positioned to deliver a unique supply chain solution to our customers globally.”

Kevin Andrew, Vanguard’s chief farming officer, described the addition of Challapampa to the Vanguard team as “a huge accomplishment”.

“Challapampa has built a worldwide reputation for quality and excellence,” he said. “Frank Mitchell has proven to be a visionary by establishing such a strong company in a relatively new industry, and Dario Nunez has established himself as one of the leading managers and table grape growers in the Southern Hemisphere with a well‐deserved reputation for producing the highest quality grapes and building a strong support team. The Ica region possesses the climate and soils to produce outstanding quality year after year. Challapampa will be a perfect addition to complement Vanguard's expansion into North America and South America.”
 

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