French multinational food company Danone is planning to acquire Earthbound Farm, the largest grower of organic produce in the US, as part of a landmark US$12.5bn deal to buy US-based food and beverage manufacturer WhiteWave Foods.
Based in California, Earthbound Farm was founded by Drew and Myra Goodman over 30 years ago, starting out as a raspberry farm on 2.5 acres of land in the Carmel Valley.
Credited with being the first company to produce pre-washed, packaged salad greens on an industrial scale, it now produces salads across a combined area of almost 50,000 acres, as well as growing a range of fresh produce including fruit, vegetables, salads and herbs in various different countries.
According to the Earthbound Farm website, the group produces salad vegetables in the US and Mexico; vegetables primarily in California with some crops in other parts of the US, Canada and Mexico; and sources from fruit the US, Mexico, Argentina, Chile, Peru, New Zealand, Brazil and Ecuador.
WhiteWave purchased Earthbound Farm at the beginning of 2014, reportedly for a figure in the region of US$600m.
Danone’s takeover of WhiteWave is mainly focused on extending the French firm’s commercial reach in the North American market, adding several high-end products to its range including a number of well-known dairy brands as well as emerging lines like nut-based drinks.
Chief executive Emmanuel Faber said the acquisition would “enhance Danone’s growth profile and reinforce our resilience through a broader platform in North America”.
Danone has been directly involved in the fresh produce business before. In 2010, it formed a joint venture partnership with tropical fruit marketer Chiquita Brands International to produce and supply branded fruit smoothies under the trademark Chiquita Just Fruit in a Bottle.
However, it sold its 51 per cent share in the venture to German fruit company Gebrüder Bagusat in 2013, amid reports of poor performance and challenges relating to management.
Chiquita subsequently sold its own interest in the smoothies division, also to Gebrüder Bagusat.