Fresh Express acquires eastern operation
Fresh Express acquires eastern operation
Fresh Express announced Oct. 16 that it had acquired privately held Verdelli Farms, one of the top regional processors of value-added salads, vegetables and fruit snacks on the East Coast.
The company, which markets its products under the "Harvest Select" and "Verdelli Farms" brands, operates in 10 states from Massachusetts to Virginia. Verdelli Farms will be integrated into Fresh Express, which is a wholly owned subsidiary of Chiquita, but it will continue with its same management team, and no personnel changes are anticipated at this time, according to Dan Verdelli, executive vice president of Verdelli Farms, which is based in Harrisburg, PA.
He and the other principals at Verdelli Farms began talking to Fresh Express more than a year ago about entering into some type of collaborative agreement. "Then the spinach scare happened and talks stopped," he said. "But recently we started talking again about being a co-packer."
Mr. Verdelli said that as the talks continued, the idea of an acquisition was floated and the concept was explored. He admitted that the food safety issue played a role. "We have talked about it [as a company] off and on about what we would do if we had some type of major recall. Let's face it, we are a relatively small company and we don't have the resources of a Dole or a Chiquita to deal with a large scale recall."
He said that Fresh Express' food safety record and program also were important factors. "Fresh Express has the top food safety program in the country," said Mr. Verdelli." We have a very good program in place and have always done very well on our independent audits, but we think their program is a step above ours."
Mr. Verdelli said that while the management team at Verdelli Farms will stay in place, the firm will immediately begin integrating the Fresh Express system into its program. In a relatively short time, Verdelli Farms will begin producing the "Fresh Express" label as well as its own at its production facility.
Fernando Aguirre, chairman and chief executive officer of Chiquita Brands International, said in a press release, "The acquisition of Verdelli Farms, with its focus on meeting the needs of consumers for fresh, healthy and convenient foods, superior food safety and strong customer relationships, is a great fit within our sustainable growth strategy and an excellent complement to our 'Fresh Express' brand. The acquisition accelerates our expansion into the Northeast, where there is strong demand from the largest U.S. concentration of value-added salads consumers, but where the 'Fresh Express' brand has been under- represented."
Mr. Aguirre added, "We are also pleased that Dan, Mike and Jen Verdelli, as well as other members of Verdelli Farms' strong management team, will remain with the company following the acquisition and offer leadership talent that is a good cultural fit with our focus on innovative value-added products, food safety, freshness, customer service and category development."
Dan Verdelli said that Chiquita's reputation of allowing its acquisitions to run their own businesses without a great deal of interference was a key factor in the decision process. "We've had opportunities to sell before, and it was important to us that we keep our own identity in the Northeast," he said. "We've talked at length to the Fresh Express people and we liked what we heard. We have the same goals, and this is a great opportunity for continued growth."
"Fresh Express" is the number one brand of value-added salads, with a total U.S. market share of approximately 47 percent, according to the Chiquita press release. The press release also noted that Fresh Express has only about a 30 percent market share in the Northeast and that the acquisition will allow it to greatly increase that number.
Verdelli Farms also has modern manufacturing capabilities and efficient distribution capacity. Fresh Express also expects "to gain networkwide cost synergies in distribution and logistics costs while achieving up to a two-day improvement in the freshness of salads it delivers to customers and consumers in the Northeast," according to the press release.
Verdelli Farms is a third-generation, family-owned business founded in 1924. The company employs approximately 400 people and has annual revenues of more than $80 million, according to Dan Verdelli. In 2006, the company produced more than 8 million cartons of fresh salads, vegetables and fruit snacks. Fresh Express was purchased by Chiquita Brands International Inc. in June 2005 for $855 million.
The financial terms of the Verdelli Farms deal were not announced, and Mr. Verdelli preferred to keep the personal aspects of the sale confidential.
The company, which markets its products under the "Harvest Select" and "Verdelli Farms" brands, operates in 10 states from Massachusetts to Virginia. Verdelli Farms will be integrated into Fresh Express, which is a wholly owned subsidiary of Chiquita, but it will continue with its same management team, and no personnel changes are anticipated at this time, according to Dan Verdelli, executive vice president of Verdelli Farms, which is based in Harrisburg, PA.
He and the other principals at Verdelli Farms began talking to Fresh Express more than a year ago about entering into some type of collaborative agreement. "Then the spinach scare happened and talks stopped," he said. "But recently we started talking again about being a co-packer."
Mr. Verdelli said that as the talks continued, the idea of an acquisition was floated and the concept was explored. He admitted that the food safety issue played a role. "We have talked about it [as a company] off and on about what we would do if we had some type of major recall. Let's face it, we are a relatively small company and we don't have the resources of a Dole or a Chiquita to deal with a large scale recall."
He said that Fresh Express' food safety record and program also were important factors. "Fresh Express has the top food safety program in the country," said Mr. Verdelli." We have a very good program in place and have always done very well on our independent audits, but we think their program is a step above ours."
Mr. Verdelli said that while the management team at Verdelli Farms will stay in place, the firm will immediately begin integrating the Fresh Express system into its program. In a relatively short time, Verdelli Farms will begin producing the "Fresh Express" label as well as its own at its production facility.
Fernando Aguirre, chairman and chief executive officer of Chiquita Brands International, said in a press release, "The acquisition of Verdelli Farms, with its focus on meeting the needs of consumers for fresh, healthy and convenient foods, superior food safety and strong customer relationships, is a great fit within our sustainable growth strategy and an excellent complement to our 'Fresh Express' brand. The acquisition accelerates our expansion into the Northeast, where there is strong demand from the largest U.S. concentration of value-added salads consumers, but where the 'Fresh Express' brand has been under- represented."
Mr. Aguirre added, "We are also pleased that Dan, Mike and Jen Verdelli, as well as other members of Verdelli Farms' strong management team, will remain with the company following the acquisition and offer leadership talent that is a good cultural fit with our focus on innovative value-added products, food safety, freshness, customer service and category development."
Dan Verdelli said that Chiquita's reputation of allowing its acquisitions to run their own businesses without a great deal of interference was a key factor in the decision process. "We've had opportunities to sell before, and it was important to us that we keep our own identity in the Northeast," he said. "We've talked at length to the Fresh Express people and we liked what we heard. We have the same goals, and this is a great opportunity for continued growth."
"Fresh Express" is the number one brand of value-added salads, with a total U.S. market share of approximately 47 percent, according to the Chiquita press release. The press release also noted that Fresh Express has only about a 30 percent market share in the Northeast and that the acquisition will allow it to greatly increase that number.
Verdelli Farms also has modern manufacturing capabilities and efficient distribution capacity. Fresh Express also expects "to gain networkwide cost synergies in distribution and logistics costs while achieving up to a two-day improvement in the freshness of salads it delivers to customers and consumers in the Northeast," according to the press release.
Verdelli Farms is a third-generation, family-owned business founded in 1924. The company employs approximately 400 people and has annual revenues of more than $80 million, according to Dan Verdelli. In 2006, the company produced more than 8 million cartons of fresh salads, vegetables and fruit snacks. Fresh Express was purchased by Chiquita Brands International Inc. in June 2005 for $855 million.
The financial terms of the Verdelli Farms deal were not announced, and Mr. Verdelli preferred to keep the personal aspects of the sale confidential.
