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ACAP invests $2m in frozen meals company

The funding will help expand sales of its healthier frozen poultry meals to large retailers, including Target and Kroger.

US Farm Credit System-backed Advantage Capital Agribusiness Partners has committed $2 million to organic packaged poultry producer Hip Chick Farms. The funding will help the company expand sales of its healthier frozen poultry meals to large retailers, including Target and Kroger.

The company hopes to recast consumers’ image of frozen meals by exclusively using chickens raised without use of preventative antibiotics and fed a non-GMO diet, according to the company website. The company also plans to expand its organic-labeled product selections, which currently account for more than half of its products.

“This is a company that is changing the marketplace and proving that frozen food can be both healthful and tasty,” ACAP principal Tyler Mayoras said in a statement.

ACAP has invested in the health/organic-focused packaged food space as recently as last month, when it committed $3.7 million to organic quinoa-based baby food and toddler snacks company NurtureMe.

Investors have identified the value chain for organic and non-GMO packaged foods as an area of strong growth potential. In July, agribusiness giant Bunge announced plans to offer scaled-up supplies of non-GMO certified corn and oil ingredients to its consumer-base of commercial packaged food companies. That same month, President Obama signed a law requiring labelling of foods containing GMO ingredients via text or QR code. In March, Old El Paso and Cheerios owner General Mills announced plans to double its acreage of organic ingredients sources.

ACAP was the first of four US Department of Agriculture-designated Rural Business Investment Companies, authorised to make equity investments supporting rural economies on behalf of the Farm Credit System between 2014 and 2016.

The fund targets investment opportunities throughout the agriculture value chain, with portfolio companies in the precision irrigation, crop residue and nutrition supplement sectors.

ACAP closed on $154.5 million in October 2014 with commitments from nine US farm lenders and $4.5 million from ACAP parent-company Advantage Capital Partners.