The Wonderful Company’s entry into a long-term lease on an 846-acre California farmland property could benefit third-party growers including investors, a market source told Agri Investor.
The lease was entered into by Wonderful’s citrus unit, which intends to use the property to plant the company’s patented seedless lemons. The source added that although the company in recent months has lowered the number of suppliers into its mandarin orange program by imposing more stringent quality standards, it has also been encouraging third-party growers to plant lemons.
“Much like the mandarins, lemons are a new area that could invite participation by third parties,” the source explained. “For those that are investing in lemons in California – through either funds or other capital sources – that could be something new that they end up working with Wonderful on.”
Wonderful is a privately held company that grows, harvests, packs and markets a range of crops including mandarin oranges, pistachios and pomegranates. According to a 5 February statement, the company’s Wonderful Citrus unit owns the exclusive North American rights to sell its seedless lemons, which are non-GMO Project verified and require no pollination to propagate.
The source added that although the company typically follows a vertical-integration strategy involving buying and leasing land, as well as farming it itself and bringing produce to market under brands developed in-house, its approach varies crop by crop.
Foodservice is likely to be the primary customer base on which Wonderful builds out its production, said the source, who added that seedless varieties reduce labor and costs for customers who are interested in adding acidity or flavor in food preparation.
The property Wonderful leased to produce the lemons has been held by the Bianchi family since it was acquired through the California Land Grants program during the 1800s. It is located in the Salinas Valley on California’s Central Coast and has previously been used for raising cattle, dry-farming hay and producing wine grapes for the Robert Mondavi brand.
California farmland brokerage, consulting and advisory firm the Mendrin Group represented the Bianchi family in a confidential bidding process for the property.
Wonderful Citrus president Zak Laffite said in the statement that the company was excited to secure access to the Bianchi family’s property. He described it as a “rare find” in being a large, contiguous tract along the coast.
Both the Wonderful Company and the Mendrin Group declined to provide additional information on the price or duration of the lease, or on the make-up of the interested parties within the bidding process.