Chiquita Brands International will buy bagged-salad leader Fresh Express from Performance Food Group for $855 million in cash.
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| Fresh Express, a savvy marketer, to enhance Chiquita’s branded produce line |
The purchase will make Chiquita the leading supplier of branded produce, adding Fresh Express’ salad sales of $1 billion to Chiquita’s $3 billion fresh-fruit portfolio. That multiplies Chiquita’s leverage with grocers, and gives it the infrastructure to expand distribution. The deal is expected to close by June.
Cincinnati-based Chiquita will re-brand Fresh Express’ fresh-cut fruit business under the Chiquita brand name; it will keep the Fresh Express brand name for value-added salads. Fresh Express will keep its Salinas, CA, headquarters.
“By acquiring an established national infrastructure and state-of- the-art technology, we gain immediate scale and an effective platform to launch new products throughout North America, including the ability to accelerate national distribution of fresh-cut fruit,” said Chiquita CEO Fernando Aguirre in a statement. The deal also gives Chiquita “a unique opportunity to cross-sell our existing products [and leverage] the excellent retail customer relationships of both companies,” he said.
The Fresh Express business will diversify Chiquita’s portfolio beyond its core banana business, and make the company’s financial performance less vulnerable to fluctuations—especially in Europe, which accounts for 72% of Chiquita’s revenues now, and is tightening its banana import rules. Fully 60% of Chiquita’s worldwide revenues come from bananas.
Fresh Express is a savvy marketer: The company initiated the 2001-02 Eat Like a Champion campaign for Safeway Foods that pooled 15 produce marketers and a roster of soccer stars for a month long in-store and in-school campaign to boost produce consumption. Sales jumped 35% to 61% in the campaign’s three flights. The effort, via CoActive Marketing, won PROMO’s top PRO Award for 2002.
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