Years ago, when I tried to critique his farming, my dad told me ‘you know, you need to realize; I can only afford to farm half as well as I know how to,’” Tom Avinelis, Co-Managing Director of Agriculture Capital, tells me. “So often in the farm operations business, you’re so capital constrained. And I think it’s been key for us to address that challenge. With AC Foods, we’ve been able to accelerate the innovation process because we’ve had the capital to do it.”
It’s 11:30 a.m. on a not altogether untypical July morning in Delano, California. Temperatures are already reaching triple-digits and will soon creep up to 105° Fahrenheit. The Columbine Vineyards’ sales office, though, is cool and accommodating.
I’m sitting in a conference room, meeting with Tom, his fellow Co-Managing Director Rob Hurlbut, AC Operations’ CEO Darren Filkins, and Agriculture Capital Chief Marketing Officer Amanda Steele to learn more about Agricultural Capital and the AC Foods family of farms and operations, the organization’s history, and the unique way in which the company is leveraging the support of private equity to pursue a transformative approach to sustainability and regenerative agriculture. It’s a story of dedication—the kind of dedication that gets you out in the vineyard in 100-degree weather.
We’re about to head out to the sweltering fields and survey a small parcel of the nearly 18,000 acres of farmland that AC Foods operates across Oregon, California, and Australia.
“Agriculture Capital initially developed as an investment firm,” Rob explains. “Tom had been pursuing an opportunity to raise a fund, and I had recently sold a food company—having been in the business for 35 years. We met, and I think we really shared this view around the importance of developing regenerative supply chains.”
The two soon-to-be principles of Agricultural Capital both brought a wealth of knowledge to the burgeoning venture—Rob as the former CEO of Niman Ranch and Founder of Attune Foods and Tom as the Co-Founder of Homegrown Organic Farms and AgriCare. The seed was there, but it soon became apparent to both Tom and Rob that it wasn’t enough to merely invest—to be “owners.” To pursue the kind of regenerative framework and commitment to the triple bottom line of public, environmental, and financial well-being that the two envisioned, Agriculture Capital had to do more. Rob and Tom decided that they had to be farmers above all else.
“We’re farmers first and foremost.”
—Tom Avinelis, Co-Managing Director, AC Foods
“The opportunity to leverage institutional capital was really clear, and that led us to raise an investment fund—not the normal way to think about a food business opportunity but certainly one we were excited to pursue. And we then realized that the real work was actually getting this done on the ground,” Rob continues. “And we realized we had to build an organization that could execute on the philosophy. We were lucky enough to meet Darren shortly thereafter. We asked him to join us to lead the AC Operations team, as we really acknowledged that we needed to be not just an owner of assets but also an operator of assets—from nursery to farm to packing and cold storage to sales and marketing. And so, the idea of AC Foods was really to encompass this breadth, because all of these assets are part of AC Foods; the people that work here are AC Foods; the brands themselves—consumer brands like Sumo Citrus® and Columbine Vineyards®—those brands are part of the AC Foods portfolio.”
Tom is quick to concur with this assessment.
“We’re farmers first and foremost,” summarizes Tom. “We think our greatest success will come from the ground up. We really consider ourselves stewards of the land, and our approach to agriculture is a regenerative one. Our focus has been on permanent crops and how we can build out the platforms for success long term—not just for ourselves but for future generations.”
And the company recently hired its first Chief Marketing Officer—a 25-year veteran of the food and beverage industry with a focus on CPG marketing. Amanda tells me she shares in the company’s commitment to implementing sustainable practices and producing sustainable products, having worked in the health and wellness natural and organic space for the past 12 years.
“Fresh produce is one of the best, cleanest options that fits the way people want to eat today; in terms of healthy, convenient food, you don’t get better than fruit and nuts,” Amanda tells me. In her role, Amanda is eager to share the company’s stories with customers and end consumers and to highlight an impressive family of brands and products that includes Sumo Citrus® and Suki™ mandarins; Suntreat®, Sweetline®, and Sunline® navels; I’m Pink™ cara caras, and Columbine Vineyards’ Holiday®, Milano®, and Black Globe® table grapes.
“With all the changes going on in the retail environment, produce is one of the most exciting parts of the store and is critical for retailers to bring shoppers through the front door,” Amanda explains. “I think we have a huge opportunity to partner with our retail customers and help them to tell the story of these brands and their high-quality produce offerings—particularly our proprietary varieties—to their shoppers in order to generate more traffic and build excitement in-store. We plan to invest in our brands and build brands like Sumo Citrus, for example; it’s a very unique product; people love it, and we think we can build that into a compelling brand in partnership with our retailers.”
From its operations in Delano with Columbine Vineyards to blueberries grown in the Pacific Northwest and back to Lindsay, California-based Suntreat and counter-seasonal citrus programs in Australia—Tom and Rob outline the ways in which AC Foods has assembled an impressive portfolio of companies and consumer brands. This family of operations bespeaks a serious investment in long-term success, an abiding interest in producing the best possible product for AC Foods’ customers and end consumers, and a commitment to social and environmental sustainability.
“I think we recognized that there was a real opportunity to focus on the needs of the consumer, and define our strategies to grow access to healthier, better food,” notes Rob. “That’s our stated purpose. We realized, also, that there was a real need to bring institutional capital into the market and help use that capital to drive innovation and create opportunities in the communities in which we operate.”
Beyond opportunity from a financial perspective, the team believes there’s opportunity from a social standpoint in terms of building better jobs and feeding people better food.
“And there’s also the environmental standpoint. We’re taking real care to try and measure our results across all three of those dimensions—financial, social, and environmental,” Rob adds.
“I think we recognized that there was a real opportunity to focus on the needs of the consumer, and define our strategies to grow access to healthier, better food…”
— Rob Hurlbut, Co-Managing Director, AC Foods
To this end, Agriculture Capital has even brought on its own Vice President of Sustainability. In a position dedicated to maximizing resources and minimizing environmental impact, the company has welcomed Wood Turner—who helped build sustainability protocols for organic yogurt pioneer Stonyfield Farms.
“Wood has been a huge asset for us in terms of continually helping us to think outside the box in regard to how we build sustainability into all of our thought processes,” Tom tells me, noting that Turner has been instrumental in engineering an approach that looks beyond the exigencies of time and money to a more holistic understanding of AC Foods’ operations in relationship to the environment and community. It’s in that same spirit of stewardship that AC Foods is putting together its team.
“If we truly want to be an employer of choice, then we need to be communicating what those goals are and articulating our values—really living those is important to us,” adds Darren. “The talent that has come with the acquisition of some really outstanding companies has just been tremendous, and through a new structure, by setting goals and articulating and communicating what those goals are to our employees, we’ve started to bring together a real team environment. We’re engaging our employees; we really value their input. So, when I’m working with our farm managers and our employees, there’s an expectation that it’s not only best in class—it’s best for our environment; it’s best for our employees.”
Rob Hurlbut and Darren Filkins appraising operations at Columbine Vineyards’ Delano, California, headquartersFor AC Foods, the company’s “EATS” values: Excellence, Accountability, Transparency, and Stewardship infuse the way they do business. Transparency and data collection in particular are key to implementing a new approach and cultivating a new culture, and Tom tells me the company’s data-driven approach to sustainable ag is already paying dividends in terms of increased efficiency.
“Everybody talks about water and the degree to which we monitor our processes because it’s such a valuable resource,” Tom explains. “We’re putting on precisely what the plant needs. And it’s been a really interesting learning curve for us—especially with specialty citrus. 10 years ago, most citrus was probably using close to four acre-feet of water. The average is probably 3.5 today. But we’re finding that in many cases 2.5 to 2.3 acre-feet is extremely successful for growing high quality fruit and optimizing water usage. And along with that, when you’re applying nutrients, you’re not losing them. You’re not leaching them. Everything is being taken in by the plant.”
Rob adds that the company hopes its use of data to improve sustainability practices and efficiencies can become a pilot for others in the industry.
“Obviously, innovation is happening everywhere—it’s happening very quickly, and it’s often based on data collection,” says Rob. “We’re really excited to collect this data, and we also hope that others will collect more of this data so we can share among growers and begin to understand the impact of some of these changes—in order to improve the industry for everyone.”
And as Rob notes, beyond reducing impact on the environment, AC Foods’ sustainable farming practices are just good business.
“A lot of these efforts are related to fundamentally great practices in reducing overall risk—particularly to an asset over the course of a long period of time,” continues Rob. “Managing water more responsibly is going to improve the value of an asset your managing because it’s going to have water for a longer period of time. For us to be able to spend less money on pollinator services, too, because we’ve built a habitat for native pollinators, that has a very direct financial benefit.”
For AC Foods, stewardship necessarily goes beyond the land, Rob explains, and it involves the trust of long term investors including public pension funds, endowments, and insurance companies that are made up of thousands of beneficiaries.
“Our goal is to exceed the customer’s expectations”
—Tom Avinelis, Co-Managing Director, AC Foods
“At the end of the day, we’re also stewards of capital for large funds—pensions for public employees such as teachers, firefighters, and policemen,” Rob explains. “And in addition to stewarding the ground, we have the privilege of, in the case of Columbine, carrying on for the Caratan family. They built an amazing enterprise here, and we feel responsible to carry that forward into the future with the same quality. And that’s very true, certainly, with the Griffith family in the Suntreat organization.”
Darren tells me the company has a name for this holistic approach to stewardship: The AC Way.
With a commitment to caring for its investors, employees, environs, and offerings The AC Way—and ample investment in creating the best product possible in the produce space—AC Foods is forging its own path through the landscape of our industry—and offering a beacon to those hoping to follow suit.
Tom concludes: “One of our most important goals with The AC Way as a vertically integrated grower/packer/shipper is, ultimately, caring for our products from the farm all the way to the store’s shelves and onto consumer’s tables. Harvesting at the optimum time as delicately and quickly as possible; cooling our product as quickly as possible; getting the right conditions to handle it, to pack it—we do all this to create a product that delights the customer every single time. We’ve spent the capital and technology to do that.”
He leaves me with a quote that sums up The AC Way in eight simple words: “Our goal is to exceed the customer’s expectations.”