Driediger Farms Business Profile

DRIEDIGER FARMS LTD.
BLUERIDGE PRODUCE INC.
CONFIDENTIAL INFORMATION MEMORANDUM
DIVESTITURE » SUCCESSION » EXIT PLANNING » SELL
1.888.859.5388 | www.pavilionservices.com

Opportunity
An extremely rare opportunity to acquire a leading berry
growing and processing facility in a premium location in
beautiful British Columbia, Canada.
New owners will acquire a business that is operating
efficiently, has solid industry contracts and connections and
has capacity to expand the product offering to other fruit
and vegetable products.
Overview
This business opportunity offers one of the finest quality
berry farms with the latest technology in food processing
facilities in British Columbia, Canada.
The business is located alongside the No. 1 highway which
is prime real estate for potential future development. The
location offers easy access for distribution and attracting
local employees.

Table of Contents
Business Summary 3
Facilities and Business Premises
6
Products & Services
9
Administration and Operations
10
Current Sales and Marketing Efforts
13
Sales Statistics
14
Competitive Overview
15
Market Overview
17
Opportunities
20
The information contained herein is based on sources that are believed to be reliable. Neither Driediger Farms Ltd. nor Blueridge
Produce Inc. nor Pavilion Business Services nor any of its directors, officers, employees or agents, however, make any
representation or warranty as to the accuracy or completeness thereof, take any responsibility for any errors or omissions which
may be contained herein or accept any liability whatsoever for any consequences arising from any use of or reliance on the
contents hereof. Each prospective purchaser or investor acknowledges and agrees that he or she and his or her professional
advisors are solely responsible for evaluating all information contained herein.
Contact Pavilion Business Services
To learn more about the various exit options you have as a business
owner and how we can help you successfully sell your company –
call us to arrange an exploratory meeting and discuss your options
in a confidential manner.
1.888.859.5388
www.pavilionservices.com
2

Business Summary
General Business Information
This opportunity includes the sale of two companies, Driediger Farms and Blueridge Produce. Each company will be referred to
separately by name, or as “the farm” and “the packing company”, or collectively they will be referred to as “the company.”
Both businesses are located on the same property in Langley, BC.
Driediger Farms
Name of Business
Type of Business
Year Founded
Reason for Selling
Driediger Farms Ltd.
Berry farming
1964
Retirement
Address
7361 240 St., Langley, BC V1M 3P8
Number of Employees:
08 - Full Time
Owners
Rhonda Driediger (100%)
(not including shareholders)
05 - Part Time
Property
Website
160 acres owned by Driediger Farms
www. driedigerfarms.com
05 - Seasonal (approx.)
20 -120 Seasonal Contracted labour
Driediger Farms was founded in 1964 and is a 160 acre berry farm located in Langley, BC. The farm has established contracts and
distribution channels to sell fresh produce to wholesale and retail companies and directly to the public.
In 1995, the farm expanded operations to include fresh blueberry packing. Since 2006, the packing operation has been operating
as a separate company under the name of Blueridge Produce Inc.
The company’s year-end is December 31st.
3

Business Summary
General Business Information
Blueridge Produce Inc.
Name of Business
Type of Business
Year Founded
Blueridge Produce Inc.
Fresh and frozen food processing
2006
Address
Owners
Property
7361 240 St., Langley, BC V1M 3P8
Peter Olson (100%)
Leased from Driediger Farms
Reason for Selling Retirement
Blueridge Produce split from Driediger Farms in 2006 for tax purposes. It is now a separate entity that works closely with Driediger
Farms. The processing company began packing blueberries for Driediger Farms and now packs produce from 100 other farms in
the Fraser Valley and Washington State.
The processing and packing company has expanded its offerings to include individual quick frozen (IQF) blueberries, raspberries,
strawberries, blackberries, cherries and vegetables. The company also offers poly bagging and custom blended poly-bagging
services, cross-docking, storage and repacking services at the facility.
The company’s year-end is December.
The Company
Collectively, the company is a fully-integrated operation on one
property for growing, processing, packing, freezing, bagging and
shipping fruit. The spacious and strategically planned yard offers
efficient traffic management for shipping and receiving.
The majority of sales revenue and volume is through the packing
company sold wholesale to large Canadian and US retailers.
Products are distributed to eastern Canada and the United
States. International sales are an expanding focus but are being
done on a season by season basis. Markets in Japan, China, Chile
and Europe have been added in recent years.
4

Business Summary
Opportunity
The business has a diverse range of experienced and long-term
employees who will be a part of the transition to new owners.
The Driediger Farms and Blueridge Produce team is capable of
running the day-to-day operations of the business without a
constant presence by new ownership.
The current owners of Driediger Farms and Blueridge Produce
are willing to remain in the business after the sale to ensure a
smooth transition.
This is a unique opportunity to acquire a major player in the
berry growing, packing and distribution industry. The property,
buildings and equipment are all included in the sale of the
two companies. A new owner will benefit from the wide brand
recognition of the “Driediger Farms” and “Summer’s Fresh” labels.
5

Facilities & Business Premises
Langley
The company is located in Langley, British Columbia - Canada.
Langley is a beautiful city in close proximity to the United States
border and Vancouver, BC.
Langley housing costs are up to 50% less than Vancouver,
making it an affordable area. Its proximity to Highway 1 and
the newly opened Port Mann Bridge provides a convenient
commute to and from surrounding cities. With strong,
continuous economic growth, Langley is an attractive place to
live and own a business. Some features of Langley include:
• Long history of agriculture
• Located near the Abbotsford, Vancouver and Bellingham
International Airports
• An attractive central destination for the business world
• Population is approximately 115,000 people and growing
• Part of the Greater Vancouver Regional District (GVRD)
Building and Equipment Investments
The company has been actively expanding its operation through
building upgrades and investments into new technology. The
following investments have been made recently:
Driediger Farms
• 2012 Retail Farm Market Expansion, $150,000
Blueridge Produce
• 2010/11
• 2011/12
Fresh processing plant, $2.8 million
Freezer and IQF technology, $3.0 million
• 2012/13 Process building, $3.8 million
7

Facilities & Business Premises
Below are descriptions of the main buildings on the property
that are included in the sale.
Fresh Packing Plant
The new fresh packing plant is 60 x 275 feet long which
includes a blast cooler, 24 x 100 foot mezzanine and 60 x 50
foot office, lunchroom, washroom and storage area.
Blueridge Produce has obtained organic certification for coand
re-packing of frozen fruits and vegetables through Pro-
Cert Organic Systems Ltd.
Freezer
The new freezer is 60 x 120 feet. Included is a shipping area
so the actual freezing space is 6,000 sq. ft. x 25 feet high. With
the included racking, approximately 2.0 million pounds of
product can be stored on site.
New Processing Plant
The new processing plant has a 10,000 lb per hour Octofrost
IQF tunnel that is capable of freezing most fruits and
vegetables. In 2013, completely new in-feed and outfeed
lines for the IQF tunnel were designed and custom
fabricated. This gave the ability to run 10,000 lb/hr of graded
final product. Re-running is not required to meet customer’s
specifications.
Retail Farm Market
The retail farm market is located at 23823 – 72nd Avenue,
Langley, BC. This retail farm market is 2,700 sq. ft. and has its
own cooling rooms. It was expanded and upgraded in 2012.
Shop
The shop is 40 feet x 120 feet. The company recently built a
40’ x 120’ addition for additional equipment and packaging
storage.
8

Facilities & Business Premises
Property
The property is available and is included in the sale of the business. Driediger Farms owns 100% of the property, and Blueridge
Produce leases the packing and processing facilities.
The property is 160 acres of prime sandy loam soil over gravel for excellent drainage. Sandy loam is considered to be a prime
berry growing medium. Approximately 75% of the operation is on low maintenance drip irrigation with automatic controllers and
fed from three separate high volume, deep water wells located on the property.
The three major parcels are adjacent to each other, predominately comprising three of the four corners at the intersection of
240th Street and 72nd Avenue. Additional unrelated lands can be purchased next to the existing operation and several large
blueberry properties are for sale within two miles of the home location.
Notable features of the property include:
• 160 acres of prime farmland
• 4 adjoining parcels with separate titles
• Flat and dry land perfect for growing berries
• Several high production deep wells provide ample drip and
overhead irrigation
• Close to Trans-Canada Highway 1
There is room for further expansion on the property and, if
required, there are several additional locations available for
employee housing.
Crops
The operation has been increasing the blueberry plantings
each year and removing low volume or low income producing
crops. Approximately 86 acres is currently planted in blueberries
with an additional five to fifteen acres planned for 2015. The
farm minimizes the amount of land needed for crop rotation of
strawberries and also employs techniques to minimize fallow
acreage.
9

9

Products & Services
Fresh Berries
Driediger Farms is the fruit growing portion of the opportunity.
The following fruits are grown and sold:
• Raspberries – 20 acres
• Blueberries – 86 acres
• Strawberries – 22 acres
• Blackberries – 1.5 acres
These products are sold through local distributors, Blueridge
Produce and the retail farm market located on the property.
Processing and Packaging
Blueridge Produce packs fresh berries from approximately
100 farms in BC’s Fraser Valley and Washington State. Berries
are packed under established brands – “Driediger Farms” and
“Summer’s Fresh”. If requested, Blueridge Produce also is able to
offer its clients custom packing for berries, co-packing or custom
labeling.
The packing company has long-term relationships with, and sells
directly to, major retailers in Canada and the US. Fresh produce
is also distributed in Eastern Canada and throughout the United
States via distribution companies.
Since 2013, Blueridge Produce has offered individually quick
frozen (IQF) berry and vegetable products. The IQF technology
allows Blueridge Produce to sell products to domestic and
international markets that require a higher level of quality for
products such as retail poly-bagged frozen berries.
11

22

Administration & Operations
Company Structure
Table 1 below details the company’s shareholders.
Table 1: Company Shareholders
Shareholder’s Name Company
Shareholding %
Rhonda Driediger Driediger Farms Ltd. 100%
Peter Olson
Blueridge Produce Inc. 100%
Driediger Farms
Driediger Farms, including the land, buildings and other assets are owned by Ms. Rhonda Driediger. Rhonda’s executive role
includes sales, finance, business development and overall company management. Rhonda is willing to stay with the company in
some capacity to ensure a smooth transition.
Table 2 below details the Driediger Farm’s key employees and their length of service.
Table 2: Key Staff
Name Position
Age Length of Service
Rhonda Driediger
Owner / Business Development
50
18 Years
Employee 1
Plant Manager
38
2 Years
Employee 2
Quality Assurance Manager
44
2 Years
Employee 3
Retail Market Manager / Admin
41
3 Years
Employee 4
Field Manager
40
8 Years
Employee 5
Harvest Supervisor
30
3 Years
Employee 6
Agricultural Manager
33
1 Year
13

Administration & Operations
Operations Process
Driediger Farms
Berries are grown and sold directly to:
• Blueridge Produce
• Wholesalers and retail stores
• General public
Blueridge Produce
The packing company receives fresh berries from 100 contracted
growers. It receives the product at the scale where it is graded
and assessed. The product then moves to either the fresh
processing plant or to the IQF plant.
Many wholesale and retail customers are loyal with long-term
relationships. Seasonal fluctuations and changes to company
operations require flexibility in scheduling fresh and frozen sales
programs. At present, the seasonal planning is done directly by
Rhonda Driediger, minimizing the dependence on brokers and
keeping control of pricing.
Most sales in Canada are direct to the retailer on purchase orders
with firm prices. The majority of sales into the US are through
one of five distribution companies that only represent BC berries
from Blueridge Produce.
Pricing
Driediger Farms
The farm minimizes risk by selling directly to the public,
wholesalers, retailers, and Blueridge Produce. This allows for
greater control over prices and profit margins.
Blueridge Produce
The packing company prices its products on the open
market. Some retail clients request forward pricing for a
specified period of time.
14

Administration & Operations
Supply Chain
Blueridge Produce
The packing company sources its produce from a number of
strategic suppliers. The produce is locally grown, with some
being purchased from farms in Washington State. An estimated
10-15% of the berries processed are from Driediger Farms.
Costs
The company is the most sensitive to the following costs:
• Labour – Minimized through automation, upgrading
machinery, and better shift management. 2104 saw an adjusted
$245,000 reduction in labour by investing the same amount in
better processing equipment.
• Packaging – Packaging costs and volume discounts are
negotiated prior to each season. All pricing is FOB Langley,
delivered palletized and poly wrapped.
• Fluctuation of raw product pricing – This is an industry
variable that is similar for all packers and processors.
• Freight – All freight charges are negotiated at the beginning
of the season as “all in” rates to reduce fluctuation of fuel
surcharges.
To manage labour costs, Blueridge Produce has purchased automated equipment and reduced personnel from 90 to 55 in the
fresh packing plant while, at the same time, increasing the plant’s production capacity.
To reduce packaging costs, the company has recently switched packaging suppliers in order to reduce its overall plastic clamshell
costs and purchased a tray forming machine that cut costs on cardboard by up to 40%. It is also looking into a joint purchasing
partnership with other companies to buy packaging in bulk.
Raw product costs are continually monitored to maximize returns. The costs are often based on worldwide berry production
and inventory amounts. Blueridge Produce continually looks to find the balance between pricing and quality of incoming raw
products.
To manage freight costs, Blueridge Produce negotiates rates on each load with only proven transport companies that have the
experience and capabilities to deliver the product on time and in good condition.
15

9

Current Sales & Marketing Efforts
Sales Efforts
Driediger Farms
The Farm sells most of the product wholesale to retailers and Blueridge Produce. Fresh berries are sold directly to the public
through the retail farm market located on the property.
Marketing Efforts
Marketing mediums include:
• Social Media
• Company Website
• Television Ads
• Radio Ads
The company uses trade shows such as the American Frozen Food Institute (AFFI-Con), Canadian Produce Marketing Association
(CPMA) and PMA Fresh Summit conventions, as well as, the company website (www.driedigerfarms.com and www.driedigerfarms.
com/blueridge) and its good reputation to promote its products.
Blueridge Produce
The packing company sells 70% of its fresh products directly to retail, and 30% to distributors across North America. The
majority of sales are due to long-standing working agreements. Frozen sales are 80% to the US and the balance to Canadian and
international destinations.
Improving Sales and Marketing
The company has been successful at utilizing the strength of its brand and reputation in the marketplace, however, additional
growth could be realized if a new owner established a broader sales and marketing initiative. Currently, the focus is on strategizing
with new distribution companies to broaden and increase the reach of the expanded frozen capacity.
The new fresh packing plant has been deliberately not operating at its full capacity, as the company has focused on profitability
over volume. The equipment and space available allows for production to be increased from 5 million pounds to 8 million pounds
per year. A targeted campaign to increase sales in the fresh packing side of the business is underway and has shown positive
results.
17

18

Sales Statistics
Figure 1 below shows the percentage of the total income generated by the two companies.
Figure 1: Percentage of Revenue Generated by Both Companies
21%
Driediger Farms
Blueridge Produce
79%
Figure 2: Blueridge Produce Revenue Breakdown
Process Blackberries,
0.02%
Process Blue Drum
Stock, 1.12%
Direct Wholesale - USA
Blueberries, 13.65%
Process Cherries,
0.01%
Custom Work
Cherries,0.76%
Process Strawberries,
0.07%
Direct Wholesale -
Strawberries, 0.40%
Direct Wholesale -
Blueberries, 45.82%
Scale & Lot Tracking
Program, 0.14%
IQF Blueberries
Cases/Totes, 35.38%
Process Raspberries,
0.32%
Direct Wholesale -
Raspberries, 2.30%
19

20

Competitive Overview
The Fraser Valley is the heart of berry farming in BC and is the
largest blueberry producing region in North America. There are
numerous berry farms that surround the company; however,
only a few have the same one-stop grow-pack-ship operation.
Most farms grow and sell to packing operations.
On the packing side of the business, there are a few major
competitors that offer similar services as Blueridge Produce:
• Fraser Valley Packers Inc.
• South Alder Farms
• Lally Group of Companies
The current owners describe the competition as friendly. The
packing companies often seek to work together on issues
such as new packaging, food safety and traceability in order to
improve overall industry standards in BC.
Competitive Advantages
There are numerous competitive advantages that make this a unique acquisition opportunity, including:
• Fully integrated operation – growing, processing, packing, freezing and shipping all from a single location
• Spacious property – the yard layout was designed for efficient traffic management in the shipping and receiving areas
• Location – centrally located and adjacent to major transportation routes
• No middlemen – the company minimizes the use of brokers to sell its products and, as a result, the margins are higher and
they retain control of the product placement
• IQF capability – the ability to individually quick freeze berries and pack as final grade further sets this company apart from the
competition
• Modern facilities – the processing and packing plant are modern and designed with the latest in efficient technologies
• Reputation – the brands associated with this company are well-known and respected throughout the industry
21

Competitive Overview
Awards and Recognition
The company has received the following awards and distinctions:
• The Farm Credit Corp nominated Rhonda Driediger for the Rosemary Brown Award
• The company was awarded the BC Environmental Farm Plan status
• Active in the local Chamber of Commerce
• Rhonda Driediger is a current director and past Chairman of the BC Agriculture Council, an umbrella organization that
represents over 20,000 farms and 95% of the BC Farm Gate Value in Agriculture
• Kosher certification
Associations
The company is a registered member of the following trade associations:
• Canadian Produce Marketing Association (CPMA)
• Fruit and Vegetable Dispute Resolution Corporation (DRC)
• BC Food Processors’ Association
• Fraser Valley Farm Direct Marketing Association
• BC Vegetable Marketing Commission (BCVMC)
• BC Strawberry Growers Association
• Raspberry Industry Development Council (RIDC)
• BC Blueberry Council
• Greater Langley Chamber of Commerce
• Circle Farm Tour
22

Market Overview
The company operates primarily in North America (95%), with 5% of revenues being generated from international markets such as
Japan and Ireland. Population growth will continue to fuel the demand for fresh and frozen produce.
Frozen Produce Trends
The development of advanced freezing technologies has enabled efficient preservation of the nutritional value of fruits and
vegetables, reduced material losses and resulted in longer product shelf life. All of these factors have helped boost consumer
popularity of frozen fruits and vegetables. Given the dynamic and intensely competitive market environment, product innovation
ranks as a key to success in the marketplace.
Consumption of frozen fruits and vegetables in daily diets is steadily increasing driven by shifting food preferences and
rising consumer emphasis on health and well-being. Favourable factors, such as fast-paced lifestyles, year-round availability,
1
convenience and the development of innovative freezing technologies, fuel growth in the frozen fruit and vegetable industry.
Sales of frozen fruits and vegetables represent the global fruit and vegetable industry’s second most important source of revenue,
accounting for an estimated 36% of revenue. The global fruit and vegetable processing industry is expected to grow at a strong
rate over the next five years. Demand for industry products (processed fresh fruit and vegetables into canned, bottled, preserved,
frozen, dried, or otherwise processed or preserved food products for human consumption) is expected to grow strongly in
2
developing economies such as China and India.
Individually Quick Frozen (IQF)
IQF freezer tunnels use ammonia-based refrigeration to freeze
small sized food products that are normally very difficult to
freeze - such as raspberries, peas or diced vegetables. This allows
the products to be frozen as single units rather than in a group
which enables the products keep their own individual form,
texture and, most importantly, taste.
Individual quick freezing is also used as a way to freeze seasonal
products such as fruits and vegetables. The technology has also
enabled other food products to be created, such as prepared
microwave meals.
1
Frozen Fruits and Vegetables – A Global Market Perspective
2
Global Fruit & Vegetables Processing, IBISWorld Industry Report, August 2014
23

Market Overview
Health Food Trends
There has been a steady increase in the amount of media coverage
regarding how berry consumption can have significant health benefits.
The buzzword in the industry is “super foods,” meaning foods such as
raspberries and blueberries that are high in antioxidants and other
nutrients that are good for the human body.
Particularly popular berries include strawberries, blueberries and
raspberries. These berries are generally readily available and are in high
demand. Since fresh berries are not always available, consumers are also
increasing the demand for dry powders or frozen fruit that have a longer
shelf life and contain the majority of the health benefits.
Increase in Blueberry Production
BC is North America’s largest cultivated blueberry producer. Through the BC Blueberry Council, BC producers will build on their
long-term international strategy to highlight Canada’s world class blueberries abroad and increase sales. The Honorable Ed
Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, announced an investment in the British Columbia
Blueberry Council (BCBC) to help growers market their blueberries in new and existing international markets.
On October 25, 2012, the Government of Canada announced an $88-million investment provided through the Agri-Marketing
Program under “Growing Forward.” This program helps industries implement long-term international strategies, including
3
international market development, industry-to-industry trade advocacy, and consumer awareness and branding activities.
The Canadian Government has recently identified market development as a priority under “Growing Forward 2” and this
announcement is another example of initiatives to enhance competitiveness and long-term growth in Canadian agriculture,
specifically blueberries. In addition to generous multi-year funding for risk management programs, Growing Forward 2 also
includes more than $3 billion in strategic initiatives for innovation, competitiveness, and market development.
The increased investment in blueberry plantings will keep the prices low enough that producers will continue to develop more
blueberry products and uses.
High bush blueberry production rose by 5% year-on-year in 34 US states and BC during 2012, reaching 559.4 million pounds
(253.8 million kilograms).
4
The latest figures released by the U.S. Highbush Blueberry Council (USHBC) show this is a 32% increase over 2008 production.
“Nearly half the 2012 North American production (285.9 million pounds) comes from the West Coast region. Since 2008, California
production nearly tripled and Washington more than doubled. BC and Oregon have expanded steadily but in smaller increments,” the
USHBC said in a release.
“The Southern region, with nearly a quarter of total North American production (138.5 million pounds), is the other high-growth region
where Florida, Georgia and North Carolina have shown significant increases over the past five years.”
Blueberry varieties harvested in BC, Washington and Oregon are the most preferred.
3
Media Relations – Agriculture and Agri-Food Canada
4
U.S. Highbush Blueberry Council (USHBC)
24

Market Overview
Blueberry Export Destinations Worldwide
Figure 4 below illustrates the top 10 destinations for blueberry exports in the world. The United States is the largest consumer of
blueberries at 61.8% of the world’s blueberry exports.
Figure 4: Top 10 Blueberry Export Destinations
United States
Japan
Germany
Netherlands
China
UK
France
Australia
Belgium
South Korea
Other
Blueridge Produce is located in Langley, BC which is approximately 15 minutes away from the Canadian-US border. In addition,
there are no tariffs on most fruit.
25

26

Opportunities
Growth Potential
There are numerous avenues of growth that can be explored by a new owner, including:
• International Export
China is opening as a new market to import fresh Canadian blueberries. The company has established distribution channels
with freight forwarding in controlled atmosphere containers and is ready to begin shipping when the border opens for
blueberries.
• Leasing
The current owners are investigating leasing additional producing fields as a cost-effective alternative to acquiring more land.
• New product lines
The packing plant has recently expanded into other product lines including vegetables, whole/diced, and a line of organic
products. Blueridge Produce has recently obtained organic certification for co-and re-packing of frozen fruits and vegetables.
• Sales and Marketing
Currently the company is not utilizing an inside sales team or a dedicated marketing program. An investment in this area of the
business could result in the company reaching its capacity sooner.
27

30

CONTACT
1.888.859.5388 | info@pavilionservices.com
DIVESTITURE » SUCCESSION » EXIT PLANNING » SELL
1.888.859.5388 | www.pavilionservices.com