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Blueberry production over the past decade outpaced strawberry production* with total supply of fresh blueberries for U.S. consumption increasing fivefold**. Investments by individuals and family offices are in part supporting this growth via Single Purpose Vehicles (SPV)—serving as alternative yield investments from traditional farms and real estate.
Carofin and Carolina Financial Securities, arms of the private investment bank Carolina Financial Group, recently acquired a blueberry farm in the southeast U.S. that was funded using a SPV, Berry Capital Management II (BCM II). This followed a similar transaction of another farm last year via the Carofin Marketplace which connects “engaged investors with worthy companies”. Accredited investors can access extensive due diligence, connect directly with each deal’s banking team and the entrepreneurs upon registering on the platform.
The financing fulfilled three core objectives for the farm. It secured a lease with an institutional agricultural Real Estate Investment Trust (REIT). It was used to purchase necessary equipment and it provided working capital for the upcoming 2023 harvest.
In addition, the SPV’s financial structure keeps management of the farm in the local community. In this case, Brick Rooks, CEO of Carolina Berry Group (CBG), applies decades of his experience to the Southeastern blueberry crop. CBG was founded in 2020 upon the acquisition of the Carolina Blueberry Association and now owns multiple companies that includes: Southern Belle Organics, Carolina Blueberry Group, Portside Solutions and Berry Express.
Rooks sees SPV investments as helping to position each farm to better serve their retail customers and marketing partners. Also, he explains, “Our direct operation of these farms gives us the vertical approach that is needed to supply such a pivotal window, with the best and most consistent supply possible.”
On the investor side Garrick Ruiz, VP of Sales and Syndication at Carofin, views SPVs as a key benefit to investors who are specifically looking for alternative investments.
“BCM’s repeatable structure has gained traction with investors for their current income-oriented portfolios. We’re thrilled with the continued success of this program,” Ruiz said.
Over the course of the past decade Caron’s funding activities extended to companies in the food production vertical, including sweet potato farming, poultry processing, tomato farming, and organic beef cattle ranching and others.
Caron’s ability to raise capital is reflected in its long-term track record of making direct private investments in venture-stage through middle-market operating companies across industries. They have raised $1.3 billion across 200+ direct private investments, inclusive of their affiliates, in industries that include agriculture, aviation, medical technologies and consumer brand products.
Joshua Green, VP of Sales and Analytics at Carofin, sums up the win-win that Single Purpose Vehicles bring, particularly to blueberry farming. “Southern-grown blueberries continue to be a high conviction crop, as demonstrated with the closing of BCM II. We’ve got a structure that enables Brick to go out and do what he does best — farm berries and grow CBG’s footprint in the Southeast.”
*Department of Agriculture, New Jersey Field Office. 2019 Blueberry Statistics, United States Department of Agriculture, 2020.
**“USDA: Blueberry Demand Growing and Consumers Looking to Have This Fruit Year-Round.” Blueberries Magazine Consulting, Blueberries Consulting, 14 Dec. 2020.
