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June 30, 2017
Biz Money

Buyers chow down on Maine food companies

Photo / Lori Valigra
Photo / Lori Valigra
Neil Spillane, left, and Eric Holstein, co-founders of Fork Food Lab in Portland, which has been acquired by Foodworks, a Brooklyn-based culinary incubator.

Tourists aren't the only ones with an appetite for Maine food establishments. Maine's foodie culture is attracting bigger buyers. In a single week in June, three Maine food companies, two Maine-based and one part of a national chain, were acquired.

First on the block was 10-year-old hydroponic tomato grower Backyard Farms of Madison, which Canada's Mastronardi Produce Ltd. snapped up for an undisclosed amount on June 9. Backyard, which was owned by Fidelity Investments' parent FMR LLC, is now a wholly-owed affiliate of Mastronardi, FMR's Michael Aalto told Mainebiz. Mastronardi, based in Kingsville, Ontario, is North America's leading grower and distributor of specialty and commodity produce, primarily under the Sunset brand. With the Backyard purchase, it gets access to the tomato grower's $100 million in revenue and 215 employees plus its extensive network of customers at major northeastern U.S. grocery chains, including Hannaford Bros., Whole Foods and Walmart. Backyard will keep its brand, and greenhouse operations will continue uninterrupted. With Backyard, Mastronardi now has six internal greenhouses in North America and a headcount of 3,000.

Days later, Fork Food Lab of Portland was bought on June 12 by a Brooklyn, N.Y., culinary incubator, Foodworks, for an undisclosed amount. One is barely older than the other, with Fork Food Lab opening last September and Foodworks last February. Fork Food is Maine's first privately owned, membership-based commercial kitchen incubator. Foodworks was developed via $1.3 million in funding from the New York City Economic Development Corp. and incubator resident Dinner Lab.

Fork Food Lab was among the successes cited in the Greater Portland's redesignation as one of the country's Manufacturing Communities for Food Production.

"The Food Fork [acquisition] is a great opportunity to bring new resources into Portland and open new commerce channels," said Chris Hall, director of regional initiatives for the Greater Portland Council of Governments, which recently set aside $300,000 specifically for loans to Maine food manufacturers. "This is in line with how we see that sector, with someone coming in and investing. Capital access is problematic in the food sector."

The final deal, on June 16, was much larger because it involved national chain Whole Foods Market Inc., which has only one of its 460 stores in Maine, in Portland. Amazon, which has been looking for a bricks-and-mortar outlet for its growing food business, paid $13.7 billion, including debt. Analysts see the acquisition as giving Amazon a network of stores that fit into its plans for in-store pickup for its grocery delivery service, Amazon Fresh, and its distribution network.

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