As part of its commitment announced last week to reach 100 percent renewable energy by 2025, West Los Angeles agriculture giant Wonderful Co. has already inked one major renewable power contract and is in negotiations for two more, the company said.
Following previous solar rooftop panel installations, these contracts — if they all come to fruition — would put the company about halfway toward its 100 percent renewable energy commitment.
The move to work with outside renewable power providers is a new step for Wonderful. The company has previously undertaken its own renewable energy projects; in 2013, it installed rooftop solar panels at its Justin Wines, Wonderful Pistachios & Almonds, and Halos facilities in the Central Valley.
But this year, Wonderful has moved to a new phase: signing contracts with third parties to develop projects on Wonderful Co. land that are intended to provide almost all of the 85 megawatts of peak-capacity power it needs for its facilities.
The company in January inked a power-purchase agreement with NextEra Energy Resources — the renewable power generating subsidiary of NextEra Energy Inc., of Juno Beach, Fla. — to build a 23-megawatt solar project on 157 acres of fallow farmland at an unspecified company facility in California’s Central Valley. Financial terms of that agreement were not disclosed.
Wonderful’s Vice President of Strategy Steven Swartz declined to name the other two companies Wonderful has engaged in negotiations for long-term power purchases. The company expects to announce those deals later this year, Swartz said. Assuming these two agreements are signed, Wonderful intends to spend a total of roughly $10 million up front for all three renewable power contracts, he said.
“Renewable energy has developed to the point where it’s financially attractive to make this level of commitment,” Swartz said.
Going green
Wonderful, a privately held company founded by Beverly Hills billionaires Lynda and Stewart Resnick, reported $4.2 billion in revenue in 2017, placing it at No. 5 on the Business Journal’s Largest Private Companies list. The company, which has about 10,000 employees worldwide, is headquartered on Olympic Boulevard in West Los Angeles.
Wonderful is one of the largest agricultural operations in California with more than 180,000 acres of farmland in the state. The company claims it is the largest farmer of tree nuts and second largest produce company in the United States.
Obtaining power to run such a large operation can be costly. But executives say the declining price of renewable power is a key reason the company can now shift to cleaner sources.
Wind and solar power prices have been dropping roughly 10 percent a year since 2011 thanks to technological advancements, said Sam Kimmins, who leads RE100, a group of more than 160 major companies that have committed to 100 percent renewable power.
As part of its announcement last week, Wonderful said it has joined RE100.
Sticking to the commitment
One corporate sustainability expert said Wonderful’s renewable power commitment stands out because it’s one of the few large, privately held companies to make such a pledge.
“Most of the time, it’s large, publicly held companies that make these commitments after facing some pressure from activist and institutional shareholders,” said Mike Wallace, partner in the Portland, Ore., office of BrownFlynn, a subsidiary of ERM Group Inc., of Walnut Creek.
Wonderful has faced criticism from environmental groups over the amount of water it uses.
Wallace said any company that makes renewable power pledges could face questions around how to verify it’s meeting the goals it set forth.
“As more and more companies like Wonderful start making these commitments, the need for independent verification has grown.” RE100 head Kimmins said the organization relies on annual self-reporting by member companies.
