Freshly renamed Fruitist Holdings Inc. is rapidly expanding its growing operations in China and the United States amid a surge in global demand for its jumbo and premium berries.

Expansion plans are underway despite ongoing trade conflicts and growing concerns about a global economic slowdown that may prompt shoppers to veer away from premium products.

The Century City-based company, known as Agrovision Corp. until last week, is best known for its jumbo blueberries, which can be found on store shelves at Albertsons, Costco, Trader Joe’s, Walmart and Whole Foods.

Fruitist’s berries have consumers’ attention, making the company a financial juggernaut. Last year, the company recorded about $350 million in sales, racked up at more than 12,500 stores in North America and hundreds more in China, India and other countries. It has also raised more than $600 million in venture capital since its founding in 2012. This includes its most recent $100-million funding round, featuring backing from the family office of Ray Dalio, the founder of the Bridgewater Associates hedge fund.

The money raised has been utilized to swiftly expand its global premium berry production. This includes new operations in China and Oregon, and the company is currently considering sites in California.

“These markets are demanding way more supply than what we have,” said Steve Magami, chief executive and co-founder of Fruitist. “To meet this demand, we’ve installed more plantings that will result in our volumes growing by multiples over the next several years.”

Peru: Ideal testing ground

Magami, who once worked in private equity, came up with the idea for Agrovision – Fruitist – nearly 15 years ago while scouting for biofuel feedstocks for a renewable energy company in Peru. During his search in the arid northern coast of the South American country, he came across sugarcane and fruit “of unmatched quality.”

An avid consumer of fruit, Magami was often disappointed by the uneven quality of fruit at grocery stores, leading him to examine the research and development programs of the Peruvian fruit growers.

“The opportunity I saw was in the quality-driven production super-premium berries,” he said.

The key issue to be addressed, he added, was controlling the quality of the fruit as the growers ramped up production. And that could be done by removing the various middlemen in the chain from farm to the retail store shelf – in essence, becoming a vertically integrated agricultural business. Everything is done in-house, Magami said. This begins with owning the farmland, then nurturing the crops, packaging the fruit and delivering directly to grocery store operators.

Magami recruited an acquaintance from his private equity days, Thomas Snyder and, with some financial help from a pair of angel investors, decided to launch his company.

They chose that north coastal region of Peru – a prime blueberry growing territory – as the proving ground for the concept of a vertically-integrated farm operation, starting with blueberries.

“That area has perfect stability, with cool mornings and warm afternoons and the right kind of humidity and light levels,” Magami said.

The idea was to use selective breeding techniques to come up with jumbo-sized blueberries with the right firmness, crunch and shelf-life. They would then have enough control over the growing and distribution environment to ensure the consistent delivery of high-quality product. Magami stressed that there is no artificial genetic modification involved – it’s all about the breeding selection.

‘Super-snackable for people on-the-go’

The fledgling company was able to capitalize on technological advances in growing techniques – including data analysis to determine optimal planting and picking times – and the increasing desire of consumers in the United States and elsewhere for high-quality, snackable fruit products.

“The fruit had to be super-snackable for people on-the-go,” Magami said.

Backed by the company’s first financing round from institutional investors, Fruitist planted its first blueberry crops in Peru. Then, over the two-year growing period, it focused on breaking into well-established wholesale and retail networks in the United States and elsewhere.

“Retailers were – and continue to be – incredibly loyal to incumbent suppliers,” Magami said. “But they are also always looking for year-round suppliers with high standards. And we showed up with our new approach of end-to-end quality control.”

Magami said retail chain supply managers immediately saw the value of the company’s jumbo blueberries – marketed under the brand name Fruitist – and started submitting their orders.

Consumers such as Inglewood resident and creative director Scott Hanson were won over, despite the price tag which was nearly 50% higher than more conventional blueberries.

“My kids are insane about eating fruit,” Hanson said. “One day at Trader Joe’s, I saw the Fruitist super-big blueberries at the end of an aisle and decided to try them. The blueberries were a big hit with my kids.”

Hanson said the $6-per-clamshell basket price was not a deterrent. “To be honest, I didn’t even notice the price premium,” he said. “I just figured with inflation, everything is more expensive anyway.”

Expanding into other berries and locations

As the orders poured in, Fruitist started expanding into other berry products, including raspberries, blackberries and strawberries. In December, the company ventured outside the berry market for the first time with the purchase of a Chilean cherry grower.

• SEE ALSO: Agrovision Branches Into Cherries

The company has also expanded geographically, with operations in Mexico, Egypt and Morocco over the last five years. Fruitist also launched its first United States growing operation nearly four years ago on farmland it purchased near the Oregon capital of Salem. 

Sales started spiking, with last year’s $350 million comprising about 20% of the overall premium berry market, according to figures from Fruitist.

There has been competition from a handful of other jumbo blueberry producers, such as the Sekoya fruit brand arm of Lowell, Oregon-based Fall Creek Farm and Nursery Inc.

But according to Jennifer Strailey, editorial director of The Packer trade publication that covers the fresh produce supply chain, Fruitist “has gone after the healthy-snacking consumer, delivering a premium product.”

Strailey added the jumbo size of the blueberries is especially appealing. According to a survey of shoppers, The Packer found that between 43% to 53% of people purchased jumbo blueberries in the past 12 months, with the exact percentage depending on the shopper’s age cohort.

“These figures show that the market is clearly big enough to handle the competition we’re seeing for the jumbo berry market amongst several small-to-midsize companies,” she said.

Impact of trade conflict

On the surface, it would seem that the broad tariffs of at least 10% that the administration of President Donald Trump has imposed on many countries would hurt Fruitist.

But Magami said he doesn’t expect a huge impact. “We’re in the premium berry market, so people are already demonstrating they are willing to pay more for our berries,” he said.

Also, in a strategy that predates the tariffs, the company’s growth plans in the United States will reduce the need for imports to serve the market. The Oregon farm just produced its first berry crop in recent weeks.

A decision on one of three locations for a California farm will come later this year, Magami said.

“We expect to have our first crop planted sometime early next year at one of these three locations,” he said.

Fruitist also recently expanded its operations in China, launching an 80-acre farm in Yunnan province (bordering Myanmar and Vietnam) in February of last year. A small first-year crop of jumbo blueberries was harvested a few weeks ago for its domestic market in China. Larger crops are expected in the next couple years.

With these farms in the United States, China and other international locations, Magami said, “We have the flexibility to shift supply across markets.”