Earthbound Farm Organic

Consumers may have seen empty aisles in grocery stores across the country during the COVID-19 pandemic, but what they may not know is that America’s food supply is plentiful — and companies that deliver fresh food supplies from farm to table have maneuvered to meet the changing demand. As a result, Earthbound Farm Organic, which is part of Modiv's portfolio, quickly shifted operations at a “mission critical” cold storage facility. 

Key Changes at a Class A Cold Storage Facility

COVID-19, social distancing and shelter-in-place orders created a ripple effect within the food supply chain in 2020. Many restaurants shuttered their doors and the future remains uncertain for others in the industry. Meanwhile, 54 percent of consumers report cooking more meals at home in the wake of COVID-19, and 51 percent expressed the intent to continue doing so after the pandemic. 

Food suppliers are shifting operations in response to a new normal that finds fewer restaurants in operation and retailers responding to a sudden and perhaps long-term, increase in consumer traffic. For Earthbound Farm Organic, that means major shifts at a 216,000 square foot Class A cold storage facility that sits on approximately 40 acres in Yuma, Ariz.

Earthbound Farm Organic’s cold storage facility in Yuma typically processes 15 million pounds of fresh-cut vegetables each week into 5-pound bags for food service clients like McDonald’s and Taco Bell. Due to a significant decline in restaurant demand, employees have transitioned to preparing smaller bags of vegetables and salad blends for retailers like Costco Wholesale Corporation. 

To meet the increased demand, Taylor Farms, which owns Earthbound Farm Organic, dispatched packaging and equipment to the Yuma facility in order to send vegetables to grocers in their usual plastic clamshell boxes. Additionally, the fresh produce supplier rerouted its hired trucking fleet to better supply retail customers. 

Is there an organic farming boom on the horizon? 

For fresh food suppliers like Earthbound Farm Organic, there may be opportunities for continued growth. According to a report from Technavio, the organic fresh food market is expected to grow by 62.23 billion during 2019-2023. 

“The growth in organic farming will offer immense growth opportunities. To make the most of the opportunities, market vendors should focus on the growth prospects in the fastest-growing segments while maintaining their positions in the slow-growing segments.”— Global Organic Fresh Food Market, 2019-2023, Technavio

For organic food manufacturers like Earthbound Farm Organic, growth of that scale could necessitate investments in “mission critical” properties, particularly as the COVID-19 pandemic continues to increase demand on the consumer side of the food supply chain. The organic food brand is just one of tenants in the NNN REIT portfolio to garner media coverage for its COVID-19 response, with others like Costco Wholesale and 3M receiving similar attention.

Earthbound Farm at a Glance

• Earthbound Farm was founded on 2.5 acres in 1984 in California’s Carmel Valley and grew from backyard production to nationwide retail.
• In 2019, Earthbound Farm was acquired by family-run Taylor Fresh Foods, Inc., known as Taylor Farms. It's based in Salinas, California with 14 production facilities located throughout North America and employs over 10,000 people. The company is the top producer of organic salads sold in grocery stores across the United States.

Property Highlights

• This property is an approximately 216,000 sq. ft., Class A cold storage facility that sits on approximately 40 acres in Yuma, Arizona.
• The facility contains mission-critical, food-grade infrastructure and operates in the first mile of the production cycle.
• Taylor Farms has executed a long-term net lease through September 2033.