Limoneira Company (Limoneira) primarily operates as an agribusiness company.
The company’s operations consist of fruit production, sales and marketing, rental operations, real estate and capital investment activities.
The company is one of California’s oldest citrus growers and are one of the largest growers of lemons in the United States. According to the California Avocado Commission, the company is one of the largest growers of avocados in the United States. In addition to growing lemons an...
Limoneira Company (Limoneira) primarily operates as an agribusiness company.
The company’s operations consist of fruit production, sales and marketing, rental operations, real estate and capital investment activities.
The company is one of California’s oldest citrus growers and are one of the largest growers of lemons in the United States. According to the California Avocado Commission, the company is one of the largest growers of avocados in the United States. In addition to growing lemons and avocados, the company grows oranges and wine grapes.
The company has agricultural plantings throughout Ventura and San Luis Obispo Counties in California, Yuma County in Arizona, La Serena, Chile and Jujuy, Argentina, which collectively consist of approximately 3,400 acres of lemons, 1,400 acres of avocados, 100 acres of oranges and 400 acres of wine grapes. The company also operates its own packinghouses in Santa Paula, California and Yuma, Arizona, where the company processes, packs and sells lemons that the company grows, as well as lemons grown by others. The company has a 47% interest in Rosales S.A. (‘Rosales’), a citrus packing, marketing and sales business, a 90% interest in Fruticola Pan de Azucar S.A. (‘PDA’), a lemon and orange orchard and a 100% interest in Agricola San Pablo, SpA (‘San Pablo’), a lemon and orange orchard, all of which are located near La Serena, Chile. The company has a 51% interest in a joint venture, Trapani Fresh Consorcio de Cooperacion (‘Trapani Fresh’), a lemon orchard in Argentina.
The company’s water resources include water rights, usage rights and pumping rights to the water in aquifers under, and canals that run through, the land the company owns. Water for the company’s farming operations is sourced from the existing water resources associated with the company’s land, which includes rights to water in the adjudicated Santa Paula Basin (aquifer) and the un-adjudicated Fillmore and Paso Robles Basins (aquifers). The company also uses surface water in Arizona from the Colorado River through the Yuma Mesa Irrigation and Drainage District (‘YMIDD’). The company uses ground water provided by wells and surface water for the company’s PDA and San Pablo farming operations in Chile and the company’s Trapani Fresh farming operations in Argentina.
The company is making strategic investments in California agriculture and real estate. The company has an interest in two real estate development projects in California. These projects include multi-family housing, single-family homes and apartments of approximately 800 units in various stages of planning and development.
In December 2023, the company sold 12 acres of real property located in Yuma, Arizona.
On April 30, 2024, the company’s real estate development joint venture with The Lewis Group of Companies (‘Lewis’) closed an additional 554 residential homesites at the Harvest at Limoneira master planned community in Santa Paula, CA (‘Harvest’).
On May 7, 2024, it was announced that the Santa Paula City Council approved the proposal brought by the company’s real estate development joint venture with Lewis to increase the number of entitled lots at Harvest from 1,500 dwelling units to 2,050 dwelling units. The Santa Paula City Council approved an amendment allowing for the 550-unit increase on April 3, 2024. The 550-unit increase will provide 250 additional single family for-sale homesites within Phase 3 of Harvest. Additionally, the company in partnership with Lewis plans to construct 300 multi-family rental homes on a mixed-use portion of the project.
Business Divisions
The company has three business divisions: Agribusiness, Rental Operations, and Real Estate Development. The Agribusiness division includes four reportable operating segments: Fresh Lemons, Lemon Packing, Avocados, and Other Agribusiness, which primarily includes oranges, specialty citrus, other crops and farm management services. The Agribusiness division includes the company’s core operations of farming, harvesting, lemon packing and lemon sales operations. The Rental Operations division includes the company’s residential and commercial rentals, leased land operations and organic recycling. The Real Estate Development division includes the company’s investments in real estate development projects.
Agribusiness segment
Farming
Lemons. The company markets and sells lemons directly to its food service, wholesale and retail customers throughout the United States, Canada, Asia, and certain other international markets. The company is one of the largest lemon growers in the United States with approximately 3,400 acres of lemons planted primarily in Ventura County, California and in Yuma County, Arizona. Ventura County is California’s top lemon producing county.
There are many varieties of lemons, with the Lisbon, Eureka and Genoa varieties being the predominant varieties marketed on a worldwide basis. Approximately 99% of the company’s lemon plantings are of the Lisbon, Eureka and Genoa varieties and approximately 1% are of other varieties such as sweet Meyer lemons and Proprietary Seedless lemons. California-grown lemons are available throughout the year, with peak production periods occurring from January through August. The storage life of fresh lemons generally ranges from one to 18 weeks, depending upon the maturity of the fruit, the growing methods used and the handling conditions in the distribution chain.
Avocados. The company is one of the largest avocado growers in the United States with approximately 1,400 acres of avocados planted throughout Ventura County.
California-grown avocados have peak production periods occurring between February and July. Because of superior eating quality, the Hass avocado has contributed greatly to the avocado’s growing popularity through its retail, restaurant and other food service uses. Approximately 95% of the company’s avocado plantings are of the Hass variety. The storage life of fresh avocados generally ranges from one to four weeks, depending upon the maturity of the fruit, the growing methods used and the handling conditions in the distribution chain.
Primarily related to differing soil conditions, the care of avocado trees is intensive. The need for more production per acre to compete with foreign sources of supply has required the company to take an important lead in the practice of dense planting (typically four times the number of avocado trees per acre versus traditional avocado plantings) and mulching composition to help trees acclimate under conditions that more closely resemble those found in the tropics, a better climate for avocado growth.
Other Agribusiness. The company has approximately 100 acres of oranges planted near La Serena, Chile, and 400 acres of wine grapes planted in San Luis Obispo County, California. The company markets its wine grapes utilizing processors that are not members of agricultural cooperatives. The company’s wine grapes are harvested and sold to various wine producers. Additionally, the company provides farm management services, which include farming, management and operations services mainly related to the Northern Properties.
Plantings
The company has agricultural plantings on properties located in the United States, Chile and Argentina.
The Limoneira/Olivelands Ranch is the original site of the company. The company’s headquarters, lemon packing operations and storage facilities are located on this property.
Other acres in the table above includes corporate and lemon packing facilities, land leased to other agricultural businesses, rental units, roads, creeks, hillsides and other open land.
Lemon Packing and Sales
The company is one of the oldest continuous lemon packing operations in North America. The company packs and sells lemons grown by the company, as well as lemons grown by others, the operations of which are included in the company’s financial statements under the lemon packing segment. Lemons delivered to the company’s packinghouses in Santa Paula, California and Yuma, Arizona are sized, graded, cooled, ripened and packed for delivery to customers.
A significant portion of the costs related to the company’s lemon packing operation is fixed. The company’s strategy for growing the profitability of its lemon packing operations calls for optimizing the percentage of a crop that goes to the fresh market, or fresh utilization, and procuring a larger percentage of the California and Arizona lemon crop.
Rental Operations Summary
The company’s rental operations include its residential and commercial rentals, leased land operations and organic recycling.
The company owns and maintains 240 residential housing units located in Ventura County in California that the company lease to employees, former employees and outside tenants. The company also owns several commercial office buildings. As of October 31, 2024, the company leased approximately 300 acres of its land to third-party agricultural tenants who grow a variety of row crops. The company’s leased land business provides the company with a profitable method to diversify the use of its land. The company also partners with one of its tenants and have an organic recycling facility on the company’s land in Ventura County. Effective November 1, 2021, the company leases its 1,200-acre Santa Clara ranch in Argentina.
Real Estate Development Summary
The company invests in real estate investment projects and recognize that long-term strategies are required for successful real estate development activities.
The company is making strategic real estate investments in California agricultural and developable real estate. The company’s real estate developments include developable land parcels, multi-family housing and single-family homes with approximately 800 units in various stages of planning and development. The following is a summary of each of the strategic real estate investment properties in which the company owns an interest:
East Area I - Santa Paula, California. East Area I consists of approximately 500 acres that the company historically used as agricultural land and is located in Santa Paula approximately ten miles from the City of Ventura and the Pacific Ocean. East Area I is the location for the company’s master planned community of commercial and residential properties, named Harvest at Limoneira, designed to satisfy expected demand in a region that will have few other developments in this coming decade.
In November 2015, the company entered into a joint venture with the Lewis Group of Companies (‘Lewis’) for the residential development of the company’s East Area I real estate development project. To consummate the transaction, the company formed LLCB as the development entity, contributed the company’s East Area I property to the joint venture and sold a 50% interest in the joint venture to Lewis for $20.0 million. The first phase of the project broke ground to commence mass grading in November 2017. Approved project plans include approximately 2,050 residential units and site improvements. A total of 1,261 residential units have closed from the project’s inception to October 31, 2024.
In October 2022, the company entered into another joint venture with Lewis for the development of the company’s 17-acre East Area I Retained Property (‘Retained Property’), which is located within the East Area I property. The company formed LLCB II, LLC as the development entity, contributed the company’s Retained Property to the joint venture and sold a 50% interest to Lewis.
East Area II - Santa Paula, California. The company’s design associates and the company is in the process of formulating plans for East Area II, a parcel of approximately 30 acres adjacent to East Area I. In July 2021, the company entered into a non-binding letter of intent to sell approximately 25 acres of the company’s East Area II property in five staged purchases to an investment company for the purpose of constructing a medical campus consisting of medical office buildings and an acute care hospital. Completion of the transaction is subject to the execution of a purchase and sale agreement and resolution of certain contingencies.
Santa Maria - Santa Barbara County, California. In fiscal year 2020, the company entered into an agreement to sell the company’s Sevilla property, which closed in the first quarter of fiscal year 2023.
Business Strategy
The company is an agribusiness and real estate development company that generates revenue and annual cash flows to support investments in agricultural efficiencies and real estate development activities.
The following describes the key elements of the company’s business strategy.
Agribusiness
With respect to the company’s agribusiness operations, key elements of the company’s strategy are:
Expand the company’s One World of Citrus asset-lighter business model in three main channels:
Growing, packing, marketing and distributing fruit grown on the company’s properties;
Utilizing third-party grower fruit by packing, marketing and distributing their fruit through Limoneira channels; and
Marketing and distributing brokered fruit.
Expand the company’s Sources of Lemon Supply. Peak lemon production occurs at different times of the year depending on geographic region. In addition to the company’s lemon production in California and Arizona and lemons the company acquires from domestic third-party growers and suppliers, the company has expanded its lemon supply sources to international markets such as Mexico, Chile and Argentina. Increases in lemons procured from third-party growers and suppliers and international sources improve the company’s ability to provide its customers with fresh lemons throughout the year.
Increase the Volume of the company’s Lemon Packing Operations. The company continually seeks to acquire additional lemons from third-party growers and suppliers to pack through the company’s packing facilities.
Expand the company’s Plantings of Avocados. The company’s plantings of avocados have been profitable and historically have been pursued to diversify the company’s product line. The company plans to expand its avocado production by 1,000 acres through fiscal year 2027 to capitalize on robust consumer demand trends.
Expand International Sales and Marketing of Lemons. The company has approximately 15% of the fresh lemon market in the United States and a larger share of the United States lemon export market. The company has the ability to supply a wide range of customers and markets, and because the company produces high quality lemons, the company can export its lemons to international customers, which many of the company’s competitors are unable to supply.
Other Operations
With respect to the company’s rental operations and real estate development activities, key elements of the company’s strategy include the following:
Rental and Housing Units. The company’s housing, commercial and land rental operations provide the company with a consistent, dependable source of cash flow that helps to fund the company’s overall activities.
Opportunistically Lease Land to Third-Party Crop Farmers. The company regularly monitors the profitability of its fruit-producing acreage to ensure acceptable per acre returns.
Selectively and Responsibly Develop the company’s Agricultural Land. The company recognizes that long-term strategies are required for successful real estate development activities.
Customers
The company markets and sells its lemons directly to the company’s food service, wholesale and retail customers in the United States, Canada, Asia, and certain other international markets. The company sold lemons and other citrus to 194 U.S. and international customers during fiscal year 2024. The company sells its avocados to third-party packinghouses and the company’s wine grapes to wine producers.
Intellectual Property
The material brands of Limoneira lemons include, but are not limited to, One World of Citrus, Santa, Paula, Bridal Veil, Fountain, Golden Bowl and Level. These trademarks are owned by the company and registered with the United States Patent and Trademark Office. The company also acquired certain lemon brands with acquisitions, including Kiva, Kachina, Oxnard Lemon and Trapani Fresh.
Seasonal Nature of Business
As with any agribusiness enterprise, the company’s agribusiness operations are predominantly seasonal in nature. The harvest and sale of the company’s lemons, avocados and oranges occurs in all quarters, but is generally more concentrated during the company’s third quarter (year ended October 2024). The company’s lemons are generally grown and marketed throughout the year, the company’s avocados are primarily sold from January through August and the company’s wine grapes are primarily sold in September and October.
Environmental and Regulatory Matters
The company’s agribusiness and real estate development divisions are subject to a broad range of evolving federal, state and local environmental laws and regulations. For example, the growing, packing, storing and distributing of the company’s products is extensively regulated by various federal and state agencies. The California State Department of Food and Agriculture oversees the company’s packing and processing of lemons and conducts tests for fruit quality and packaging standards. The company is also subject to laws and regulations that govern the use of pesticides and other potentially hazardous substances and the treatment, handling, storage and disposal of materials and waste and the remediation of contaminated properties. Advertising of the company’s products is subject to regulation by the Federal Trade Commission and the company’s operations are subject to certain health and safety regulations, including those issued under the Occupational Safety and Health Act.
History
Limoneira Company was founded in 1893. The company was incorporated in Delaware in 1990.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
