Published on June 30, 2021

AgroFresh Solutions is an innovator in advanced proprietary technologies that enhance the freshness, quality, and value of fresh produce.

The company’s products are based on 1-MCP technology, a chemical that blocks the ethylene receptors in plant cells and temporarily delays the ripening process. The primary application of the 1-MCP technology has been in preserving apples during the storage and transportation process. AgroFresh maintains an 80% market share in preserving apples through 1-MCP technology, which makes up 60% of the company’s revenue. AgroFresh continues to diversify its revenue away from apples through applications for additional fruits and vegetables, including pears, plums, avocados, bananas, and broccoli. The company has also developed technology that helps farmers better manage harvest decisions and plant-based edible coatings that allow produce to stay fresher longer at retail.

Currently 45% of all produce grown goes to waste, and food waste makes up about 8% of all greenhouse gas emissions. In 2015, the United Nations General Assembly adopted the 2030 Agenda for Sustainable Development, which calls for a 50% reduction in food waste at the retail level and reduction of food losses throughout the supply chain. AgroFresh’s products are all natural, create value for its customers, and benefit the environment. Packers that use the AgroFresh 1-MCP product for apples experience a 6% increase in ROI; that value extends to retailers, who see 12% higher sales volume and 25% less spoilage. The increased supply of fresh apples allows domestic growers to meet most of the demand for apples, reducing the need for carbon-intensive imports. Since the company was founded in 2002, AgroFresh’s technology has allowed over 8 billion pounds of apples to be sold rather than processed and an additional 500,000 pounds to be sold at retail rather than sent to a landfill. The company estimates that its products reduce over 800,000 tons of CO2 emissions annually, the equivalent of the emissions of 170,000 cars. AgroFresh’s efforts to reduce CO2 emissions also extend to its internal operations. For example, the company’s European headquarters in Valencia, Spain reduced its emissions by 78,000 pounds through an agricultural packaging recycling initiative.

Agrochemical products are highly regulated by governmental agencies and, while there is consensus on the data needed to determine the safety of agrochemical products, each country has its own legislative process and specific requirements to determine if a product can earn registration for commercial use. AgroFresh has completed more than 400 international health and environmental tests to show its products are safe for consumers, workers, and the environment. The company has been granted over 500 patents in over 30 countries, and its products have been approved for use in over 50 countries. AgroFresh invests extensively in research and development to ensure the development of new innovative products while maintaining regulatory compliance.

AgroFresh’s commitment to sustainability and its asset-light business model have enabled the company to maintain EBITDA margins above 30% and generate strong free cash flow. The company’s focus on sustainable solutions has also been independently recognized; AgroFresh recently received the Overall Food Quality Solution of the Year Award at the inaugural AgTech Breakthrough Awards. The company was commended for its unparalleled portfolio of solutions designed to help maintain freshness, reduce food waste, and maximize sustainable resources throughout the supply chain.

Marcus Moore

Assistant Portfolio Manager

Written by

Marcus Moore

Assistant Portfolio Manager

Marcus Moore

Assistant Portfolio Manager

Marcus Moore joined Osterweis Capital Management in 2022 as part of the Zeo Capital Advisors team transition, where he was an Assistant Portfolio Manager focused on credit research, including sustainability analysis. Before joining Zeo in 2019, Mr. Moore worked at Wells Fargo Bank for 14 years as an Analyst within Principal Investing, responsible for the retail, consumer, and gaming sectors across various asset classes including high yield bonds, leveraged loans, and structured products. Prior to working at Wells Fargo, Mr. Moore worked at Edison Mission Energy as an analyst and at Hamilton Resources, Procter & Gamble, and Goldman Sachs.

Mr. Moore is an Assistant Portfolio Manager for the sustainable credit strategies.

Mr. Moore graduated from Morgan State University in Baltimore, MD (B.S. in Accounting) and from the University of California, Los Angeles Anderson School with an M.B.A. He also holds the CPA designation.

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Past performance does not guarantee future results. This company was not selected for performance-based reasons, and was instead selected to emphasize the types of issuers that the Osterweis Sustainable Credit Team seeks to invest in based on its sustainability mandate.

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