Activa Capital, a Paris-based private equity firm, has bought 50% of the stock of organic fruit and vegetable supplier Pro Natura.
 
The capital injection from the buy-out will be used by Pro Natura for strategic growth. Apart from internal development such as investing in new subsidiaries, the company is looking at possible acquisition targets, according to Organic Monitor.

Pro Natura was founded in 1987 and has grown to become one of the leading traders of organic fruit and vegetables in Europe. Apart from its French operations in Cavaillon and Brittany, the company has subsidiaries in Morocco and West Africa. Sourcing is a major strength of the company with organic fresh produce imported from five continents. Pro Natura's sales are projected to reach €37m (US$44.4m) in 2005.

Organic Monitor described the deal as an important development that will strengthen Pro Natura's position in an increasingly challenging market.

The European organic fruit and vegetables market has traditionally been highly fragmented with local supply chains between producers and small retailers. The competitive landscape has changed with major retailers wielding increasing influence. Most organic fruit and vegetable sales are now from supermarkets, which are encouraging conventional fruit and vegetable companies to enter the organic sector. European retailers prefer to use the same companies for organic and conventional products where possible.

The growing power of the supermarkets and emergence of large fresh produce companies is leading to consolidation in the organic sector. Consolidation is likely to continue as the European market becomes more competitive. Whilst other companies grapple with changing market conditions, Pro Natura's capital injection is likely to ensure that it remains a frontrunner.

Organic Monitor's report on the European Market for Organic Fruit & Vegetables is available in the just-food research store.