Davis, CA and Modesto, CA – February 17, 2011 – The Central Valley Fund, a private investment fund focused on middle market Central Valley companies, today announced a preferred stock investment of $3.5 million in Paleteria La Michoacana, LLC (“PLM” or the “Company”). The capital will be used to support management as it continues to capitalize on growing demand across a wide variety of food and grocery retailers for its uniquely flavored Mexican-style frozen novelties and related ice cream products.
Founded in 1991, the Company’s roots trace back to a modest manufacturing facility in Turlock, CA. The central product then and now in the Company’s growth is its paleta, an all-natural ice cream bar with higher butterfat content than many other well-known novelty offerings. These bars come in traditional, Hispanic-oriented flavors, as well as those designed to appeal to a broader consumer set, including Coconut, Arroz con Leche (Rice Pudding), Guava, Walnut, and Cookies n’ Cream.
Ignacio Gutierrez and his wife, Patricia, have successfully built the Company over its twenty-year history into a premier ice cream manufacturer and marketer by focusing on producing high-quality paletasand complementary products such as containers of ice cream. Beginning with Hispanic-oriented grocery stores in the Central Valley, PLM’s direct-to-store and third-party distribution network now covers both local and mainstream grocers and warehouse club stores in California, the InterMountain West region and Texas.
According to the International Ice Cream Association, sales of ice cream and related frozen desserts were over $21 billion in the U.S. in 2008. Segmenting the market further, supermarket sales (excluding convenience stores, big-box retailers, etc.) of frozen novelty products accounted for approximately $2.4 billion of the “at home” total, up approximately 1.6% versus the prior year, providing the Company with a positive tailwind to continue to increase year over year sales.
Jose Blanco, a partner with CVF, emphasized, “We are impressed by management’s ability to cater to its primary customer base, the Hispanic consumer, while capturing other markets due to the strong crossover appeal of the Company’s products. We will support management at all levels as they continue to expand and refine their marketing and distribution infrastructure in order to execute on existing and new market opportunities.”
Ignacio Gutierrez, Founder and Chief Executive Officer, stated, “As a husband and wife team that lives and breathes our business, we believe CVF to be an important resource as we guide the Company through its growth plans. We are looking forward to having CVF as both a financial and strategic partner.”
About The Central Valley Fund
The Central Valley Fund was established by the principals of Gael Partners, LLC to finance later stage growth through mezzanine and preferred equity investments. The fund has offices in Davis, CA and Fresno, CA; it is focused on making investments in California’s Central Valley and throughout the state. For more information, please visit www.centralvalleyfund.com.
About Paleteria La Michoacana
Paleteria La Michoacana is a leading producer, marketer and distributor of premium ice cream and other fine desserts. The Company is known for its fine quality and methods used to produce its paletas, using natural fruits and ingredients of the highest quality. For more information, please visit http://www.ytupaleta.com.