- May 22, 2025
-
-
Loading
Loading
Two and half years before Alico Inc. announced it was getting out of the citrus business, the company knew it had to make a change.
Production was dropping fast, and the citrus industry was no longer viable. The Fort Myers company, a statewide leader in citrus production for 120 years, needed to do something different.
So Alico officials began working on a plan that would allow the company to focus on the new reality by transforming itself from a business that largely relied on fruit grown in groves to a diversified land company.
“We’re an agribusiness," Alico president and CEO John Kiernan says, "but with an emphasis on the business.”
While Alico has publicly discussed its decision to exit citrus production and its shift to focus on its land holdings, Kiernan and executive vice president of real estate Mitch Hutchcraft spoke in-depth about the company’s thinking and future at a May 13 Real Estate Investment Society luncheon in Fort Myers.
(The company issued its second quarter earnings report a few hours later that day.)
Even though the news of its transformation was only made public Jan. 6, the plan to become a diversified land company had been quietly in the works for some time, the executives say.
That includes beginning to work internally two years ago on the early stages of its most high-profile project as it exits citrus production: Corkscrew Grove Village, a 4,660-acre master planned community in northwest Collier County.
“This isn’t just a flash in the pan (because) we have nothing else to do,” Kiernan says, adding that “we started to invest capital into our real estate entitlement programs about 2 to 2 1/2 years ago.”
As it began its transformation, Alico hired Hutchcraft, creating a new position for him — executive vice president of real estate — and charged him with looking at the long-term potential for the company’s real estate holdings.
Before Alico, he was the vice president of real estate at King Ranch, a 824,000-acre Texas cattle ranch.
Hutchcraft’s hiring was announced May 28, 2024. The company said in a statement at the time that it was committed to remaining the state’s largest citrus grower.
It also said Alico “believes it is prudent and necessary to continuously evaluate its entire real estate portfolio to determine the potential for the highest and best use of each acre it owns.”
Hutchcraft, though, says he saw the job in simpler terms.
“One of the first things that John said to me when I got here was, ‘Let's make sure that we do this right.’”
What emerged from the two years of groundwork is called a Plan for Every Acre that makes maximizing value creation the priority by finding the highest and best use for properties.
According to the May 13 presentation at the luncheon, Alico owns 53,371 acres of land in 31 locations across eight counties.
Kiernan says the plan calls for 75% of the land it owns, about 40,700 acres, to remain in agriculture with the other 25% having development potential. Of that, 10%, about 5,500 acres, is to be developed within the next five years and 15%, about 7,100 acres, will be developed following that.
Alico says thus far in fiscal 2025 it has been able to complete about $20 million in land sales. Those sales, coupled with the 2024-2025 harvest, will fund the company through fiscal 2027.
The company, in its May 13 earnings report, says the process to become a diversified land company is already showing positive results, exceeding its goals for the fiscal year.
It is “forecasting that our cash balance at the end of this fiscal year will be approximately $25 million, and our net debt will be approximately $60 million with only the required $2.5 million balance outstanding under our revolving line of credit.”
And the company says land sales could top $50 million this year.
As for the wind down of its citrus operations, Kiernan told investors Alico completed its last major citrus harvest in April and will conduct a final harvest on the majority of the 3,783 acres of remaining operational citrus groves in fiscal year 2026.
It has also negotiated leases on 5,250 acres to third party growers and is having conversations — or has contracts in place — with other growers who are clearing up to 1,000 acres in lieu of lease payments.
Speaking at the luncheon, Kiernan says “winding down our citrus operations…allowed us flexibility to sustain the business going forward and to really reevaluate acre by acre and helps us identify that about 25% of all those acres have a potential for something other than agriculture.”
Alico Inc.’s total operating revenue for the three months ending March 31 was $17.98 million, down 0.7% from $18.11 million for the same time period a year ago.
