(July 7) New Jersey-based greenhouse vegetable grower-marketer Village Farms LP appears likely to double, as well as diversify, its product volume at the expense of B.C. Hot House Foods Inc.

Eatontown, N.J.-based Village Farms said July 3 it had signed a letter of intent to acquire Vancouver, British Columbia-based Hot House Growers, which this year will account for 35% of the volume of Surrey, British Columbia-based marketing cooperative B.C. Hot House.

The deal offers Village Farms, an 18-year-old company that already owns 100 acres of greenhouse operations in Pennsylvania and Texas, a chance to expand its distribution and build awareness for its Village Farms label, said Michael DeGiglio, the company’s chief executive officer.

“It’s just imperative that we have very solid year-round availability at a very decent capacity level to service our customers,” DeGiglio said.

The buyout also gives Village Farms, which has marketing agreements with several greenhouse operations in Mexico, a presence in all three North American Free Trade Agreement member countries, DeGiglio added.

“We market for a number of companies in Mexico that produce predominantly in the winter, so, matching the complementary production cycles is one important aspect of it, and not just in tomatoes but in the other products, as well.”

Village Farms has specialized in beefsteak, cherry and on-the-vine tomatoes, whereas Hot House Growers adds cucumbers and peppers to the product mix, DeGiglio said.

“Of course, it’s important diversifying the product line because as it gets more competitive, you have to really look at your operating efficiencies, including logistics, shelf life, how quick can you get the product to the end user,” he said.

The deal, which DeGiglio said likely would close by the end of the year, would double Village Farms’ production volume from its current range of 90 million to 100 million pounds.

It also will add 136 acres, more than doubling Village Farms’ production facilities.

It also will leave a void in B.C. Hot House’s production volume, but not for long, said Dawn Gray, that company’s executive vice president of sales and marketing.

“They were about 35% of the volume in 2006, so obviously, yes, the goal is to replace that volume with products in British Columbia, Ontario and Mexico,” Gray said. “Our attitude is to go forward as if it is going to happen and we’re looking to replace that volume, obviously, for the 2007 season.”

Short-term, there will be no negative effects, Gray added.

“They’re with us until the end of 2006,” she said. “We will go forward with the assumption that the acquisition by Village Farms will be successful, although I’ll tell you that, on average, 70% of these things don’t actually come together.”

The departure of Hot House Growers is not a reflection on its relationship with B.C. Hot House, Gray said.