Close Ad

The Spoon

Daily news and analysis about the food tech revolution

AppHarvest

High Tech Farmer AppHarvest is Rapidly Running Out of Money

Kentucky-based controlled environmental agriculture company AppHarvest has warned in its latest financial report that it only has enough capital to continue operations into the first quarter of 2023.

According to its quarterly report filed on November 7th, the company says there is “substantial doubt” about its ability to continue as a going concern unless it can raise additional outside capital.

As of September 30, 2022, we had $36.2 million of cash on hand, and an accumulated deficit of $270.6 million. In October 2022, we entered into a $30.0 million note and loan agreement with Mastronardi Produce-USA, Inc. (“Mastronardi USA”) and received $15.0 million upon execution. In November 2022, we initiated a third restructuring plan to further reduce operating costs and our losses. Despite these actions, management believes there is substantial doubt about our ability to continue as a going concern and absent additional sources of financing, we expect that our existing cash and cash equivalents will only allow us to continue our planned operations into the first quarter of 2023

According to a story in the Kentucky Herald-Leader, the company needs $85 to $95 million in cash to fund operations for the next 12 months. That’s a lot of new capital in a market where raising new money has become increasingly difficult.

AppHarvest is looking at a few strategic options, including selling Berea farm to its primary distribution partner  Mastronardi Produce Limited (the same company it borrowed funding from to launch the first 5 acres this past month). They are also talking with potential acquirers according to AppHarvest CEO Jonathan Webb.

“There are large conglomerates in auto manufacturing,” Webb told the Lexington Herald Leader. “I mean, look at GM, for example, and all the different auto brands inside of GM. So yeah, we’re actively having conversations with CEOs, with investors, with partners, with anyone who wants to partner with us here in Kentucky and to help make our mission succeed.”

The company’s current situation is a far cry from its early days when it was seen as one of the brightest lights of the CEA farming world. And while the company’s massive capital needs show a potential downside of building automated indoor farms – especially compared with more traditional farms that take significantly less capital to build and run – it’s worth pointing out other high-tech indoor farmers like AeroFarms and Bowery are continuing to thrive and find new partners.

As we wrote a couple weeks ago, the company’s new farm in Berea is impressive to watch in action and will no doubt produce a whole bunch of salad kits once the full 15 acres is operational. Let’s just hope the company can survive long enough to see it come to fruition.

Watch as AppHarvest’s Automated Indoor Farm Takes Produce From Pre-Seed to Packaging

Even if you’re aware of controlled environment agriculture, a tech-forward approach to indoor farming that can include techniques such as hydroponics, aquaponics, vertical farming, automation, and more, chances are you haven’t seen a CEA system take a plant from seed to packaging.

Well, today’s your lucky day because we have a video from AppHarvest showing the different stages, from seeding to harvesting to putting it all in a package. The new 4-minute-plus video is a simple b-roll that came to us from AppHarvest as part of the news announcement about their new indoor salad greens farm in Berea, Kentucky.

According to the announcement, the new farm features a touchless growing system that automates the entire lifecycle from pre-seeding to packaging and also includes onsite washing for produce that goes into washed-and-ready-to-eat salad packs. AppHarvest says the new farm can grow about 35 million lettuce plants at a time, going from seed to maturity in about three to four weeks, depending on the variety. That equates to about half a billion lettuce plants produced per year.

AppHarvest built the new facility in partnership with Mastronardi Produce, a company that sells produce such as tomatoes, berries, and salad kits at retail, who provided $30 million in debt financing to AppHarvest to build out the new facility.

You can watch the entire video below or skip to certain portions on Youtube, including harvesting, washing, or packaging.

Watch a completely automated precision farm from seeding to harvesting to packaging.

According to AppHarvest, 5 acres of the new farm is currently operational, and shipping produce. They plan for the new facility to be a total of 15 acres when completed. The company plans to open a 30-acre berry farm in Somerset Kentucky in the next few weeks, a farm which they built using $50 million in USDA-secured debt.

While the new facilities may pump out a whole bunch of produce compared to traditional outdoor acreage, the total number of CEA farms is just a drop in the bucket when compared to the 900 thousand traditional-ag acres there are in the US. According to AppHarvest, the US only has about 6 thousand CEA farm acres, compared with over half a million in Europe.

AppHarvest Gets $91M in New Financing for Its High-Tech Indoor Farms

AppHarvest this week announced a $91 million financing arrangement with Equillibrium Capital, according to Food Navigator, who broke the news. The money will go towards AppHarvest’s previously stated goal of building out 12 high-tech indoor farming facilities by 2025.

Equilibrium Capital’s $91 million figure is a construction loan that will support the building of AppHarvest’s forthcoming 60-acre facility in Richmond, Kentucky. The Richmond location is almost identical to the company’s 60-acre high-tech greenhouse in Morehead, Kentucky, which is already operational and shipping different varieties of tomato to grocery retailers within a day’s drive. 

Three more farms in Kentucky are already under construction, too: two 15-acre facilities that will grow leafy greens in Berea and Morehead, respectively, and a 30-acre facility in Somerset for growing strawberries. 

The farms use or will use a mix of hydroponics, sensors, supplemental LED lighting, automation and AI as well as natural inputs like sunlight and rainwater to grow produce. AppHarvest is also adding more technology to its operations. It acquired harvesting robot startup Root AI in April of this year for $60 million, and CTO Josh Lessing (formerly the CEO of Root AI) has said AppHarvest is investing in robotics, artificial intelligence, teleoperation, and proprietary seed genetics. Its intelligent robot, Virgo, for example, is currently learning to manage crops and make decisions about growing decisions. All that tech, of course, means more data that has the potential to improve growing processes, crop yield, and food quality.

AppHarvest went public earlier this year via a SPAC merger with Novus Capital Corp for $475 million.

How AppHarvest Is Investing in the First Generation of High-Tech Farmers

Agriculture may have been slower to digitize than other parts of the food sector, but these days a lot of folks would agree artificial intelligence, automation, and other technologies have a role to play in the future of farming. The presence of such things means farming will soon require lots of new skills, which in turn means training a whole new generation on a whole new set of tools. It means, in the words of AppHarvest’s founder and CEO Jonathan Webb (pictured above), “getting young people to really visualize what agriculture is” in a way they haven’t before.

Standing under a tent in the middle of a downpour outside Elliott County High School in Sandy Hook, Kentucky recently, Webb explained to me how his company is training the next generation of farmers while simultaneously investing in the company’s own future as a high-tech agricultural powerhouse.

We, along with with students, parents, teachers, and Kentucky governor Andy Beshear, were at the launch for the latest unit of AppHarvest’s high-tech educational container farm program, which teaches high-tech farming to Eastern Kentucky high-school students. Launched back in 2018, the program retrofits old shipping containers to house controlled-environment vertical farms that grow leafy greens. Farms at each school serve as hands-on agricultural classrooms where students can learn not just horticulture but also how to use the technologies powering the next wave of farming innovations around automation, connectivity, and data.

“What we’re doing here is trying to plant the seeds of what it means to be in an exciting industry and get that groundswell early,” Webb told me. 

He was talking specifically about the container farm program but might as well have been referring to the entire company’s MO. AppHarvest, itself a product of Eastern Kentucky, is both a Public Benefit Corporation and a Certified B Corporation, which means the company has to strike a balance between profit and less measurable purposes like environmental impact, transparency, and social good. 

The company’s main business is headquartered about an hour away from Elliott County High School, in Morehead, Kentucky, where AppHarvest operates a 60-acre high-tech greenhouse that grows different varieties of tomatoes. Two additional farms, one for leafy greens and another for tomatoes, are under construction, and the company just broke ground on a couple more last month. All of these farms provide or will provide produce for restaurants and grocery retailers within a day’s drive. They will also provide jobs for a local community that’s seen unemployment rise as the coal industry declines.

The high school container farms are altogether smaller and somewhat different in terms setup and technical specs, but the idea is the same: grow crops in a controlled environment and use technology to improve plant yield, quality, and nutrition profile. In doing so, people from the community get an opportunity to learn the kinds of skills that will be relevant as agriculture gets more and more digitized.

“We’ve tried to say at AppHarvest we’re not building facilities, we’re building an ecosystem,” said Webb. “Obviously our large production facility is the core critical center piece of that, but us investing in a high school education, we’re truly trying to create an ecosystem that includes facilities and the brainpower to be able to operate the facilities.”

This isn’t just feel-good talk, either. Technologies like artificial intelligence, robotics, sensors, and analytics are coming to agriculture in response to multiple problems looming in the near future for the global food system. As McKinsey notes, “Demand for food is growing at the same time the supply side faces constraints in land and farming inputs.” With a population expected to grow to 9.7 billion by 2050, the planet needs to produce around 70 percent more available calories. At the same time, inputs like water supply and arable land are shrinking, raising costs for farming and negatively impacting an already burdened planet.

Part of the promise of controlled environment agriculture formats like high-tech greenhouses and container vertical farms is that they can grow more food faster, at a higher quality, and closer to the buying public. Many of these facilities operate via hydroponics systems that recirculate water, saving on that resource. (AppHarvest’s greenhouse runs off rainwater collected from the facility’s roof.) In the case of vertical farming, less land is required because plants are stacked. AppHarvest’s container farms, for example, can pack three to five acres of leafy greens into a forty-foot-long shipping container. Other large-scale vertical farms a la Kalera or Plenty are growing pounds of greens that number in the millions and also exploring additional crops such as berries.

Most individuals in this industry I’ve spoken to agree that indoor farming isn’t “the savior” that will wholly replace traditional agriculture. Nor was it never meant to be. Rather, greenhouse growers, vertical farm companies, and those operating container farms believe we need all of these formats working together and alongside traditional agriculture practices to try and resolve the above issues.

One of the many things needed to make that a reality is a new generation of young people interested in farming as a career and able to navigate the technical as well as horticultural aspects of agriculture. 

Right now, that’s a challenge. “We don’t have our brightest young people inspired to go into agriculture,” said Webb, adding that the issue is, “How do we inspire them early to get into agriculture and the technology sphere of agriculture?”

AppHarvest started investing in its education program before its main facility was ever complete, spending $200,000 of its initial $1 million investment on the program. “I’m not sure if there’s ever been a venture-backed company that’s taken 20 percent of their raised proceeds early and invested in education,” said Webb.

In 2021, AppHarvest has five different container farm programs operating at Eastern Kentucky high schools, all of them operating independently but also networked together, just as AppHarvest’s larger farms will eventually be networked. 

Students learn a huge range of skills working on these farms, from horticultural-related ones like seeding and harvesting to technology management across multiple farms to food safety, data entry, marketing, packaging, and creating a budget. Via a screen inside the farm, students can learn to track the pH levels of plants, carbon dioxide levels, temperature, humidity, and all the other variables present in a farm. And since farms from every high school are networked together, students can view one another’s activity. Elliott County High can see data from Shelby Valley High School in Pike County and vice versa, for example.

Webb says the farms are also an opportunity for schools and students to collaborate using different skillsets, whether technological, horticultural, or otherwise. “Some students might have more of a background or interest in horticulture. Some students might have more of a background or interest in craftsmanship. All we’re trying to do now is say, ‘Here, it’s your thing, bring it to life, and openly share information.’”

And while there’s no pressure, the hope is that some of these students eventually bring their skillsets to AppHarvest’s main operations and help improve them, along with indoor ag, over the coming years. “Hopefully in four years we have students that might end up at MIT. And then they’re telling us what to do,” said Webb, adding that the ROI here isn’t quick. The true impacts of the company’s investment in school programs probably won’t be seen for another five of six years, which is a few lifetimes when we’re talking about tech. 

“We get judged on quarterly earning calls, [but] that’s not the way I think,” he said. “I want us to think, first decade, second decade, third decade, and these are very long-term investments.”

He hopes to see more tech companies investing in high schools, and AppHarvest isn’t quite the lone wolf when it comes to this. Freight Farms, which deals exclusively in container farms, has a partnership with Sodexo to bring its units to K-12 schools and universities in the U.S. AeroFarms, also a Certified B Corp., has partnerships with various schools and community centers, too.

For AppHarvest, the educational program is is an integral part of the operation, and one tied to the company’s long-term success. “It’s not a ‘nice to have,'” Webb told me. “It’s something we truly believe is going to give our company a competitive advantage medium to long term.” 

A Peek Inside AppHarvest’s 60-Acre High-Tech Greenhouse in Eastern Kentucky

Ag tech company AppHarvest may only be a few years old, but growth for both the operation and its tomato crops moves at a breakneck pace these days. After shipping its first harvest to stores in late January of this year, AppHarvest proceeded to go public at the start of February and has since broken ground on two more farms, acquired a robotics company, and announced it will soon grow leafy greens and strawberries in addition to tomatoes. 

And while it’s one thing to say the Morehead, Kentucky-based company operates a 60-acre (2.76 million square feet) greenhouse powered by tech and a deep sense of purpose, it’s another thing to actually stand inside the facility and see the future of agriculture changing before one’s very eyes.  

I had the honor of doing just that at the end of last week, when I drove up to Morehead, Kentucky and took a tour of the facility, which literally stretches into the Appalachian horizon as far as the eye can see. Here’s a look at what goes on inside:

Tomatoes grow in long rows like above. AppHarvest trains these Tomatoes on the Vine (TOVs) to grow in clusters of five.

The greenhouse relies primarily on sunlight for plants. Supplemental lighting, hanging above the plants, can be used when sunlight is weak or when the company wants to speed up the growing time of crops. At night, a sheet automatically unrolls to cover the roof so that surrounding neighbors are not disturbed by the lights.  

Tomato roots inside the growth media block. Since the entire greenhouse is hydroponic, no soil is used in the grow process.

Nutrient-enriched water is pumped to the plants via a hydroponic drip system that can deliver precise levels to plants as they need it. 

Autonomous carts shuttle cases of tomatoes to the packing room once the fruit is harvested. 

A high-level (literally) view of the tomato plants. AppHarvest grows about 800,000 plants at once in its 60-acre facility. A forthcoming farm in Richmond, Kentucky, will be almost identical in terms of layout and the amount it can grow.

Reservoirs and a UV filtration system for the facility’s water supply. AppHarvest relies solely on rainwater collected on the building’s roof. Water is pumped from a retention pond into this room before being delivered to plants via drip irrigation. 

The packing room, where tomatoes are assessed and made ready to ship to grocery stores and restaurants. AppHarvest ships to those within a day’s drive, which the company says is about 70 percent of the U.S. population.

As mentioned above, AppHarvest plans to open an almost-identical facility outside of Richmond, Kentucky, and a 15-acre farm in Berea for growing leafy greens. The company said it plans to have 12 farms up and running by 2025. 

The CEA sector as a whole, meanwhile, is currently getting more investment than ever before as companies build out different versions of indoor farms. Modular vertical farms, warehouse-sized vertical farms, at-home farms, vertical greenhouses, and massive operations like those of AppHarvest are all promising solutions that can exist alongside traditional agriculture. The consensus from my visit to AppHarvest last week is that in order to improve the food system and feed a growing global population, we’re going to need all those methods in the future. 

In the meantime, AppHarvest’s TOVs and Beefsteak tomatoes are available at Walmart, Kroger, and Meijer stores in certain parts of the U.S.

CEA Grower Spread Says Its Vertical Farming Tech Is Ready for ‘Mass Production’ of Strawberries

Kyoto, Japan-based controlled environment agriculture (CEA) company Spread said this week it has developed technology that will let it mass-produce strawberries in a vertical farm setting.

Spread is “old guard” when it comes to indoor farming, having completed its first large-scale vertical farm in 2007. Since 2018, the company has also operated its Techno Farm, which uses robotics to automate much of the grow process for plants. Up to now, Spread has grown leafy greens inside these environments. And like a few others in the vertical farming space, the company is now applying its technology and learnings from that process to growing strawberries. 

Strawberries still top the Environmental Working Group’s “Dirty Dozen” list, which means they contain the highest levels pesticides of any fruit. They are also extremely perishable and prone to damage during the shipping distribution process. That makes farms like the ones Spread operates suitable grow environments, since vertical farms are inherently pest-free already and typically situated closer to consumers. Spread’s Techno Farm, for example, is located in Kansai Science City, which sits at the intersection of the Kyoto, Osaka, and Nara prefectures in western Japan.

Strawberries are in high-demand in Japan as in other parts of the world, and Spread joins companies like Plenty, Oishii, and AppHarvest have already said they are planning to grow the fruit in a CEA environment. Oishii also grows the über-premium Omakase berry — normally only available in a specific region of Japan for a short time — inside its facility. 

Spread said this week it is considering distribution of its strawberries to Europe and North America as well as Asia. The company is also working on grains, mushrooms, and other fruits as potential future crops on its farms. 

Q1 2021: AppHarvest Bets on Robots, Strawberries and More Data in the Greenhouse

Control ag company AppHarvest is adding more of both crop types and technologies to its budding greenhouse network, according to the company’s Q1 2021 earnings call this week. That includes strawberries, leafy greens, harvesting bots, and lots of data.

The company, which went public in February, is best known at this point for the 60-acre greenhouse facility it operates in Morehead, Kentucky, where it grows beefsteak tomatoes. AppHarvest sent out its first shipment of these tomatoes to grocery stores earlier this year. Customers now include Kroger and Wendy’s.

CEO Jonathan Webb said on the company’s earnings call this week that two more Kentucky greenhouses, one in Richmond and one in Berea, will be operational next year, and that with them, AppHarvest will start growing leafy greens and strawberries. Webb pointed out that while his company may have started with tomatoes — a fairly traditional crop when it comes to greenhouse growing — the eventual aim is to “grow the company into a trusted high-tech sustainable food company.”

As far as that tech goes, AppHarvest’s CTO Josh Lessing said on the investor call that the company is investing in “robotics, artificial intelligence, teleoperation, and proprietary seed genetics.” To date, its biggest move has been the acquisition of Root AI, a startup best known for its crop-harvesting bot Virgo. (Lessing was the cofounder and CEO of Root AI before the acquisition.)

“Presently, we are training our intelligent robot Virgo to manage crops and inform growing decisions,” Lessing said on the call, adding that Virgo could eventually be configured to harvest multiple different crops, including delicate ones like strawberries — hence the company’s announcement to move into the realm of berry growing. 

As a crop, strawberries are highly suited to the controlled-environment agriculture (CEA) realm because they are extremely delicate, perishable, and normally require boatloads of pesticides when grown outside. Moving the grow process indoors, to a fully controlled environment, means better protection for crops from weather hazards, no pests and therefore no need for pesticides, and more consistent temperatures and humidity levels that can ensure better-tasting plants with a more robust nutritional profile. 

Given the amount of sunlight strawberries need for optimal growing, greenhouse settings are obvious candidates, since they rely largely on the sun with only supplemental LEDs. However, vertical farms, which use LEDs to mimic the sun’s light spectrum, are also now growing strawberries. Plenty, Oishii, and SinGrow are just a few of the names on that list. Whether one method will wind up superior to the other will (among other things) depend on what the end product tastes like as well as how much it costs to grow, sell, and buy.

For AppHarvest, though, the real win with technology will be not so much about the crops it can grow but the data Virgo and other tools can collect. That data can in turn get analyzed and turned into actions and insights applicable across the AppHarvest greenhouse network. “Granular plant level data from each fruit means we can learn exactly how to optimize quality, production, sales and logistics,” said Lessing. “This foundation will give us the opportunity to restructure the world’s food supply in order to mirror the hyper efficient e-commerce landscape.”

Along those lines, the company will expand beyond these first three facilities in the future. Two more projects will be announced this summer and are slated to be operational in late 2022. Webb said on this week’s call the company is on track to operate 12 greenhouses by 2025. By then, one imagines those facilities will grow a whole lot more than greens, strawberries, and tomatoes.

AppHarvest Acquires Crop Harvesting Robot Startup Root AI for $60M

Controlled ag company AppHarvest announced today that it has acquired Root AI, a startup that makes AI-based robots for harvesting crops grown in indoor farms. According to the press announcement, AppHarvest is spending roughly $60 million to acquire Root AI, with $10 million in cash and the balance in AppHarvest common shares. Root AI had raised $9.5 million in funding.

Root AI makes Virgo, a universal harvester that can be configured to identify and harvest different crops such as tomatoes, peppers, cucumbers and strawberries. Virgo’s cameras use computer vision along with an infrared laser to create a 3D color scan of an area to determine what work the robot needs to perform.

For a crop like tomatoes, the system figures out the orientation of the fruit and determines if they are ripe enough to pick. Once it “sees” which tomatoes need to be picked, Virgo selects the most efficient route to picking the fruit and then sends a robotic arm and gripper to pluck the fruit.

Root AI - Going Cross-Crop

The acquisition makes sense for AppHarvest, which runs a 2.76 million square foot indoor farm in Morehead, Kentucky that is expected to produce roughly 45 million pounds of tomatoes each year. That facility uses an array of sensors, LEDs and other automated systems to control the entire growing process. Adding robotics harvesters to its stack seems like a logical next step for AppHarvest — particularly as the company is in the process of building out its network of farms. AppHarvest has two more farms currently under construction in Kentucky.

The company is also flush with cash, having went public via SPAC in February, giving it $435 million in “unrestricted cash” to run and grow its operations.

After the acquisition, Root AI’s 19 employees are expected to join AppHarvest, with Co-Founder and CEO Josh Lessing taking on the role of AppHarvest CTO, and Co-Founder Ryan Knopf joining as VP of technology.

AeroFarms to Go Public Via SPAC Deal

Large-scale vertical farming company AeroFarms announced today it will go public via a merger with special purpose acquisition company (SPAC) Spring Valley Acquisition Corp. Once the deal goes through, AeroFarms will become publicly traded on the Nasdaq under the ARFM ticker symbol. The combined company is expected to have an estimated equity value of about $1.2 billion.

Certified B Corporation AeroFarms also noted that the deal will help to fund things like expanding retail distribution, constructing additional farms, and further developing the technology that powers the company’s growing operations. 

Headquartered in Newark, New Jersey, AeroFarms grows leafy greens via indoor vertical farms that rely on LED light recipes, hydroponics, and software to grow plants. The company, which has raised $238 million to date, currently distributes products in the New York Metro Area as well as online via Whole Foods, FreshDirect, AmazonFresh, and Shop Rite.

The announcement comes not long after another controlled-environment agriculture company, AppHarvest, also went public via SPAC earlier this year. AppHarvest (also a Certified B Corp) completed a merger with Novus Capital Corp. and began trading on the Nasdaq on February 1. Its high-tech greenhouse model differs considerably from AeroFarms in terms of both the facility and the crops, but the end goal is similar — get pesticide-free, more locally grown produce to more people.

IPOs aside, it has been a busy month for the indoor farming space, with vertical farms Plenty and Bowery both expanding their retail footprint, Sweden’s Grönska raising $2.4 million, and Bablyon Microfarms closing a $3 million seed round.

AeroFarms said today that the merger has been approved by the Boards of Directors of both it and Spring Valley, and now just needs the approval of Spring Valley shareholders.  

AppHarvest Expected to Go Public Next Week via SPAC

AppHarvest’s expectation to go public is fast becoming a reality. The controlled agriculture company announced today that it is expected to complete its merger with Novus Capital Corp., a special purpose acquisition company, which will enable it to start publicly trading on the Nasdaq on Feb. 1.

Special purpose acquisition companies (SPACs), also called blank-check companies, often provide a faster IPO process for companies. AppHarvest first announced the deal with Novus just a few months ago, in Sept. 2020.

Since then, the four-year-old Morehead, Kentucky-based company has reached a few major milestones, including harvesting the first crop ever from its 60-acre indoor farm and starting construction on two additional farms in the Appalachian region. 

The company’s massive greenhouse facility runs off a mix of sensors, LED lighting, and hydroponics to grow produce 365 days per year. Because of the farm’s Eastern Kentucky location, abundant rainwater can be used to power the hydroponic system, minimizing resources used.

AppHarvest’s location also means it is within a day’s driving distance of about 70 percent of the U.S. population. This potentially vast reach combined with the growth possibilities an IPO can provide will help AppHarvest further realize its ambitions to make high-quality, pesticide-free produce available at a manageable price point to all Americans, not just the affluent ones.

The company sent its first shipment of beefsteak tomatoes to U.S. grocery stores last week. Meanwhile, AppHarvest said in a recent statement that it plans to construct more facilities across Kentucky and Central Appalachia, with the intent to be running 12 farms by 2025. The forthcoming IPO will undoubtedly aid in this process.

Controlled Ag Company AppHarvest’s First-Ever Crop Arrives at Grocery Stores This Week

Controlled environment farming company AppHarvest announced this week it has completed the first-ever harvest of its Morehead, Kentucky-based flagship indoor farm. The Beefsteak tomatoes harvested from the 60-acre farm will ship to grocery stores this week.

The Morehead, Kentucky indoor farm clocks in at about 2.76 million square feet, and AppHarvest says the facility is expected to produce about 45 million pounds of tomatoes annually. The farm uses a mix of sensors, LEDs, and other technologies to grow tomatoes inside a completely controlled environment. Unique among controlled ag operations, AppHarvest also runs almost entirely off rainwater, an element that Eastern Kentucky has in abundance. 

In addition to the Morehead facility, the company is also finishing construction on two more Kentucky farms: another 60-acre farm outside of Richmond and a 15-acre one for growing leafy greens in Berea. AppHarvest said in a statement that it plans to construct more facilities across Kentucky and Central Appalachia, with the intent to be running 12 farms by 2025.

The focus on Appalachia is a crucial part of AppHarvest’s expansion strategy as it builds out its high-tech greenhouses. Thanks to the continued decline of the coal mining industry, the region’s economy has been hit hard, to put it lightly. AppHarvest’s growing presence in Appalachia has already created jobs and livelihoods for residents of surrounding communities. “What we’re able to do here and how quickly we’re able to move and how much communities want us to be here on the ground, you can’t put that in a pitch deck or capture it in financial means,” AppHarvest’s founder and CEO, Jonathan Webb, told me last year.

The Morehead facility is also within a day’s driving distance of 70 percent of the U.S. population, which means AppHarvest’s tomatoes, and whatever else the company plans to grow in future, will reach an extremely wide audience.

To start, the newly harvested Beefsteak tomatoes will be available at select locations of national grocery chains like Kroger, Publix, Walmart, Food City, and Meijer. Tomatoes will be available in the produce section of these stores, cobranded with produce company Sunset Grown. AppHarvest said the tomatoes would be “comparable in price to standard tomatoes.”

The milestone comes just as AppHarvest, which raised $28 million in August 2020, plans to go public via a merger with a SPAC called Novus Capital Corp. 

‘Great Challenge Can Expose Great Opportunity’: AppHarvest’s Jonathan Webb on the Role of Indoor Ag

For AppHarvest founder and CEO Jonathan Webb, the role of the high-tech greenhouse goes far beyond providing produce to surrounding locales. Over the phone recently, he went into great detail about his company’s role in not just growing plants but also in providing jobs and morale for the community and playing a part in the solution to some of the agricultural industry’s most pressing global issues.

As a company, AppHarvest, based in Morehead, Kentucky, is only a few years old. But since its inception in 2017, it has moved quickly to make good on its mission of build a network of high-tech, controlled-environment farms that can grow non-GMO, chemical-free produce and at the same time help create a more resilient economy for Appalachia.

The year 2020 has been especially eventful for the company, which raised $28 million in August and finished building out its 2.76 million-square foot flagship facility a few months ago. When we spoke on the phone, AppHarvest had just completed planting of its first crop of tomatoes. It has also broken ground on two additional farms in Kentucky, a 60-acre one in Madison for fruits and vegetables and a 15-acre facility for leafy greens in Berea. Earlier in 2020, it also announced a partnership with the Dutch government as well as multiple universities to bring more research and education on controlled ag into the area and effectively turn Appalachia into an agtech powerhouse. 

Technology is an important part of the plan, and AppHarvest employs it in its greenhouses to grow crops all year and use substantially fewer resources in the process. The company doesn’t build its own technology. Rather, it uses existing technologies on the market that, when put together, amount to a more efficient grow system in terms of both crop yield and cost. Webb cites AppHarvest’s use of Philips GreenPower LEDs, which improve climate and crop control in greenhouses, as one example. 

“There [are] a lot of great technologies that are cutting edge and available and we can use them to be better aligned with nature,” he says, adding that AppHarvest is “trying to use proven technologies that are at the cutting edge without jumping over the edge.”

What is unique to AppHarvest’s approach is its rainwater system. Eastern Kentucky gets abundant amounts of rainfall, which AppHarvest captures and uses for its hydroponic system. This has a distinct advantage over using groundwater, since the latter contains sodium, which leads to agricultural runoff and the need for a system to be periodically flushed. AppHarvest’s greenhouse runs entirely off this rainwater. Webb says that to his knowledge, no other controlled ag system of this size in the world does that.

Webb is quick to point out that AppHarvest’s operations are more than a matter of steel and glass structures and hydroponics systems. “We’re trying to build an ecosystem,” he tells me. That’s one reason AppHarvest is locating its facilities near universities, with which the company can have a knowledge-sharing relationship. 

Even more important is the impact AppHarvest’s work has on the surrounding communities. Morehead sits in the foothills of the Appalachian Mountains, and is in an area that has for generations relied on the coal mining industry for jobs. Coal mining has been in decline for years, a situation further accelerated by the COVID-19 pandemic. As of May 2020, there were more coal industry mine closures and job losses than at any point since the presidency of Dwight Eisenhower 60 years ago.

“Many of us knew what was happening with the decline of the coal industry,” says Webb, a Kentucky native. He adds that the “vacuum that was created because of the rapid decline of the coal industry was a big reason as to why we looked to be located where we are.”

But great challenge, he says, can expose great opportunity, and morale in the community surrounding AppHarvest is “incredibly high” because the company’s efforts are creating jobs and therefore livelihoods for residents. 

That human element of AppHarvest’s story is, he admits, hard to translate into investor-speak. “What we’re able to do here and how quickly we’re able to move and how much communities want us to be here on the ground, you can’t put that in a pitch deck or capture it in financial means,” he says.

Equally important to communicate is why we need the efforts of those in the controlled ag space.

Most indoor ag companies, from Gotham Greens to AeroFarms to Plenty, highlight the more well-known benefits of controlled-environment farming: 90 percent less water usage, 40 percent less energy consumption. Less talked about are the reasons indoor ag is so crucial right now. The UN has already warned that we only have about 60 harvests left in our top soil. Plowing and over-tilling have increased erosion by 10 to 100 times natural rates, and that’s to say nothing of deforestation, overgrazing, and pesticides that add to soil degradation. Throw in a human population predicted to reach nearly 10 billion people by 2050, and traditional agriculture’s toll on both the earth and the food system start to look a little less abstract and far more disconcerting.

“We have to free up land and water to the wild,” says Webb. “This is a topic we’re not talking about nearly enough.” 

Controlled ag, he says, plays a critical role in this process, and is in many ways the third wave of sustainable infrastructure, after alternative energy and electric cars. Like the other two areas on that list, controlled agriculture will continue to evolve over time as one piece of the overall agricultural system. 

What it will look like in even just a few years remains to be seen. The last several months have seen huge investment dollars and a lot of different companies trying different methods around controlled-environment agriculture, from vertical farming in reclaimed shipping containers to high-tech rooftop greenhouses to planting farms in grocery stores. 

For Webb, analyzing whether one method is superior to another shouldn’t be the focus right now. The point is, companies are building solutions in response to a global problem with profound environmental and humanitarian consequences. 

“We can debate all we want but at some point we have to move,” he says. “At some point you have to leave the analysis behind. At some point you have to build something.”