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Daily news and analysis about the food tech revolution

controlled environment agriculture

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.

Re-Nuble Aims to Use Food Waste To Make Indoor Agriculture More Sustainable

The role of indoor growing, ranging from small indoor vertical farms to large greenhouses, is vital to sustaining the world’s food supply. Controlled Environmental Agriculture is essential for growing crops in underused spaces, rooftops, and rows of vertical gardens. Seizing upon this vital resource, Tinia Pina, Founder & CEO of ReNuble, has taken up the challenge to help this idea scale. With a best-in-class nutrient and growing medium, Pina’s company has created organic compounds sourced from food waste for sterile, technology-driven hydroponic and soilless systems.

For the dynamic Pina, her vision for what became Re-Nuble started more than six years ago in the New York school system. “I also saw our outreach educational classes for this program were from 8 a.m. until 3 p.m.,” she recalled in an interview with The Spoon. “I noticed what the kids were bringing for class for lunch, and those options were very processed. With that diet, you see a direct impact on their level of attention. And I felt, from a systemic perspective, that will immediately impact the type of productivity and retention of the information we’re teaching. So overall, I always felt that people with better access to nutrition are spending more time being able to be fully immersed and retaining the information. And they are calling less out of work with fewer sick days.”

The genesis of Re-Nuble’s solution, Pina goes on to explain, came from her observation of how food waste was disposed of. “At that time, New York was spending $77 million to export its food waste to China, Pennsylvania, and Virginia. And that’s simply because we don’t have the composting infrastructure to handle it,” Pina said.” I wondered how we could make food waste a consistent alternative for conventional synthetic fertilizers by doing it for soils or hydroponic systems. So, we focused on using food waste as a viable alternative for chemical fertilizers in indoor grow environments.”

Specific to its product lines, Re-Nuble’s Head of Business Development & Strategy, Riyana Razalee, said in a company press release, “CEA is a large part of the future of farming, and so, we have to prioritize its role in decarbonization. Solutions need to address the gamut of the food supply chain, decarbonizing as many parts of it as possible. This vital issue is what our team is focused on”. The company states that for every acre of an indoor farm that uses Re-Nuble’s organic hydroponic nutrient, Away We Grow, the company can remove up to 5 metric tons of carbon emissions annually. That’s approximately one home’s energy use for a year.

In addition, its grow medium, ReNu Terra, supports the anti-peat movement. Companies, activists, and governments are demanding the reduction of drained peatlands. When farmed for agriculture needs, peat changes from a carbon sink to a greenhouse gas emitter, releasing approximately 1.9 gigatonnes of CO2e annually. This amounts to 0.4 billion gasoline-powered passenger vehicles driven for a year.

Pina said Re-Nuble has three customer segments now. First is the consumer market. Away We Grow could be part of a kit offered for an indoor growing system. “Consumers are eager to find more environmentally and people and animal-friendly solutions,” Re-Nuble’s CEO noted. The second segment is commercial farms such as Gotham Greens. The third, she said, is “disruptive farms.” For the last group, she stated, “There are severe supply shortages globally, and so there’s a lot of urgencies to find something that could be more sustainable, but even more importantly, something that they can afford.”

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.

Impact Justice Launches Program to Train Incarcerated Populations to Become High-Tech Farmers

This week, Impact Justice announced the launch of Growing Justice, a new program that utilizes precision indoor agriculture to expand access to fresh food in prison communities and provide skills training to incarcerated and formerly incarcerated populations.

The program’s first containerized vertical farm and job training program will be at the Central California Women’s Facility in Chowchilla, the first of what Impact Justice says will be multiple Growing Justice installations at corrections facilities across California. The second location will be Impact Justice’s Oakland headquarters. Both installations will be hydroponic farms built inside shipping containers outfitted with grow lights and irrigation systems.

The Growing Justice work training program is available to populations within 24 months of their scheduled release date. Those already released can apply to participate in the program. Growing Justice is also working with controlled environment agriculture advisory firm Agritecture to create a six-month training program tailored to give prison populations hands-on experience operating a vertical farm.

The organization is also working with a number of vertical farming startups to create pathways for employment post-training, including Square Roots, Bowery Farming, and Fork Farms.

“People in prison face substantial challenges, including poor and limited food choices. For those released, employment options are limited and healthy food remains difficult to obtain,” says Impact Justice President Alex Busansky. “Growing Justice demonstrates how government, the nonprofit sector, and businesses can work together to improve the quality of food, create pathways to jobs, and give people a real second chance.”

In addition to job training, Growing Justice also provides fresh food to prison populations. According to Impact Justice, a fully operational containerized farm will provide up to 60 pounds of leafy greens and herbs per week. Only 11% of prison populations have regular access to fresh vegetables, and this low access often leads to lingering health problems for prison populations that can often extend well-beyond incarceration.

Growing Justice is the latest program in the vertical farming space launched to help train a new generation of farmers. Kentucky-based Appharvest has been building training centers at schools in low-income areas of Appalachia to give high-school students skills training in vertical farming, while Freight Farms works with schools around the Northeast to launch containerized farms at high schools.

The program by Impact Justice is unique, however, in its focus on bringing rehabilitative programming to incarcerated and formerly incarcerated populations. Initially funded by the California State Legislature, the California Department of Corrections, and an anonymous donor, the program provides a potential pathway for people of color to start businesses and find employment post-incarceration.

The program is a tangible example of how newer approaches to food production can be made as on-ramps for marginalized populations to enter the job market. What makes Growing Justice pretty neat is it’s also a very tech-forward and sustainability-centered approach to farming, a part of the economy where people of color own a tiny percentage of businesses.

Construction of the containerized farm at the Central California Women’s Facility will begin in early 2023, and the organization expects to recruit its first cohort in June next year.

Gotham Greens Opens First California Greenhouse & Becomes B-Corp Certified

Gotham Greens operates greenhouses in New York, Rhode Island, Maryland, Illinois, and Colorado — a wide geographical range for a U.S. indoor farming company. Back in March, The Spoon reported on Gotham’s plans to open up growing operations in a new region: the West Coast.

Last week, Gotham officially opened the first phase of its new Davis, Calif. greenhouse. With the new facility, the company has cemented its title as the only nationwide controlled environment agriculture brand. Gotham also announced that it has become a Certified B Corporation™, reflecting the company’s emphasis on accountability and transparency.

Gotham Greens uses a climate-controlled, hydroponic system to grow salad greens and herbs. The company reports that its tech uses 95% less water and 97% less land to produce the same results as conventional farming.

Gotham Greens CEO Viraj Puri



The new California location will help Gotham to further expand its commercial footprint, reaching more retailers (including Whole Foods, Raley’s, and Sprouts Farmers Market) out west. “California is currently responsible for growing one-third of the country’s vegetables and two-thirds of its fruits, but has faced critical issues in the past years surrounding drought, food safety and worker welfare,” CEO and co-founder Viraj Puri told The Spoon via email. “Our approach is designed to cut down on food miles and bring our farms closer to you. Building greenhouses next to large urban populations and distributing our produce regionally allows us to reduce transportation time, fuel consumption and associated carbon emissions.”

Generally speaking, Gotham seeks out greenhouse locations that offer short delivery routes to retail locations. Aside from slashing emissions, the company’s regional hub model helps to cut transportation costs (one of the reasons why Gotham’s produce has achieved price parity with equivalent products).

“We’re also committed to adaptive reuse projects –– helping revitalize urban communities by transforming otherwise underutilized real estate into productive agriculture,” Puri said. The company built its Baltimore, Md. greenhouse on the site of a defunct steel mill; its Providence, R.I. greenhouse site was once home to a General Electric lighting factory.

Gotham purchased the land for its newest greenhouse from the University of California Davis. Puri said that the facility will help the company to step up its partnership with the university system. Gotham is a member of the University of California Agriculture and Natural Resources’ new controlled environment agriculture consortium, which is exploring crop optimization for indoor farming, automation and artificial intelligence in growing systems, and other topics.

In achieving Certified B Corporation™ status, Gotham has also committed itself to standards of social and environmental performance. The company already relies primarily on sunlight and renewables to power its greenhouses, and has plans to both cut its electricity use and reduce its Scope 1 and 2 greenhouse gas emission intensity by 5% by the end of 2024. According to Puri, the company’s investments in automation technology and LEDs will be key to achieving that goal.

In the next few years, Puri said, Gotham will also focus on expanding to more U.S. states and increasing operational capacity at existing greenhouses. The company will also seek out new partnerships with retailers to create salad dressings, dips, cooking sauces, and other products with Gotham Greens. (The company recently introduced a pesto sauce in Purple Carrot meal kits.)

So we’re sure to see Gotham expand and evolve in several different ways in the coming year. It’ll be particularly interesting to see what innovations the company’s partnership with the University of California might unlock, both in terms of building better indoor farming tech and advancing the agricultural workforce of the future.

After Going Public via SPAC, Controlled Environment Ag Specialist Local Bounti Looks to Disrupt the Produce Business

After Going Public, Indoor Farming Company Local Bounti Rings the New York Stock Exchange Bell

Most of the tech-focused indoor agriculture startups The Spoon covers have raised private funding rounds from investors as they scale up and expand. Local Bounti, a Montana-based controlled environment agriculture company, has charted a different course when it comes to raising capital.

Through a reverse merger with a special purpose acquisition company (SPAC), Local Bounti went public in November. Co-CEO Craig Hurlbert rang the opening bell at the New York Stock Exchange last week, celebrating Local Bounti’s emergence as a publicly traded company. It’s a milestone that reflects what makes the company stand out in the indoor farming space: a practical, somewhat old-school focus on business economics.

Hurlbert and his co-CEO Dr. Travis Joyner originally entered the indoor farming space as co-founders of a private equity firm seeking to invest in a controlled environment agriculture startup. But as Hurlbert and Joyner looked into existing companies, they saw an opportunity to create something unique.

“We came from the energy space, where unit economics is everything, and we thought we could bring that to the industry,” Hurlbert told The Spoon over Zoom last week. So they founded Local Bounti, aiming to build a unique CEA organization with a built-in focus on unit economics.

Local Bounti’s uses a patent-pending “stack and flow” growing system, which Hurlbert described as a hybrid of greenhouse and vertical farming. According to Hurlbert, the flexibility of the system should allow the company to expand its current catalog of eight profitable SKUs to over 30. The company estimates that its system uses 90% less land and water to grow its greens than it would take to produce the same output via conventional agriculture.

Since Local Bounti’s founding in 2018, the company has attracted some big-name investors, including Cargill and BNP Paribas. Hurlbert said that the team’s focus on unit economics helped to draw in those investors.

According to Hurlbert, Cargill also developed an interest in Local Bounti because the legacy agriculture corporation is taking note of increasing demand for environmentally friendly produce: “Cargill’s customers have been coming to them and saying, ‘We want to focus on a more sustainably grown, cleaner product that’s better for our end consumers.’ And that’s why they started looking at the CEA space.”

Cargill’s relationship with Local Bounti is three-pronged: The legacy agriculture corporation has invested on the equity side, contributed to Local Bounti’s $200 million debt facility, and helped the company to establish partnerships with its own customers.

Last year, though, Local Bounti’s leadership decided to depart from the normal capital-raising route. “We already know we have a differentiated technology. We know what our facility can do,” Hurlbert said. “It’s now time to balance the technology with capitalization so we can really get out there and make our mark.”

So Local Bounti completed a merger with Leo Holdings III Corp., a publicly-traded special purpose acquisition company, last month. Local Bounti is now trading on the New York Stock Exchange under the ticker symbol “LOCL.”

“I’m so happy for the whole team that we were able to achieve this,” Hulbert said, reflecting on ringing the opening bell at the stock exchange. “And really, the finish line to the deal is the starting line to the company. So we’ve got a weekend to celebrate, and then we’ll get out there Monday morning and really go about the disruption process.”

On the retail side, Local Bounti has partnered with Idaho-based grocery chain Albertsons to get its products to consumers. The company has placed its products in about 100 Albertsons stores throughout the Intermountain West, and hopes to expand the relationship.

The company also has big plans when it comes to brand-building. “I would encourage you to go to the grocery store, look in the produce section, and ask yourself if there’s a brand there that you connect with,” Hurlbert said. He doubts that the answer will be yes — but he thinks that Local Bounti can change that with the expertise of CMO Josh White, formerly CMO at Chobani.

When it comes to the big picture for controlled environment agriculture, Hurlbert believes it’ll only take some time and consumer education to develop a loyal base of buyers: “I think when the consumer gets complete transparency about this product — how it affects the environment, how long it’ll last in their refrigerator — they’ll never go back.”

Report: S2G Ventures Talks Alt-Protein, the Digitization of Grocery, and Other Areas of Food the Pandemic is Reshaping

“We continue to see the pandemic act as a catalyzing agent to accelerate trends that were in motion before it began. We believe that food and agriculture has undergone significant structural changes that will alter the course of the industry.” 

So says a new report from S2G Ventures, a VC firm based in Chicago, Illinois. The report, titled “The Ingredients for a Food System Revolution,” analyzes eight pandemics and outbreaks throughout history to pinpoint patterns around financial and economic recovery, innovation, and behavioral changes and norms. The analysis gives a clue as to how the current COVID-19 pandemic is reshaping norms, particularly when it comes to how we produce, get, and eat our food.

As an investment firm, S2G focuses mainly on the food and agriculture sectors, and counts AppHarvest, Shenandoah Growers, and Trace Genomics among its portfolio companies. It follows, then, that the new report is largely focused on how pandemics, epidemics, and outbreaks in the past have changed our food system and how the COVID-19 pandemic is continuing to do that at this very moment. “More decentralization [is] going to occur, more convergence of food and health, more decommodification as well,” Sanjeev Krishnan, S2G Ventures Managing Director and Chief Investment Officer, tells The Spoon.

As the report notes, “While there are many factors influencing the future of our food system, the study of past pandemic economic history is starkly consistent – an innovation cycle begins, and old habits and norms do shift.” 

A couple especially compelling areas where this is happening include alternative protein and online grocery.

As traditional meat-processing facilities face challenges and the unit economics for some types of alt-protein go down, we’re seeing more of the latter make its way into the mainstream. Krishnan explains we are moving more and more towards an “all of the above” view of protein. “I think there’s going to be animal protein, plant protein, and cell protein,” he says. Production of animal protein, in particular, will see “natural momentum around more niche, regional, decommoditized” products. Plant-based proteins, meanwhile, will see an increased focus on nutrition and affordability, while more countries will follow Singapore’s lead when it comes to cultivated meat. China is another important place to watch in this area, according to Krishnan.

S2G’s report also honed in on channel digitization, and specifically on the grocery sector. The report notes that a forced transition to online grocery during the pandemic “exponentially increased penetration from 24% to 49% between 2019 and 2020. Seniors became the fastest-growing segment of online shoppers on Instacart in 2020. In future, consumers will take “a hybrid approach” to groceries, and retailers will start to slightly differentiate what they sell online versus in the brick-and-mortar store.

The report also calls out controlled environment agriculture, a convergence of food and health, and food and agriculture digitization as other key areas to watch in terms of how the pandemic is reshaping the food system.  

“We can build a more resilient and hopeful food system that both addresses planet health and human health coming out of this,” says Krishnan. “Let’s use the pain and the agony and the anxiety that occurred as a call to action.

InFarm Plots a Major Retail Expansion Across Canada

InFarm is partnering with Sobeys, one of the largest food retailers in Canada, to sell its vertically grown greens in grocery stores across the country. The Berlin, Germany-based indoor agriculture company plans to be in an additional four of 10 Canadian provinces by 2023. The deal will place InFarm in over 1,000 retail locations across Canada.

InFarm’s original entry into Canada happened in March 2020, when the company brought its small, pod-like modular farms to Sobeys stores, Thrifty Foods, and Safeway Canada, all subsidiaries of the Empire Company. These smaller farms can be placed directly in the produce section of a grocery store or nearby, making it possible for retailers to harvest greens onsite and sell them directly to consumers faster.  

For InFarm, this most recently announced expansion also means constructing more of its InFarm Growing Centers, which the company says are “growth, production and distribution hubs” that also hold high-capacity vertical farms. The company first announced these centers at the beginning of 2021, saying it had 15 of them either planned or under construction across major urban centers.

Modularity is the underlying principle behind both the pod farms in produce sections and the larger Growing Centers. The size of these farms can change depending on where they are located. As InFarm CEO Erez Galonska told The Spoon earlier this month, this modularity allows the company to respond to demand faster in any given area since it takes less time to launch a smaller farm compared to some of the industrial-sized operations out there. “If you think of larger-scale farms, they require a lot of upfront investment and can take some time to set up,” he said. “We took a modular approach to help address this, reducing the amount of cash needed to start operations and speeding up the process.”

In today’s announcement, InFarm said that its new deal with Sobeys comes in response to demand, and that it will increase production volume in Canada by sevenfold. New Growing Centers are planned for Calgary, Halifax, and Winnipeg. A site in Hamilton, Ontario will eventually host InFarm’s largest Growing Center in North America.  

Over the next five years, InFarm plans to expand its selection of produce to include tomatoes, strawberries, peppers, mushrooms, salads and potted plants. The company plans to have 100 growing centers in operation by 2025.

InFarm Bets on Modular for the Future of CEA Growing

Much of the recent news (and investment dollars) in vertical farming has centered on massive, stationary plant factories that produce pounds of leafy greens in the millions. 

Bucking this norm — and possibly building a new one for indoor agriculture in the process — is a company called InFarm. Those that follow indoor ag developments closely will be familiar with the name, and may even have purchased greens at one of the stores where the company keeps its farms.

The Berlin, Germany-based company, founded in 2013, has long been known for its small, pod-like hydroponic farms it installs in grocery stores in restaurants. Greens can be harvested onsite — a major advantage when it comes to leafy greens, which are delicate and often get harmed during shipping and distribution. These mini-farms are currently in a few hundred locations around the world.

Earlier this year, the company also launched the first of a planned 15 InFarm Growing Center facilities. Each of these will produce the equivalent of 10,000 square meters of farmland, which is 1 hectare or about 2.47 acres in traditional farmland.  

Modularity is a key component of both concepts, as is the idea of a decentralized network of farms that share data with a main hub. Right now, the norm for vertical farming tends towards large, warehouse-sized farms that are stationary and can therefore only serve certain regions. Typically, companies like West Coast-based Plenty or AeroFarms in the Northeast and Kalera in the South distribute their greens to grocery retailers within a certain distance, usually no more than one day’s drive. If these companies want to expand to new markets, another lengthy construction must be planned and executed.

InFarm’s pods don’t go up overnight, but as CEO Erez Galonska explained to The Spoon recently, the company can respond more quickly to demand in any given area because of the pods’ modular design. For example, a farm might be built and operating within six weeks, versus eighteen months for a larger, less mobile build like those of other vertical farm companies.

Size-wise, InFarm’s units are anywhere between 30 and 100 feet tall. At maximum capacity, they can produce more than 500,000 plants per year. For now, crops are largely in the leafy greens space, though InFarm did recently say it is expanding its crop capabilities to mushrooms, tomatoes, and chilis. Galonska says the company has more than 75 products, and eventually wants “to fulfill our ultimate goal of offering the whole vegetable and fruit baskets.”

Leafy greens require fewer inputs (water, energy) than other vegetables to grow, which is one of the reasons they’re such a popular crop. And as was recently explained by World Wildlife Fund, energy consumption is still a major hurdle (among others) for indoor farming, and one reason the sector hasn’t moved far beyond leafy greens.

Collecting more data on plant growth and optimal growing conditions could help companies like InFarm eventually lower costs. It’s one of the reasons we see more and more indoor farming companies now talk about their “network,” where all farms are connected to the same network and feed data on plant growth back to the main system. InFarm’s units connect to the company’s HQ via the cloud and generate billions of data points that inform InFarm research and production. 

“The most important factor is the quantity and quality of the data that we are able to collect and generate insights from,” says Galonska. “Embedded in each and every one of our farms are more than 75 lab-grade sensors. Using hyperspectral cameras and scanning lasers, we track growth speed, photosynthesis activity and stress responses of our crops, giving real time biofeed back to how our plants are doing.”

He adds that his company has seen an 82 percent reduction in unit costs since 2018 and a 240 percent improvement in yield. The challenge, of course, will be continuing to get those gains as the company widens its crop varieties outside of the leafy green realm.

Galonska agrees that vertical farming is still a fairly capital-intensive business, which is another reason InFarm has chosen a de-centralized network for its business. “If you think of larger-scale farms, they require a lot of upfront investment and can take some time to set up,” he says. “We took a modular approach to help address this, reducing the amount of cash needed to start operations and speeding up the process.”

Equilibrium Capital Closes a $1.02B Fund for Indoor Ag

Equilibrium Capital has closed its second fund dedicated to indoor agriculture. The Controlled Environment Foods Fund II (CEFF II) raised a total of $1.02 billion, exceeding its original goal of $500 million. 

Speaking in a company blog post, Equilibrium CEO David Chen said that the fundraising for CEFF II reflects a broader shift where larger institutional investors are concerned. “Investors and retailers are increasingly looking for more sustainable and less volatile ways to invest in and scale agriculture. The fund is reflecting the magnitude of the opportunity and the growing importance of CEA in our food system,” he said. 

CEFF II will invest between $10 million and $125 million per deal, mostly in high-tech greenhouses and indoor farms as well as “other CEA segments of alternative proteins and aquaculture.” The fund is focused largely on North America: the United States, Mexico, and Canada. 

Equilibrium’s current assets are mostly in lettuce and tomatoes, which are two of the most popular produce types when it comes to indoor ag. However, Chang name-dropped berries in blog post, saying that Equilibrium will be “dramatically expanding” its presence in the berry family in the future. The statement reflects the larger development for indoor ag where more companies are either currently growing or planning to grow berries. Chang also mentioned peppers, cucumbers, mushrooms, and herbs.

The new fund follows the original CEFF, which closed at $336 million in April 2019 and includes well-known CEA companies like AppHarvest, Revol Greens, and Little Leaf Farms. All of those companies focus on raising crops in high-tech greenhouses, as opposed to the massive vertical farm setups a la AeroFarms or Plenty. Whether CEFF II will invest in more vertical farms remains to be seen. Chang said there were “niche applications” for the technology, though he was not specific about what those applications are. Currently, most vertical farming operations only grow leafy greens and herbs at the kinds of volumes that can supply grocery stores and restaurants. Debate persists as to whether this particular indoor ag format can produce more crops in an environmentally and economically sustainable way.

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.” 

BrightFarms Launches R&D Hub for Its Growing Network of Greenhouses

BrightFarms, which operates a network of greenhouses in the U.S., is launching an innovation and research hub at its Wilmington, Ohio headquarters, according to an announcement sent to The Spoon. Dubbed BrightLabs, the research facility will build on BrightFarms’ existing work growing leafy greens in a greenhouse setting aided by tech.

The company calls BrightLabs “one of the most advanced biotechnology ventures in the indoor farming industry” and one that will develop ways to improve the flavor, texture and yield of plants the company grows in its five greenhouses. Tech experts along with microbiologists and plant scientists will join the BrightLabs team, which will be led by Matt Lingard, formerly a Bayer greenhouse scientist. Lingard has recently joined BrightFarms as the VP of Agriculture.

One of BrightFarms’ biggest achievements to date is that it’s mastered the notoriously difficult task of growing spinach in a greenhouse (or any indoor ag setting). Spinach is especially susceptible to a certain kind of water mold, presenting a challenge for greenhouse and indoor ag operations that rely on hydroponic systems. BrightFarms says it already has proprietary research on the process of growing spinach indoors, and, via BrightLabs, aims to double the production of that particular crop.

Another notable aspect of BrightLabs is that the hub will allocate significant energy to studying plant microbiome, the natural bacteria that influences plant health. The company says it can do this because the greenhouses are powered by sunlight and so there is not a need to spend abundant R&D dollars on artificial lighting solutions (e.g., LEDs). “So instead of spending R&D dollars on finding expensive and energy-intensive artificial lighting solutions, we can zero in on how to simply grow better plants,” BrightFarms CEO Steve Platt told The Spoon. He added that BrightLabs plant scientists are developing proprietary ecosystems that will optimize plant microbiome to help crops flourish. “By putting the microbiome to work, we can do more of what we do best: grow great lettuce,” he said.

A recent survey found that many growers plan to add more LEDs in the future as well as climate control systems, and post-harvest automation tech. Plant microbiome did not factor into the report, and BrightFarms is still rather unique in its decision to focus on that as a means of increasing and improving yield.

BrightFarms said that the launch of BrightLabs means 10 percent of the company is now dedicated to developing “patented growing solutions” that will be applied across the company’s network of greenhouses. As noted above, there are currently five such facilities, one each in Ohio, Pennsylvania, Illinois, North Carolina, and Virginia. The company says that by the end of the year, its leafy greens will be available at over 3,500 stores.