LAS VEGAS — The state of the industry keynote at Indoor Ag-Con, March 11-12, explored the industry’s past and present challenges, ‘transformative change,’ success stories and more.
Moderated by Tom Stenzel, executive director of the CEA Alliance, the discussion featured panelists from three different business models of controlled environment agriculture: vertical farming; semi-closed, greenhouse-grown salads; and greenhouse-grown tomatoes.
Panelists including Tisha Livingston, president and co-founder of 80 Acres and CEO of Infinite Acres; Abby Prior, chief commercial officer for BrightFarms; and Skip Hullett, vice president and general counsel for NatureSweet, shared their challenges and triumphs in an industry that has suffered setbacks in recent years.
80 Acres/Infinite Acres
Hamilton, Ohio-based 80 Acres is a vertical farming company producing a range of salads, microgreens, herbs and tomatoes. In an industry where some have focused too heavily on tech in favor of farming, Livingston and her business partner, who co-founded the company in 2015, had the vision to separate the farming and tech sides of the business.
“When we started the company, we recognized that growing and being grower-centric was very important,” she said. “Building out the technology was also important, but they were very different skill sets. So, we created these two companies.”
NatureSweet
Based in San Antonio, Texas, NatureSweet, is a greenhouse tomato grower that owns over 1,500 acres of greenhouse space, has 12 production facilities in Arizona and across Mexico, and distributes its products to retailers nationwide. Best known for its Cherubs snacking tomatoes, the company also grows peppers and cucumbers.
“We’re vertically integrated, so we’re kind of unique in our industry,” said Hullett. “We call it: from seed to smile. We grow, plant, harvest and package.”
BrightFarms
BrightFarms is a controlled environment agriculture grower based in Irvington, N.Y.
“We have a network of farms that support our national customers,” said Prior. “Over the last year, we’ve built three new farms in Illinois, Texas and Georgia, which combined make the largest network of semi-closed, high-tech greenhouses for leafy greens here in the U.S.”
BrightFarms takes a regional approach to grow locally and create regional supply chains and supply hubs for salads across the country, Prior said. The company was acquired by Cox Enterprises in 2021 and is now part of the platform of Cox Farms greenhouse growers that includes Mucci Farms.
Building a case for indoor-grown salads
Prior has been with BrightFarms for about 10 years, which is about as long the semi-closed greenhouse grower has been cultivating leafy greens.
She joined BrightFarms 10 years ago because she saw the industry was “at such an exciting point” and could “solve so many problems.”
“It could be better for the planet. It could be better for people. You could grow better products that were cleaner and be able to build it from the ground up,” said Prior, adding that while the decision to join BrightFarms was an easy one, the last 10 years have been challenging.
“About a decade ago, the share of indoor-grown salads would have been a zero,” said Prior. “The case studies to go talk to a retailer and say, ‘This is a good idea,’ … were also about zero. So, we were selling a vision. We were selling an idea. And that was really difficult … especially in a huge, profitable category like salad, with incumbent growers that were deeply entrenched in trying to make sure that [indoor-grown salad] probably wasn’t a very good idea … Those first few years of just trying to convince the world that this was an idea that was good and could be done was our greatest challenge.”
Today, BrightFarms is closing in on about a half-billion dollars a year in indoor salads in the retail market, Prior said.
“That’s about a sixth share of the salad category nationally,” said Prior, adding that the share is closer to 20% in certain markets like the Northeast.
“But I think one of the most exciting things is — if you look at the national number and you look at that sixth share — indoor salads are 100% of the growth of the category,” she said. “Conventional salads are flat, slightly down. Organic salads are flat, slightly down. So, all of the momentum of the category is coming from indoor and that is a really compelling story to be able to go to our retail partnerships [with].
Reflecting on BrightFarms’ growth in the last decade, Prior said, “For transformative change in a very large category, 10 years isn’t all that much.
“When I think about the next 10 years — we’ve seen a ton of consolidation of the companies in this room, but we’ve also seen a lot of scaling of some of the companies in this room. So, I think the next 10 years is about scaling. And the next 10 years is about how we truly become the salad category; not a segment of the salad category,” she said.
Vertical farming — an uphill battle
The last 10 years have also been a time of learning and growth for 80 Acres.
“I was the chief operating officer at Del Monte,” said Livingston. “I’m like, okay, you know, we’re gonna go figure this out. We’re gonna go build a bunch of farms, and then we’re just gonna go sell the customers that we’ve been selling to for 30 years. Guess what? It doesn’t work that way.
“You have to, like, inch your way through. You have to fight every day to do 1,000 things right,” continued Livingston, who said learning about growing and how to control the crop to get the right yields and consistent quality were among the biggest challenges in the early years of 80 Acres.
“There’s no recipe for vertical farming, and we knew that it was the future,” she said. “We need to be able to feed people more fresh produce, being able to do it without pesticides, being able to do it without as many natural resources, with 95% less water, is exactly what it’s all about.”
People want clean food that they know where it came from, Livingston said. “They want less plastics. They want less food waste. We knew those were the trends that were the wind in our sails, if you will. But we knew it was going to be a bumpy ride.”
As the grower, processor, harvester, packer and distributor of its produce, Livingston said getting 80 Acres’ operating procedures running smoothly was another challenge.
Today, 80 Acres is expanding. It has farms in Kentucky and Ohio, and through its recent acquisition of Kalera, it now has farms in Georgia, Colorado and Texas. 80 Acres sells to Kroger as well smaller customers that are “pushing us westward,” said Livingston.
Looking ahead, Livingston sees genetics as playing an increasingly important role in the future of CEA.
“When you think about the genetics, they’ve mostly been bred over the years for outdoor field production. There’s been a little for greenhouse,” she said. Livingston sees breeding for flavor, nutrition, higher yield using less resources and other desirable attributes in the indoor ag space as key.
“I think genetics is really the future for us to be able to provide healthy, great produce that really is customized for what people need today,” she said.
The need to recognize CEA innovation
For Hullett, CEA is as much about transforming agriculture as it is the lives of agricultural workers.
“What excites me about what we do, and really about CEA … is our company was founded on the mission of purpose to transform the lives of agriculture workers throughout North America,” he said. “And because of CEA, we are able to provide year-round, full-time jobs for agriculture workers, which means — particularly in Mexico, it means that they can live with their families. They can be part of their communities. They don’t have to migrate. They don’t have to leave their families.”
Hullett also credits CEA with enabling NatureSweet to produce premium products that command a premium price, which allows the company to pay good wages to its workers.
“All of our facilities are fair trade certified, so a portion of our proceeds come back to the communities where the facilities are located, and the workers actually can help decide how that money is going to be spent,” Hullett said.
With the threat of 25% tariffs on products imported to the U.S. from Canada and Mexico looming, Hullett said the greenhouse industry is faces new challenges.
“The greenhouse-grown tomato sector is what’s growing, and a lot of it is grown in Mexico and Canada,” Hullett said. “So, a lot of the imports are for greenhouse grown, because — we may get into this, but the policies of the U.S. have not been the greatest in terms of promoting innovation.”
Specifically, Hullett pointed to property taxes as a significant challenge to greenhouse growers, who are taxed for each greenhouse and the land in comparison to open field farming, which is taxed on the land.
“Most U.S. policy is still based on outdoor agriculture,” said Hullett, who added the importance of indoor farming needs to be recognized. “It really is a key part of the future of domestic production in many countries. And I do see that with the tariffs discussion these days, there is more awareness of the need for domestic production — no matter what country.”
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