Viraj Puri, co-founder of indoor agriculture company Gotham Greens, used a baseball game metaphor to illustrate the progress the leafy greens segment of controlled environment agriculture has made.
“I think greenhouse-grown leafy greens are kind of entering the middle innings now,” he says. “We’re out of those first early innings, and I think now it’s going to just really be about execution.”
Puri, along with Gotham Greens’ new CEO Craig Stevenson, joined “The Packer Podcast” to discuss the future of CEA growing.
Puri says that in the 15 years since Gotham Greens’ founding there has been a lot of change and turnover, but the art of growing in a controlled environment has been around for much, much longer.
“Some of the shakeout that you’ve seen more recently has been younger-stage companies fueled by a lot of large-scale venture capital investment that we saw flow into controlled environment agriculture, things like vertical farming and greenhouses,” Puri says. “Not every business model, unfortunately, or technology selection proved to be sustainable.”
Puri says those companies that have succeeded — like Gotham Greens — are grounded in growing.
“We have to be focused on the fundamentals,” Puri says. “You have to grow high-quality produce, and I know that sounds so basic, but I think many of these very well-funded technology plays were really focused on technology, and I think we’ve been really disciplined about focusing on our customers, focusing on operational efficiency, and frankly, disciplined growth.”
While Puri says there may still be some more consolidation in the industry, “I think there’s room for a lot more greenhouse growers, but maybe not so many brands.”
And this, Stevenson says, is where the industry has shifted from early stage into those middle innings. Stevenson says the industry is past proof of concept into how the industry continues to fuel growth.
“I think that there will certainly be players who emerge from in these middle innings significantly stronger, and I think those, those ones who have brands that consumers know and trust be ones that are in the best position to succeed,” Stevenson says.
Puri says that while 60% to 70% of all tomatoes sold in grocery stores are grown in controlled-environment agriculture facilities, most consumers don’t think about how the tomato was grown.
“They just buy tomatoes,” he says. “They don’t necessarily think of it as a CEA tomato, or a hot house grown tomato. A tomato is a tomato, a cucumber is a cucumber, a pepper is a pepper.”
But, he says, that’s not the case for greenhouse-grown lettuce. He says consumers see it as a subsegment or category and not just a commodity.
“I believe in the coming years, part of the vernacular is going to change, and it’s just going to be lettuce,” Puri says. “I think consumers will stop thinking about it as even a separate category anymore.”
Stevenson says as consumer expectations continue to evolve and they see non-GMO or pesticide-free produce as more of a standard than a bonus trait, the CEA industry will be well equipped to capitalize on this momentum. Younger consumers also want to understand how food is grown and where it’s grown, and he sees the industry as being in a strong position to tell that story.
“I think it’ll make CEA a significant part of the food system moving forward,” Stevenson says.
