Little Leaf Farms Raises $90M to Grow Its Greenhouse Network

by Jennifer Marston

Image from: Little Leaf Farms

Massachusetts-based Little Leaf Farms has raised $90 million in a debt and equity financing round to expand its network of hydroponic greenhouses on the East Coast. The round was led by Equilibrium Capital as well as founding investors Bill Helman and Pilot House Associates. Bank of America also participated.

Little Leaf Farms says the capital is “earmarked” to build new greenhouse sites along the East Coast, where its lettuce is currently available in about 2,500 stores. 

The company already operates one 10-acre greenhouse in Devins, Massachusetts. Its facility grows leafy greens using hydroponics and a mixture of sunlight supplemented by LED-powered grow lights. Rainwater captured from the facility’s roof provides most of the water used on the farm. 

According to a press release, Little Leaf Farms has doubled its retail sales to $38 million since 2019. And last year, the company bought180 acres of land in Pennsylvania on which to build an additional facility. Still another greenhouse, slated for North Carolina, will serve the Southeast region of the U.S. 

Little Leaf Farms joins the likes of Revol Greens, Gotham Greens, AppHarvest, and others in bringing local(ish) greens to a greater percentage of the population. These facilities generally pack and ship their greens on the day of or day after harvesting, and only supply retailers within a certain radius. Little Leaf Farms, for example, currently servers only parts of Massachusetts, Pennsylvania, New York, and New Jersey. 

The list of regions the company serves will no doubt lengthen as the company builds up its greenhouse network in the coming months.

Agritech: Precision Farming With AI, IoT and 5G

Image from: Photo by Mohd Izwan Mohd Nazam/The Edge

For a company that grows and delivers vegetables, Boomgrow Productions Sdn Bhd’s office is nothing like a farm, or even a vertical farm.

Where farms are bedecked with wheelbarrows, spades and hoes, Boomgrow’s floor plan is akin to a co-working space with a communal island table, several cubicles, comfortable armchairs, a cosy hanging rattan chair and a glass-walled conference room in the middle.

At a corner, propped up along a walkway leading to a rectangular chamber fitted with grow lights, are rows of support stilts with hydroponic planters developed in-house and an agricultural technologist perched on a chair, perusing data. “This is where some of the R&D work happens,” says Jay Dasen, co-founder of the agritech start-up.

But there is a larger farm where most of the work behind this high-tech initiative is executed. Located a stone’s throw from the city centre in Ampang is a 40ft repurposed shipping container outfitted with perception technologies and artificial intelligence (AI) capabilities that mimic the ideal environment to produce more than 50,000kg of vegetables a year.

Stacked in vertical layers, Boomgrow’s vegetables are grown under artificial lights with Internet of Things (IoT) sensors to detect everything from leaf discolouration to nitrate composition. This is coupled with AI and machine learning algorithms.

Boomgrow is the country’s first 5G-connected vertical farm. With the low latency and larger bandwidth technology, the start-up is able to monitor production in real time as well as maintain key para­meters, such as temperature and humidity, to ensure optimal growth conditions.

When Jay and her co-founders, K Muralidesan and Shan Palani, embarked on this initiative six years ago, Boomgrow was nowhere near what it is today.

The three founders got together hoping to do their part in building a more sustainable future. “I’ve spent years advising small and large companies on sustainability, environmental and social governance disclosures. I even embarked on a doctorate in sustainability disclosure and governance,” says Jay.

“But I felt a deep sense of disconnect because while I saw companies evolving in terms of policies, processes and procedures towards sustainability, the people in those organisations were not transforming. Sustainability is almost like this white noise in the background. We know it’s important and we know it needs to be done, but we don’t really know how to integrate it into our lives.

“That disconnect really troubled me. When we started Boomgrow, it wasn’t a linear journey. Boomgrow is something that came out of meaningful conversations and many years of research.”

Shan, on the other hand, was an architect who developed a taste for sustainable designs when he was designing modular structures with minimal impact on their surroundings between regular projects. “It was great doing that kind of work. But I was getting very dissatisfied because the projects were customer-driven, which meant I would end up having debates about trivial stuff such as the colour of wall tiles,” he says.

As for Murali, the impetus to start Boomgrow came from having lived overseas — while working in capital markets and financial services — where quality and nutritious produce was easily available.

Ultimately, they concluded that the best way to work towards their shared sustainability goals was to address the imminent problem of food shortage.

“By 2050, the world’s population is expected to grow to 9.7 billion people, two-thirds of whom will be in Asia-Pacific. Feeding all those people will definitely be a huge challenge,” says Jay. 

“The current agricultural practice is not built for resilience, but efficiency. So, when you think of farming, you think of vast tracts of land located far away from where you live or shop.

“The only way we could reimagine or rethink that was to make sure the food is located closer to consumers, with a hyperlocal strategy that is traceable and transparent, and also free of pesticides.”

Having little experience in growing anything, it took them a while to figure out the best mechanism to achieve their goal. “After we started working on prototypes, we realised that the tropics are not designed for certain types of farming,” says Jay. 

“And then, there is the problem of harmful chemicals and pesticides everywhere, which has become a necessity for farmers to protect their crops because of the unpredictable climate. We went through many iterations … when we started, we used to farm in little boxes, but that didn’t quite work out.”

They explored different methodologies, from hydroponics to aquaponics, and even started growing outdoors. But they lost a lot of crops when a heat wave struck.

That was when they started exploring more effective ways to farm. “How can we protect the farm from terrible torrential rains, plant 365 days a year and keep prices affordable? It took us five years to answer these questions,” says Jay.

Even though farmers all over the world currently produce more than enough food to feed everyone, 820 million people — roughly 11% of the global population — did not have enough to eat in 2018, according to the World Health Organization. Concurrently, food safety and quality concerns are rising, with more consumers opting for organically produced food as well as safe foods, out of fear of harmful synthetic fertilisers, pesticides, herbicides and fungicides.

According to ResearchAndMarkets.com, consumer demand for global organic fruit and vegetables was valued at US$19.16 billion in 2019 and is anticipated to expand at a compound annual growth rate (CAGR) of 6.5% by 2026.

Meanwhile, the precision farming market was estimated to be US$7 billion in 2020 and is projected to reach US$12.8 billion by 2025, at a CAGR of 12.7% between 2020 and 2025, states MarketsandMarkets Research Pte Ltd.

Malaysia currently imports RM1 billion worth of leafy vegetables from countries such as Australia, China and Japan. Sourcing good and safe food from local suppliers not only benefits the country from a food security standpoint but also improves Malaysia’s competitive advantage, says Jay.

Unlike organic farming — which is still a soil-based method — tech-enabled precision farming has the advantage of catering for increasing demand and optimum crop production with the limited resources available. Moreover, changing weather patterns due to global warming encourage the adoption of advanced farming technologies to enhance farm productivity and crop yield.

Boomgrow’s model does not require the acres of land that traditional farms need, Jay emphasises. With indoor farms, the company promises a year-round harvest, undisturbed by climate and which uses 95% less water, land and fuel to operate.

Traditional farming is back-breaking labour. But with precision technology, farmers can spend less time on the farm and more on doing other things to develop their business, she says.

Boomgrow has secured more than RM300,000 in funding via technology and innovation grants from SME Corporation Malaysia, PlaTCOM Ventures and Malaysia Digital Economy Corporation, and is on track to build the country’s largest indoor farms.

Image from: Boomgrow

The company got its chance to showcase the strength of its smart technology when Telekom Malaysia Bhd (TM) approached it to be a part of the telco’s Smart Agriculture cluster in Langkawi last October.

“5G makes it faster for us to process the multiple data streams that we need because we collect data for machine learning, and then AI helps us to make decisions faster,” Jay explains.

“We manage the farm using machines to study inputs like water and electricity and even measure humidity. All the farm’s produce is lab-tested and we can keep our promise that there are no pesticides, herbicides or any preserving chemicals. We follow the food safety standards set by the EU, where nitrate accumulation in plant tissues is a big issue.”

With TM’s 5G technology and Boomgrow’s patent-pending technology, the latter is able to grow vegetables like the staple Asian greens and highland crops such as butterhead and romaine lettuce as well as kale and mint. While the company is able to grow more than 30 varieties of leafy greens, it has decided to stick to a selection of crops that is most in demand to reduce waste, says Jay.

As it stands, shipping containers are the best fit for the company’s current endeavour as containerised modular farms are the simplest means of bringing better food to local communities. However, it is also developing a blueprint to house farms in buildings, she says.

Since the showcase, Boomgrow has started to supply its crops to various hotels in Langkawi. It rolled out its e-commerce platform last year after the Movement Control Order was imposed. 

“On our website, we promise to deliver the greens within six hours of harvest. But actually, you could get them way earlier. We harvest the morning after the orders come in and the vegetables are delivered on the same day,” says Jay.

Being mindful of Boomgrow’s carbon footprint, orders are organised and scheduled according to consumers’ localities, she points out. “We don’t want our delivery partners zipping everywhere, so we stagger the orders based on where consumers live. 

“For example, all deliveries to Petaling Jaya happen on Thursdays, but the vegetables are harvested that morning. They are not harvested a week before, three days before or the night before. This is what it means to be hyperlocal. We want to deliver produce at its freshest and most nutritious state.”

Plans to expand regionally are also underway, once Boomgrow’s fundraising exercise is complete, says Jay. “Most probably, this will only happen when the Covid-19 pandemic ends.”

To gain the knowledge they have today, the team had to “unlearn” everything they knew and take up new skills to figure what would work best for their business, says Jay. “All this wouldn’t have been possible if we had not experimented with smart cameras to monitor the condition of our produce,” she laughs.

Warehouse Becoming Vertical Farms — And They’re Feeding New Jersey

Image from: New Jersey 101.5

New Jersey's vertical farms are transforming agriculture by helping farmers meet growing food demand.

New Jersey Agriculture Secretary Doug Fisher said that while conventional farming in outdoor fields remains critical, vertical farming has its advantages because of its efficiency and resistance to pests and thus less need for chemicals.

Vertical farming is the process of growing food vertically in stacked layers indoors under artificial light and temperature, mainly in buildings. These plants receive the same nutrients and all the elements needed to grow plants for food.

Vertical farms are also versatile. Plants may be growing in containers, in old warehouses, in shipping containers, in abandoned buildings.

"That's one of the great advantages — that we can put agriculture in the midst of many landscapes that have lost their vitality," said Fisher.

ResearchandMarkets.com says the U.S. vertical farming market is projected to reach values of around $3 billion by the year 2024.

The one drawback is that its operational and labor costs make it expensive to get up and running.

Image from: AeroFarms

In the past decade, however, vertical farming has become more popular, creating significant crop yields all over the state.

AeroFarms in Newark is the world's largest indoor vertical farm. The farm converted a 75-year-old 70,000-square-foot steel mill into a vertical farming operation. AeroFarms' key products include Dream Greens, its retail brand of baby and micro-greens, available year-round in several ShopRite supermarkets.

Kula Urban Farm in Asbury Park opened in 2014. Vacant lots are transformed into urban farms and there's a hydroponic greenhouse on site. That produce is sold to local restaurants.

Beyond Organic Growers in Freehold uses no pesticides and all seeds and nutrients are organic. There's a minimum of 12,000 plants growing on 144 vertical towers. On its website, it says the greenhouse utilizes a new growing technique called aeroponics, which involves vertical towers where the plant roots hang in the air while a nutrient solution is delivered with a fine mist. It also boasts that by using this method, plants can grow with less land and water while yielding up to 30% more three times faster than traditional soil farming.

Vertical farms in New Jersey help feed local communities. Many are in urban areas and are a form of urban farming.

Fisher predicts that vertical farms will be operational in stores and supermarkets around the state.

"It's continued to expand. There's going to be many, many ways and almost any area in the state has the opportunity to have a vertical farm," Fisher said.

Is AppHarvest the Future of Farming?

Special purpose acquisition companies, or SPACs, are red-hot right now, with investors clamoring to get into promising young companies.

In this video from Motley Fool Live, recorded on Jan. 28, Industry Focus host Nick Sciple and Motley Fool contributor Lou Whiteman discuss AppHarvest, one such SPAC that is looking to disrupt the agriculture industry. Here are the details on what AppHarvest wants to do, and a look at whether the company represents the future of farming.

Nick Sciple: One last company I wanted to talk about, Lou, and this is one I think it's -- you pay attention to, but not one I'm super excited to run in and buy. It was a company called AppHarvest. It's coming public via a [SPAC] this year. This vertical farming space. We talked about Gladstone Land buying traditional farmland. AppHarvest is taking a very different approach, trying to lean into some of the ESG-type movements.

Lou Whiteman: Yeah. Let's look at this. It probably wouldn't surprise you that the U.S. is the biggest global farm exporter as we said, but it might surprise you that the Netherlands, the tiny little country, is No. 2. The way they do that is tech: Greenhouse farm structure. AppHarvest has taken that model and brought it to the U.S. They have, I believe, three farms in Appalachia. The pitches can produce 30x the yields using 90% less water. Right now, it's mostly tomatoes and it is early-stage. I don't own this stock either. I love this idea. There's some reasons that I'm not buying in right now that we can get into. But this is fascinating to me. We talked about making the world a better place. This is the company that we need to be successful to make the world a better place. The warning on it is that it is a SPAC. So it's not public yet. Right now, I believe N-O-V-S. That deal should close soon. [Editor's note: The deal has since closed.] I'm not the only one excited about it. I tend not to like to buy IPOs and new companies anyway. I think the caution around buying into the excitement applies here. There is a Martha Stewart video on their website talking up the company, which I love Martha Stewart, but that's a hype level that makes me want to just watch and see what they produce. This is just three little farms in Appalachia right now and a great idea. This was all over my watchlist. I would imagine I would love to hold it at some point, but just be careful because this is, as we saw SPACs last year in other areas, people are very excited about this.

Sciple: Yeah. I think, like we've said, for a lot of these companies, the prospects are great. I think when you look at the reduced water usage, better, environmentally friendly, all those sorts of things. I like that they are in Appalachia. As someone who is from the South, I like it when more rural areas get some people actually investing money there. But again, there's a lot of execution between now and really getting to a place where this is the future of farming and they're going to reach scale and all those sorts of things. But this is a company I'm definitely going to have my radar on and pay attention to as they continue to report earnings. Because you can tell yourself a story about how this type of vertical farming, indoor farming disrupts this traditional model, can be more efficient, cleaner, etc. Something to continue paying attention to as we have more information, because this company, like you said, Lou, isn't all the way public yet. We still got to have this SPAC deal finalized and then we get all our fun SEC filings and quarterly calls and all those sorts of things. Once we have that, I will be very much looking forward to seeing what the company has to say.

Whiteman: Right. Just to finish up along too, the interesting thing here is that it is a proven concept because it has worked elsewhere. The downside of that is that it needed to work there. Netherlands just doesn't have -- and this is an expensive proposition to get started, to get going. There's potential there, but in a country blessed with almost seemingly unlimited farmland for now, for long term it makes sense. But in the short term, it could be a hard thing to really get up and running. I think you're right, just one to watch.

Netherlands: Additional Research Facilities At Delphy

For years, Delphy Improvement Centre in Bleijswijk and Certhon have shared the same ambition: to contribute to global solutions in the field of health, food safety and sustainability, through knowledge sharing and knowledge development. This is reflected in the Improvement Centre, which was opened a few years ago and has been used for various research projects since. The facility has now been extended with the addition of two climate cells.

Following the research facilities in the greenhouse, Delphy wanted to make an in-depth study of research and research methods. With the two climate cells realized by Certhon last summer, Delphy can gain more knowledge about daylight-free cultivation and physiological aspects of plants. This knowledge can also be applied in the greenhouse.

The two climate cells can be found in the reception area of the research centre. The doors of the cells are equipped with two small windows, so visitors can see which test set-up with which crops are inside. A few weeks ago, the first tomato and cucumber plants were placed and the research started. During the cultivation process there will be frequent consultation between Delphy and Certhon, to share advice and knowledge.

For more information:
Certhon
www.certhon.com

Publication date : 12/17/2018 

Hein van der Sande Opens Certhon Innovation Centre

Hein van der Sande Opens Certhon Innovation Centre

"The Innovation Centre is going to teach us a lot"

On Thursday 31 May, the Certhon Innovation Centre was officially opened by Hans Hoogeveen, Ambassador at the UN organizations for Food and Agriculture (FAO, WFP and IFAD) in Rome. With this center, the greenhouse builder responds to the need to produce food worldwide, in every place on earth and 365 days a year. There are more and more mouths to feed. Hein van der Sande: "The main aim is to achieve a significant increase in production."

Hein continued: "In addition, the water can be recirculated completely. Moreover, crop protection products are not needed if you cultivate in this manner. So this method of cultivation fits in perfectly with the policy of the supermarkets. Supermarkets are getting ever stricter requirements to the use of crop protection products. We have already learned a lot, but we're going to learn a lot more. We are going for it, and I look to the future with confidence."

View the photo report here.

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The Innovation Centre is a 240 m2 greenhouse construction with insulation panels. Different cultivation methods and multi-layer cultivation are tested here. The cultivation is computer-controlled. And, last but not least, robots are going to be used. "Because that too is one of the aspects that makes progress worldwide: Technology will increasingly replace simple labor." 

In the Certhon Innovation Centre, research is being done into crops in which Certhon has expectations in various climates, humidity, and light recipes. Hein van der Sande, CEO at Certhon: “With the knowledge, we gain from the Innovation Centre, we can give our customers and partners optimal advice for maximum results. The first studies we started in the facility with herbs, tomato, sweet pepper, strawberry and raspberry plants already gave promising results and a delicious harvest!”

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Certhon did not devise this alone. Philips, Rijk Zwaan, Delphy, Wageningen UR and Koppert Biological Systems are part of this project. Hein van der Sande: "We see opportunities for the future of Dutch horticulture. We are faced with a new challenge, and we are keen to take it on. Certhon's innovative genes recognize opportunities."

Mr. Hoogeveen, ambassador and permanent representative at the UN organizations for Food and Agriculture (FAO, WFP, and IFAD) in Rome, addressed the audience: "It is a great honor to be standing here. We are proud of the Dutch horticulture sector. We notice that, everywhere in the world, Dutch horticulture is closely followed. Parties would like to cooperate with us on this level. We do not realize sufficiently the golden opportunities that this gives us. With the results of this center, everyone can produce good and nutrition-rich food thanks to conditioned cultivation. There is a need for that. After all, more and more people are going hungry. Growers have the need to be supported globally. Especially the growers in Africa are badly in need of our support."

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After the speeches of Van der Sande and Hoogeveen, the guests were given the opportunity to head to the Innovation Centre. Explanations, questions, and admiration all over.

View the photo report here.

For more information:

Certhon
+31 (0)174-225080
www.certhon.com
info@certhon.com

Publication date: 6/5/2018
Author: Mark Mandemakers
Copyright: www.hortidaily.com