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Is AppHarvest the Future of Farming?
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.
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.
AgTech Insight, Agritecture Announce Strategic Partnership
AgTech Insight will advise and provide services to Agritecture clients in the large scale outdoor agriculture industry while Agritecture will advise and provide services to AgTech Insight clients in the urban agriculture space
September 6, 2019
The Deal Will Allow Both Companies To Offer
Clients A Broader Collection of Services
AgTech Insight, based in Salinas, California, and Agritecture, based in Brooklyn, New York, have announced the formation of a strategic alliance between the two firms. AgTech Insight will advise and provide services to Agritecture clients in the large scale outdoor agriculture industry while Agritecture will advise and provide services to AgTech Insight clients in the urban agriculture space. The focus of the mutually beneficial effort is aimed at improving both firms capabilities across a broader array of services for clients in the ag sector globally.
"The urban and indoor agriculture space is rapidly growing around the world and collaborating with Agritecture, given their leadership in their industry sector and global vision using innovation and best practices to help a growing population is a natural fit," Aaron Magenheim, founder of AgTech Insight, said, per a press release. “Over the past year, it has been great to work with David Ceaser and the Agritecture team sharing our expertise and working on projects together. There is a unique resource we have been developing together which we will be sharing with the world soon and are excited to be working together to bridge the urban and large scale agriculture sectors.”
"Agritecture is very excited about our collaboration with AgTech Insight," David Ceaser, Agritecture's horticultural specialist said, per the release. “ Urban and peri-urban farming is generally smaller scale agriculture and focuses on smaller more niche consumer markets. But, as far as the farming goes, there is no reason to re-invent the wheel. There is a ton that we can learn from large scale outdoor ag. The vast amount of experience and knowledge that Aaron and his team bring to the table is invaluable for us.”