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Coronavirus May Lead To More Indoor-Grown Produce Coming To Your Local Supermarkets
Supermarket chain Albertsons and San Francisco-based indoor vertical farm startup Plenty said this week that Plenty will supply its indoor-grown baby kale and other produce eventually to more than 430 stores across California beyond select Albertsons-owned Safeway and other stores in the Bay Area that currently, stock Plenty produce
Aug 13, 2020
Andria Cheng Senior Contributor Retail
I cover retail, from fashion to grocery, and its dance with technology
The coronavirus pandemic has disrupted traditional U.S. food and agriculture supply chain and proven to lend a potential growth opportunity for plant-based meat companies like Beyond Meat and Impossible Foods. It also may translate to your seeing more produce from indoor vertical farms in the so-called AgTech space.
Supermarket chain Albertsons and San Francisco-based indoor vertical farm startup Plenty said this week that Plenty will supply its indoor-grown baby kale and other produce eventually to more than 430 stores across California beyond select Albertsons-owned Safeway and other stores in the Bay Area that currently, stock Plenty produce.
The startup, which is backed by investors including Softbank, Amazon AMZN 0.0% CEO Jeff Bezos and Google GOOGL +0.6%’s former CEO Eric Schmidt, has raised more than $400 million as of Jan. 1, according to PitchBook. That puts it in the unicorn club of startups with valuation exceeding $1 billion.
When fresh produce demand soared at the start of the pandemic, the companies said Plenty was able to boost production to supply more produce to relieve store shortages.
“When COVID hit, that severely shocked the food chain and distribution centers were closed,” Matt Barnard, Plenty CEO, said on financial network CNBC Wednesday. “There were instances when Plenty was the only thing on the shelf. We were able to prove the extreme reliability of our farms and short food chain with our local farms.”
Like its rivals including AeroFarms and Bowery Farming, these indoor farms make part of the growing crop of AgTech companies that often have some sort of environmental sustainability pitch and tout the use of data science and other technology to increase crop yield and make different parts of agriculture more efficient and traceable. Plenty, for instance, said its vertical indoor farm uses less than 1% of land and 5% of water compared to traditional farming.
In another sign of growing interest in the space, Oracle ORCL -0.3% Co-founder Larry Ellison and physician Dr. David Agus in July formed Sensei Holdings that also includes an indoor-farm AgTech unit.
Investors also look to be taking a growing interest in the space, especially against the uncertain impact of the pandemic and how it may upend the global food supply chain.
AgTech venture capital investment totaled $2.2 billion in the first two quarters of this year, after a record 2019 when $2.7 billion in total was raised, according to a study by Pitchbook and VC firm Finistere Ventures, which also invests in Plenty. This is in sharp contrast to Pitchbook data showing VC funding in the battered-retail sector having slumped by more than half this year.
In the so-called food-tech category, $4.8 billion already has been raised the first six months of this year, compared to $7 billion in total last year, the research shows. Most of the funding for both the food and agriculture tech spaces this year came in the second quarter when Covid-19 escalated to become a global crisis.
As consumers increased online orders, that translated to delivery companies Deliveroo, DoorDash and Instacart rounding out the top four startups, along with plant-based meat company Impossible Foods, in getting most VC funding in the first half of this year, according to the study. A case in point, for publicly-traded Uber UBER -1.2%, Uber Eats-led delivery business has beat its mainstay ride-sharing bookings.
After the pandemic idled or shut meat plants and caused spikes in prices, Beyond Meat, which went public last year, said in May it would introduce “heavier discounting against animal protein.” Company CEO Ethan Brown said then meat supply disruptions gave Beyond “an opportunity for consumers to be aware of a different model.”
The pandemic continues to sow its disruptive effect across different sectors of the economy.
Related on Forbes: As coronavirus batters retailers, mall owner Simon Property sees an opportunity in bankrupt chains
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Lead photo: With coronavirus having disrupted food supply chain, that may provide more growth opportunities for ... [+] LIGHTROCKET VIA GETTY IMAGES
Albertsons To Bring Plenty Leafy Greens To 400-Plus Stores
Plenty products are already available in some Safeway and Andronico’s locations in the Bay Area, and the plan is for more of the company’s stores in California — Albertsons, Vons and Pavilions locations — to also carry Plenty products as supply increases
August 12, 2020
Boise, Idaho-based Albertsons has entered into an agreement with South San Francisco, Calif.-based Plenty Unlimited to bring its leafy greens to more than 430 California stores.
Plenty products are already available in some Safeway and Andronico’s locations in the Bay Area, and the plan is for more of the company’s stores in California — Albertsons, Vons and Pavilions locations — to also carry Plenty products as supply increases, according to a news release.
Stores plan to carry four Plenty products to start: baby arugula, baby kale, crispy lettuce and mizuna mix.
“We pride ourselves on offering fresh, quality products that surprise and delight our customers,” Geoff White, executive vice president of merchandising for Albertsons, said in the release. “Plenty’s data-driven and sustainable methods are truly innovative, and we look forward to bringing their unique and exciting products to more customers in California as they scale their operations.”
The company’s indoor vertical farm is powered by wind and solar energy, and its operation leverages customized lighting, machine learning and data analytics, per the release. The farm can grow a million plants at a time and process 200 plants per minute.
Lead Photo: Albertsons and Plenty announced a new partnership. ( Albertsons and Plenty )
Related Topics: Produce Retail Sustainability Lettuce