Dive Brief:
- Indoor farming company Gotham Greens said it will double the size of its greenhouse capacity from 600,000 square feet to more than 1.2 million square feet this year, allowing the 11-year-old company to enter new regions and expand its footprint in existing markets.
- The operator of climate-controlled hydroponic greenhouses is building facilities near Dallas, Atlanta and Denver and expanding existing locations in Chicago and Providence, Rhode Island. Once completed, Gotham Greens will own and operate 12 greenhouses across eight states.
- Companies that grow produce indoors have grown rapidly as they benefit from consumer demand for locally grown produce raised in a more environmentally friendly way.
Dive Insight:
As companies race to grow produce indoors, a first-mover advantage will play a big role in not only getting them into retailers but keeping them there.
Gotham Greens is one of several companies bringing crops that were traditionally raised outdoors into more hospitable growing conditions inside. With demand for produce grown under more environmentally friendly conditions on the rise, indoor farming companies are quickly working to supply retailers and consumers.
Having the first truly local products available could pay dividends down the road. Stores could decide to display a grower’s produce in more locations or carry more varieties of their vegetables and fruits. By having a facility close to a retailer, producers build on the locally grown mantra and increase the likelihood that the chain will continue working with them to meet surging demand.
Indoor agriculture companies tout many of the same attributes in promoting their firms to retailers, shoppers and investors, making it imperative that they find ways to distinguish themselves from one another. In all cases, the facilities are more productive, use fewer resources such as water and land, can supply regions of the U.S. during non-growing seasons like winter and have a lower likelihood of witnessing a disease outbreak.
Gotham Greens is aiming to deliver its fresh produce within a day’s drive from its greenhouses to much of the country’s population. Recently, it has seen especially robust demand for its products. It posted 28% year-over-year growth compared to a 1% increase during the same period for the total pre-packaged salads and lettuce categories, according to Nielsen data cited by the company in its release.
Gotham Greens sells its salad greens, herbs, salad dressings, dips, and cooking sauces in approximately 3,000 stores across 45 U.S. states nationwide.
“Our goal is to deliver Gotham Greens’ fresh produce within a day’s drive from our greenhouses to 90% of consumers across the U.S.,” Viraj Puri, co-founder and CEO of Gotham Greens, said in a statement. “These strategic greenhouse expansion projects bring us closer to this milestone.”
Other companies are expanding their footprints, too. Driscoll’s and Plenty recently announced plans to build an indoor farm to grow the berry giant’s strawberries. Upward Farms plans to build a 250,000-square-foot facility in Pennsylvania to supply microgreens throughout the Northeast “and beyond.” AppHarvest, one of the few companies in the sector to be publicly traded, is in the process of quadrupling its farm network and diversifying its crops to include salad greens and berries.
Earlier this month, indoor farming company Local Bounti said it would acquire rival Hollandia Produce Group, which grows and sells leafy greens under the name of Pete’s, for $122.5 million. With so many companies rapidly expanding at the same in an effort to grab finite shelf space, more deals are inevitable.
