The Salinas Valley, known as the "salad bowl of the United States," has been a vital source of lettuce and leafy greens for decades. The region has historically supplied most of the lettuce and leafy greens consumed across the nation. However, the recent disruption of supply chains, labor markets, water resources, and weather exposed some familiar pain points that continue to plague conventional growers and frustrate consumers with limited supply, deteriorating quality, and volatile pricing.
After all, if it isn't broken, don't fix it... until it does break.
Pains of lettuce supply chain
"2022 was an especially tough year for the lettuce supply chain," says Travis Joyner, co-founder of Local Bounti. "Combine that with the devastating impacts of climate change – record temperatures, access to water, pathogens – lettuce and leafy greens producers are operating in truly unprecedented times."
As if climate change wasn't enough, field growers had to deal with inflation. "It used to cost around 3-5,000 dollars to get a truck from the East to the West Coast. Now, it has doubled," explains Joyner.
Considering the combination of forces at play, conventional outdoor growers are struggling to push through so many hurdles. Supply chain, climate change, rising costs on raw materials, and on top of that, they feel the pressure of becoming sustainable," says Craig Hurlbert, co-founder of Local Bounti.
In response to these familiar issues, Hurlbert and Joyner began looking to invest in the controlled environment agriculture (CEA) space back in 2017.
"We were excited about the indoor ag space," said Hurlbert. But what they found didn't really impress them.
Decentralizing lettuce production
"You know, coming from the energy world, we had a deep appreciation for the operating costs of an indoor growing facility," Hurlbert continued. "So, as we did our diligence on the industry and entered into conversations with people in the space, we were disappointed by the lack of focus on unit economics and couldn't get the straightforward answer we had anticipated. That's when Travis and I decided to take matters into our own hands."
Hurlbert and Joyner wanted to build a business to produce locally, all across the US. That's how Local Bounti was born.
"We spoke to US retailers, and resoundingly, they told us that local was preferred by customers. To deliver on that demand, we couldn't build a bunch of facilities in one state, deliver across the US, and call ourselves local. So, we went all in on local – it is in the name of the company - and developed a high-yield, low-cost modular technology that can be built close to the consumer."
To address the pitfalls of the industry's legacy approach to centralized lettuce production, Hurlbert and Joyner came up with a hybrid concept that brought together the yield advantages of vertical farming with proven and efficient greenhouse horticulture – known today as Local Bounti's Stack & Flow TechnologyTM.
Combining vertical farming with greenhouse horticulture
The co-founders point out how vertical farming and greenhouse growing can have challenges of their own. The former, limited by economic scalability, and the latter, affected by its limited number of crop turns, both have the potential to hamper a grower's product mix and profitability.
"We saw that greenhouse growers, on average, get 9-15 cycles per year," Joyner explains. "Our hybrid approach is designed to address this issue. It is the unique combination of starting plants in a high-density vertical environment, followed by a transition to greenhouse, that allows us to produce 17 to 30 crop cycles per year, which gives us a capital-efficient, lower cost advantage compared to a traditional greenhouse."
Local Bounti's Stack and Flow Technology can be utilized in a new greenhouse construction, but it can also be installed retroactively in an existing facility. Both approaches are allowing Local Bounti to deliver locally grown produce from facilities within 400 miles of their 10,500 retailers across the United States. That strategy is already creating demand for considerable growth this year.
"As of now, we are producing in Montana, Georgia, and California, and we are under construction in Texas and Washington," says Hurlbert.
Decentralizing lettuce production is a solution that could ease the US lettuce supply chain, and many have pointed to CEA as an answer. Despite high expectations, results have not always been consistently delivered by all the CEA industry.
"The industry has suffered greatly from many non-serious participants that have said too many things were doable and made big promises about ROI, "explains Hurlbert.
"However, there's a real chance here to not only decentralize lettuce production but also to deliver a delicious, premium product consumers have come to expect with local, fresh controlled environment agriculture," says Hurlbert. At the end of the day, growers have to deliver a premium product and create capital efficiency, and we believe we've figured that out with our Stack and Flow Technology ."
Challenges of CEA
"When you look at what is happening with outdoor growing, it's important to consider the trends in CEA," says Joyner. "With increased pressure on facility economics, there is higher scrutiny on whether facilities will yield the necessary pounds and diversity of product based on their capital expenditure."
"The answer to that question for Local Bounti is yes, thanks to the Stack and Flow Technology," says Joyner. "Look at the success in Georgia, where we acquired a facility that was already under construction, and we are installing our technology to an existing facility design. We believe this gives us an advantage in the controlled environment agriculture space, and we continue to look at acquisition opportunities to provide more customers with delicious, locally grown greens."
As climate change and supply chain pressures mount across the lettuce and leafy greens sector, Local Bounti has created a hybrid approach that combines the yield advantages of vertical farming with efficient greenhouse horticulture. The company's Stack & Flow Technology allows for multiple crop cycles per year and assists Local Bounti in delivering locally grown produce across the United States.
Craig Hurlbert and Travis Joyner are leading a team at Local Bounti, which is working to solve the issues plaguing outdoor growers while creating transformative unit economics in comparison to existing indoor growing methods. "Consumers will no doubt appreciate this technologically-driven – and tasty – disruption as the demand for lettuce and leafy greens continue to grow," he concludes.
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