- Indoor vertical farming company AeroFarms has emerged from Chapter 11 bankruptcy after filing for it in June of this year.
- The company has “eliminated spending” on all projects not related to its Danville, Virginia farm, a move it says will accelerate “its path to profitability.”
- According to court filings, AeroFarms has received approval from the bankruptcy court for its Asset Purchase Agreement with a group of existing investors led by Grosvenor Food & AgTech.
- AeroFarms has appointed food and ag vet Molly Montgomery as acting CEO.
The AeroFarms facility in Danville, Virginia. Image credit: AeroFarms
‘We’re just going to focus on commercial production right now’
“The chapter 11 was a recourse for us,” AeroFarms cofounder and chief marketing officer Marc Oshima told AgFunderNews. “But the fact is, inside investors who have inside knowledge about the actual core business in terms of the commercial operations are investing millions back with a lens on saying we’re just going to focus on [commercial production] right now.”
Since voluntarily filing for bankruptcy protection a few months ago, AeroFarms has been streamlining its business with the aim of reaching profitability — something that’s so far eluded most controlled environment agriculture (CEA) operations.
The company said in a statement it has “eliminated spending on all projects that do not contribute to the ramp-up of the Danville Farm” including turning its Newark, New Jersey facility into an R&D operation.
Under Section 363 of the U.S. Bankruptcy Code, AeroFarms sold the Danville farm and related assets in July to AF NewCo Inc., a new entity formed by existing AeroFarms investors including the aforementioned Grosvenor along with INGKA Investments Ventures, Cibus Fund and others.
Oshima called the move “a means for the inside investors to be able to bid and invest money back.”
“It’s a sizable amount of money, but again, they’re continuing to validate the work we’re doing, and they’ve done extensive due diligence. They’ve been part of us for multiple rounds, and they’ve seen the history so they know firsthand knowledge what we’re doing; that more than anything, I think, should be a real positive sign.”
Grosvenor managing partner stated Stephan Dolezalek said the emergence from bankruptcy marked “a new chapter in the maturity and growth of AeroFarms.”
“We have now put in place changes needed to deliver on [the founders’] vision. As an investor dedicated to creating a more sustainable global food supply chain, we see vertical farms as a critical part of the solution and are now focused on efficiently scaling our operations to deliver a market-leading product through a profitable business model.”
Towards Danville . . . and profitability
The Danville farm uses the fifth generation of AeroFarms proprietary aeroponic technology.
The company said revenues from this facility “have continuously climbed” since product started shipping from it roughly one year ago.
“We’re in expansion mode,” says Oshima of the farm. That includes adding several automation features to the facility that have increased throughput.
The company says it aims for “completing the ramp-up of its Danville operation by the end of 2023 and reaching profitability at the [Danville] farm soon thereafter.”
New leadership
AeroFarms also announced new leadership as part of this “next chapter,” having appointed food and ag vet Molly Montgomery as acting CEO and executive chairperson of the board of directors.
Montgomery’s resume includes a number of executive roles at high-profile agrifood companies including Benson Hill, Wilbur-Ellis, Landec, and fresh protein company Custom Made Meals (CMM).
Upon filing for Chapter 11, AeroFarms saw its longtime CEO David Rosenberg (who is also a cofounder) step down and assume an advisory role with the company. CFO Guy Blanchard had taken on additional responsibilities in the absence of Rosenberg; he has since been named president.
Montgomery called AeroFarms’ Danville facility “an impressive operation, leveraging proprietary technology to deliver a fresh product that is less vulnerable to climate-related threats.”
“I am looking forward to working with Guy Blanchard, the newly named AeroFarms President, and the rest of the AeroFarms team to complete the ramp-up of the Danville facility and to deliver a profitable operation that will enable future growth.”
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