US-based Local Bounti, for example, has hit a number of positive milestones over the last several months, among them a $145 million investment from (among others) Cargill and kickstarting construction on new growing facilities in Washington state and Texas. (The company also has locations in California, Montana and Georgia.)
Most recently, Local Bounti welcomed a new CEO, Anna Fabrega.
Fabrega, who comes from a farming family, is a longtime executive in the food and beverage industry. She spent nearly 10 years at Amazon, including time as the managing director of Amazon Go and Amazon Kitchen. Most recently, she was CEO of prepared meal service Freshly.
AgFunder News (AFN) caught up with Fabrega on day #8 in her new role as CEO of Local Bounti. Below, she discusses how her past roles can inform her new position, Local Bounti’s greenhouse-meets-vertical-farming approach to CEA, and where the industry needs to focus to regain a steady footing in the food world.
AFN: What led you to join Local Bounti?
AF: I was super intrigued [by the opportunity] because I’ve grown up in the agriculture space. My dad still has a farm. He grows tea and coffee and just about every fruit you can imagine. It’s 2,000 acres.
The CEA space is interesting and challenging, but absolutely the direction the industry needs to go in. I think the the mission [of Local Bounti] really resonated with me: the ability to provide fresh food to people at a fraction of the water and land and food miles traveled.
The fact that Travis [Joyner] and Craig [Hurlbert] since inception really built out the technology and invested capital with this keen eye on on positive unit economics made me believe that Local Bounti is really going to be the winner in the space.
AFN: Elaborate on the unit economics element and on Local Bounti’s tech
AF: To build out and grow a vertical farm you need tens of millions of dollars of capital investment per million of dollars of crop you’re producing. So it’s really, really hard to kind of get to an EBITA-positive place if you’re exclusively doing vertical farming.
The fact that we’re leveraging Stack & Flow and using vertical farms for the young plant part of the growth process, then transferring plants to the greenhouse, allows us to identify anything that’s out of spec far earlier in the process, just like how any manufacturing facility works. And we get far greater efficiency in the greenhouse in terms of the crop cycle.
At Local Bounti, we direct seed and then young plants go into a vertical space for a set period of time depending on the crop. That’s the “stack” portion of our technology. The mature young plant is then transferred to an automated greenhouse system that moves the plants through the greenhouse on a defined recipe schedule. That’s the “flow” portion of our technology. We’ve been able to get dramatically faster grow cycles by being able to control all of the environmental elements in a vertical space in those early days of the plant’s life. We can create the perfect day for young plants, 24/7, 365 in our stack.
Think about your traditional greenhouse. Take a gutter system, for example, where you’re germinating in the greenhouse and you’re growing your seedlings in the greenhouse. You have all these gutters that are huge and these tiny little plants, whereas we can have this density that we can achieve in a vertical farming situation until the seedling is larger. From a density perspective, it’s really impactful.
AFN: What are your thoughts on the current state of the CEA industry?
AF: Greenhouse growing has obviously been around for ages; it’s really the introduction of technology that is starting to propel the industry. However, this also comes with a lot of complexity and heavy, heavy capital requirements.
One of the things that the industry needs to figure out is how to balance those things.
From my perspective, a CEA company with such a heavy layer of technology and automation becomes almost a manufacturing operation. You need to bring the operational rigor that you would bring to that kind of facility, with a very keen eye on things like food safety and efficiency.
AFN: What about balancing tech/automation with farming and plant science?
AF: One of the things Local Bounti really excels at is the research, development and innovation around farming techniques and around the plant. How do you marry that technology in order to be able to get the best possible result in the lowest possible [amount of] time?
When you’re using this level of technology and you have this level of data, you can run so many more tests than you could in an outdoor grow environment. You can kind of get precise on what you need to be doing and figure out how you scale up.
You’re also growing much faster than you would in an outdoor environment, so I think that’s one of the things that is a huge competitive advantage.
AFN: How do you feel your past work can inform your new role at Local Bounti?
AF: From my time at Amazon, two things stand out. One is a willingness and a desire to innovate on behalf of the customer. I very much feel this is what Local Bounti has in its DNA.
Then there’s being willing to be the first, which is really hard to do and you see it in the market now. You’re frequently misunderstood and constantly having to explain what it is that you’re doing, why it’s different, why it’s better for customers and better for the planet.
At Freshly, I really learned how to be thoughtful in terms of the investments that [we were] making and about the return on those investments and making sure we had a strong handle on our cost structure, so that we can get to that breakeven point as soon as possible.
AFN: What’s next for Local Bounti?
AF: Delivering on our expansion plans. So we’re continuing to expand the Georgia facility, which should be completed towards the end of this year. We have facilities in Texas and Washington under construction as well, which allows us to serve and provide a local product to a much greater swath of the US.
In addition, we’ve recently rolled out new ready-to-eat salads. We’re continuing to look at what products customers want and that will inform our future product roadmap. We’ve talked about bringing berries to market, but again, we’re trying to look at what our customers want in terms of indoor grown produce and use that as our North Star.