Brick-and-mortar behemoth Walmart said Tuesday that it plans to invest in Plenty, a vertical farming company specializing in leafy greens. Walmart expects to carry Plenty’s leafy greens in all California stores by the end of the year.
Walmart did not disclose their exact contribution to the start-up, but the retail giant will receive a board seat at Plenty as a result of the deal. Plenty just concluded a $400 million round of funding led by One Madison Group and JS Capital.
Food “tech” companies like Plenty aim to bring farm-quality products to grocers without sacrificing sustainability or freshness.
So what is vertical farming?
According to a report by Morgan Stanley Research on the future of food, vertical farming offers food buyers an alternative to crops grown in dirt in rows. Traditional farming requires heavy land investment, but vertical farming literally grows ‘up’ instead of ‘across.’
Vertical crops can grow faster and yield more product because they rely on synthetic light sources instead of sunlight. Also, they aren’t subject to sudden changes of weather.
Another benefit is the elimination of pesticides, since bugs can’t reach the indoor grows. Pesticide runoff can damage wildlife and soil quality.
And finally, consumers will see longer shelf life for their vertical food because of the speed from farm to table. In other words, crops don’t spend long hours on the back of a truck or endure temperature changes from transportation.
Plenty sells a wide variety of spring mixes, including kale, arugula, and other lettuces. A few major grocery chains like Whole Foods already carry Plenty’s products, which have earned the company more than $900 million in investments. Now Walmart will own a piece of both distribution and retail sales.
“[The investment] creates the opportunity to actually get to scale, not just being a niche provider of expensive greens, as the category has somewhat been accused of in the past,” Plenty CEO Arama Kukutai said. “This isn’t just about high-quality, organic leafy greens. This is about getting to consumers on a more democratic and broad basis.”
What the burgeoning industry means for the future
The COVID pandemic created a heightened demand for food tech solutions as more consumers opted to eat at home and frequent grocery stores. Recent supply chain woes have only exacerbated the issue of food distribution.
Climate change activists also believe that modern disasters are directly influenced by rising global temperatures; so a farming alternative that produces food away from catastrophes like wildfires could help alleviate those concerns, as well.
So far, lettuces and herbs comprise most of the food tech space. Researchers want to lean into more high-value produce as the technology advances. Hundreds of millions of dollars in funding should help nudge that research along.
Walmart will grow their greens in an indoor farm in Compton, a city/suburb of Los Angeles.