Walmart invests in vertical farming startup Plenty
Plenty uses vertical farming to grow a high volume of leafy greens throughout the year. He plans to use the technology to grow other crops, including strawberries and tomatoes.
Photo: Spencer Lowell for Plenty
Walmart said Tuesday it is investing in vertical farming company Plenty and plans to make the start-up’s leafy greens available in all California stores later this year.
The big-box retail giant did not disclose the size of the stake or the terms of the business deal, but said a Walmart executive would join Plenty’s board. Walmart’s investment is part of a $400 million funding round for Plenty led by One Madison Group and JS Capital, with participation from SoftBank Vision Fund.
With the move, the nation’s largest grocer dives into a hip area of food technology that brings farm produce closer to customers’ kitchen tables to increase freshness, limit waste and promote sustainability.
Food and agriculture start-ups have become a hot area for venture capital during the pandemic, especially as consumers eat at home more often and retailers face food security issues. Supply Chain. Indoor farming has also become a potential solution to unpredictable weather and natural disasters, such as the California wildfires, fueled by climate change.
Walmart has traveled the world, met with vertical farming companies and learned about the new way of farming over the past four years, said Martin Mundo, senior vice president of U.S. product marketing. Walmart sees the approach as an eco-friendly way to ensure a year-round supply of high-quality, affordable products, he said.
Vertical farming has several key advantages over traditional farms, according to a Morgan Stanley Research report on the future of food. Crops can grow faster and with greater yield because they depend on synthetic light sources instead of sunlight and are not subject to sudden weather changes. Crops can also be grown without pesticides, which eliminates runoff that can harm wildlife and soil quality. And consumers typically see longer shelf life for their purchases because crops don’t spend long hours in the back of a truck or experience temperature changes from transportation.
Plenty’s lettuce varieties, which include kale, arugula and spring mix, are grown without pesticides. The brand is sold by select Albertsons stores and Amazon-owned Whole Foods outlets and delivered by Instacart and Good Eggs grocery stores. To date, Plenty has raised over $900 million, including the latest investment.
Plenty CEO Arama Kukutai said the deal with Walmart is a step forward in making fresh, clean produce more accessible and affordable.
“It creates the opportunity to grow, and not just be a niche supplier of expensive greens, as the category has been somewhat charged in the past,” he said. “It’s not just about high-quality organic leafy greens. It’s about reaching consumers on a more democratic and broader basis.”
San Francisco-based Plenty is one of many startups involved in vertical farming. Its competitors include Bowery Farming, AeroFarms, PlantLab and BrightFarms.
Until now, lettuce and herbs have been the main crops grown indoors, but companies are looking for ways to grow more high-value produce.
Starting this year, Walmart’s 250 stores in California will have leafy greens grown on a vertical farm in the town of Compton, in South Los Angeles. Some greens will be sold under Plenty’s brands and others under Walmart’s private label.
So far, all of Plenty’s farms are in California, but the company plans to expand to the East Coast soon and start growing other types of crops, Kukutai said. He said Plenty plans to sell strawberries and tomatoes to customers next year.
Kukutai took the reins as CEO of Plenty this month, after investing in the company through his food and agriculture technology fund, Finistere Ventures. Other past investors include Eric Schmidt’s Innovation Endeavors, Jeff Bezos’ eponymous fund Bezos Expeditions and Driscoll’s, a major producer of fresh berries, among others. The California-based company has also struck a deal with Plenty to grow its strawberries indoors.
—CNBC Lora Kolodny contributed to this report.