How the right sales channel can make or break your vertical farm

Produce is everywhere. But finding the right sales channel for your produce can be challenging. Like many countries, the food distribution system in the U.S. is complex with many players. Creating your product is only half of the battle; the next step is to distribute and market it. This goes double for vertical farms or city farms who are trying to market a novel product to a narrow segment of consumers within the fiercely competitive produce market.

Blake Lange comes from a long line of farmers, so he understands the challenges of running a farming business. He has a Bachelor of Science degree in Entrepreneurship from the University of Illinois at Chicago. Working in the US as a Business Development Manager for Vertical Farming, Blake feels he is basically a business matchmaker. He matches customers who have a vision for creating a vertical farm with specialists on Philips LED lighting who can help make their enterprise profitable.

Why is your sales channel so important for vertical farming?
Sales is the lifeblood of every company. If you are not selling, you can be under tremendous pressure. If you are a business owner, you know what I mean. As you investigate your sales channel, try to identify a problem and come to market with a solution. I have seen several companies enter the retail landscape with no differentiated offer, and ultimately price rules.

A shining example at Orlando World Center Marriott
One shining example is the recent partnership between Eco Convergence Group Inc. and Orlando World Center Marriott. Eco Convergence Group designed and installed a brand new vertical farm called HyCube™, which was unveiled in April 2018. HyCube is a 2,000-square-foot self-contained hydroponics box situated on the expansive grounds of the Orlando World Center Marriott in Florida, USA. The HyCube produce is used in four of the hotel's restaurants.

With the door to the restaurant situated just outside the entrance to HyCube, the carbon footprint is practically negligible. "We call it pick to plate," says Cristian Toma, co-founder of Eco Convergence Group. "and this HyCube installation will cover most, if not all, of the hotel's needs for lettuce. We're talking well over 100,000 heads of lettuce being produced here per year, and 13,000 pounds of herbs, greens, and edible flowers."

Farm to table experience
Latitude & Longitude is part of a revamp undertaken by Eric Martinez, World Center Marriott’s executive chef. “It’s the biggest restaurant we have in the building, and we wanted something that has the feel of farm to table,” Martinez said. Consumers will pay premium prices for farm fresh food and are more likely to buy locally grown produce that is sustainably grown. Besides the advantage of same day harvest and delivery, HyCube can supply exactly the amount of food the restaurant needs in a certain period because they can precisely control the yield.

The demand for locally grown produce
The popularity of locally-grown continues to increase, which is driving produce buyers to look for alternative sources of supply. At the same time, consumers are looking to support their local farming companies. They want to know the farm and the farm’s story, so they can feel confident they are getting fresher, more nutritious food, that’s pesticide free. The city farming concept can speak directly to this demand and is a valuable marketing asset for marketing strategies. Retailers understand that there is typically a premium associated with this type of consumer facing product. It is also a retailer’s stronghold and they must win in this segment.

Tips for building a vertical farm sales channel
Of course not every vertical farm has the luxury of having a customer right on their doorstep, but the Marriott did not just fall into the hands of the Eco Convergence Group. They carefully searched for the right partner and collaborated intensively to develop the farm to table strategy. Here are a few tips for building a vertical farm sales channel based on what we have learned from customers over the years:

Leverage ‘local’ and other consumption trends
Start small with enough capital to grow big
Drive value versus price
Bring a better variety to market
Make produce fun and convenient
Think beyond conventional markets to producing crops for nutraceuticals, pharmaceuticals, fragrances, flavor chemicals, resins and other compounds
Co-market with the sales channel
Create in store marketing

It takes a great deal of work, money and expertise to professionally market food products to end customers, so it is necessary to involve experts in the process.

Work with a knowledgeable partner
Our plant specialists at Signify can help you on your journey. We carry out trials to improve the plant taste, quality, uniformity, color and nutrient content of specific crops. We explore different light strategies that give more control over yields, growth cycles and shelf life. All this information can give you control over the value proposition you can offer to your customers.

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