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US (CA): Suncrest USA expands Silicon Valley operations
“With strong sales volume and brand recognition for Suncrest Lettuce in the SF Bay Area, we are now looking to add more growers to our family of licensees,” said Jim Day, founder & CEO, Suncrest USA Inc. “For the moment, we are focused on West Coast markets, but we expect to be on the East Coast in just a few more years.”
Transformational business model turns around struggling local greenhouse operations
Suncrest’s patent-pending, deep-water culture (DWC) hydroponic systems enable local greenhouse growers, many of whom are struggling financially, to transform their underperforming greenhouses into high-value, high-volume, year-round production facilities. Suncrest then cross-trains the grower, purchases most of the production, and develops local marketing, sales, and distribution techniques.
Suncrest’s first licensee was a small greenhouse operator on Whidbey Island, north of Seattle. Initially established as a pilot project and proof of concept for Suncrest’s initial investors, the operation is now operated by Suncrest subsidiary Whidbey Growers LLC. as an R&D operation to test varieties and technology for Suncrest’s larger licensees. With its licensing model established, technology proven, and with demand already strong for its high-quality lettuce, Suncrest went after its next major milestone — a scaled-up operation.
Suncrest establishes Silicon Valley operation and scales up to meet lettuce crop shortfall
In 2015, Suncrest identified the San Francisco Bay Area, with its persistent drought and obsession with high-quality local produce, as its next beachhead. Earlier this year, Suncrest entered a key phase of its growth with the successful completion of a 55,000 square-foot pilot with Oku Inc. of Pescadero, Calif., a family-owned cut-flower operation established in 1902. With 440,000 square feet of greenhouse space, Oku represents the perfect licensing partner since South American flower imports have eaten into its profits.
The initial Oku-owned Suncrest operation, called Pescadero Growers, is a 55,000 square-foot DWC hydroponic lettuce operation. With the help of Suncrest’s marketing and distribution expertise, Pescadero Growers is repositioning itself to become a major player in the new, local, sustainable agriculture movement.
Suncrest has already established a local market for Pescadero Growers by signing up premium grocers and upscale restaurants such as Chez TJ (Michelin Star), Epic Steak House, Lexington House, Madera on Sand Hill (Michelin Star), Monsieur Benjamin, Parcel 104, Sharon Heights and Los Altos Country Clubs, Tender Greens, The Fairmont San Francisco, The Ritz Carlton (San Francisco and Half Moon Bay), Woodside Village Pub, and Zume Pizza in the Bay Area. Meanwhile, retailers such as Bianchini’s Markets, Robert’s Market of Woodside, and Sigona’s Markets are now offering Pescadero Growers lettuces.
“In the past, when we grew flowers, it was food for the soul,” said Steve Oku, owner of Pescadero Growers, and former president of the San Francisco Flower Mart. “But now, we are also growing food for the body — we are now nurturing both body and soul.”
Suncrest expands Silicon Valley operations, looks for next launch-pad
The recent persistent and strong rains, and shorter growing season, in Arizona and California have led to shortages of several crops, including lettuce. And with production constrained, wholesale prices have been rising. Today, Pescadero Growers’ large hydroponic tanks, where the lettuce floats on nutrient-rich rafts, can produce nearly 1MM heads of lettuce per year. But after an expansion currently underway, it will be closer to 2.25MM heads per year.
Currently, most of the volume is Bibb lettuce, Red Romaine and Green Romaine. Now that Suncrest has successfully completed year-round greenhouse production at scale, and has demonstrated an ability to build brand and win customers, the company is looking for its next scale-up location.
“Sustainable, indoor agtech has come into its own as an industry,” said Day. “What differentiates Suncrest is its scalable licensing model that not only includes turnkey hydroponic systems, but also builds brand and market share within each local market. This is the best of all worlds for the grower: they can now grow a branded product rather than a commodity, using tools and techniques that substantially increase their revenues and profit per square foot.”
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