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Local Bounti recently celebrated its 5th anniversary:

Greenhouses, a little from vertical farms, and leafies: 5 years in the US CEA industry

CEA operator Local Bounti has recently celebrated its 5th anniversary, which is not an easy feat in such a challenging industry. “At the very beginning, I had experience in plant propagation, vertical farming, and greenhouse production,” says David Vosburg, Chief Innovation Officer at Local Bounti. “When we actualized the initial concept and proved in Montana that it could be operationalized and scaled, it was a very exciting first step for us.”

Local Bounti has indeed inscribed its mission into its very name: bringing locally grown produce across the United States. To achieve that, they have come up with a greenhouse design that combines ‘traditional’ horticulture with vertical farming that can even be implemented into an existing infrastructure. “We have established that this works at scale and that this drives economics at scale. We firmly believe this will transform indoor agriculture.”

Customers and unit economics
David explains that the Local Bounti recipe is based on two main pillars. “We were founded on two north stars: customers and unit economics. If those are your guiding lights, then you will create value.” According to him, that isn’t very common, as folks get easily distracted and tend to pursue different objectives than those. “Technology is a tool, not an end. Sustainability is a benefit, but economics come first.” This is partially true if one looks at the sheer quantity of greenwashing and technological accelerationism blowing in this space. “That has caused massive self-deception for a long time. People fell in love with technology and sustainable outcomes. For instance, water savings are a huge result, but unit economics must come first. We focus on that and create great financial partners for us, people that believe in our mission, and the sustainable outcomes will follow.”

To better drive Local Bounti towards those goals, a new CEO has recently joined the company: Anna Fabrega. “Her vision completely aligns with Local Bounti. She is laser-focused on unit economics and profitability, minimizing capex and opex while still being productive. She asks all the right questions and provides the right guidance to build upon our momentum. On top of that, she ran Amazon Fresh and the Freshly Meal Kit delivery company. That shows she understands the importance of being customer-obsessed, of focusing on quality and consistency.”

The US market for CEA
While achieving quality and consistency may be easy for Local Bounti thanks to their cultivation concept, it may not be that easy to compete with other growers who sell at a lower price point. “In North America, if you can grow a good product, you can generally sell it for a reasonable price,” says David. “We price the same as organic on the shelves. That means that consumers can base their decision of what to buy on different attributes than price. And when it comes to that, CEA-grown leafies are no match.” And what about the competition from outdoor growers? “Outdoor growers are realizing CEA is continuing to eat off the market share of their premium segment. They simply have no way to stop that market share slide. And you can see that some outdoor growers are partnering with folks like us to bring CEA products to the market.”

That, anyway also means that there’s more competition in the CEA space itself. “Back then, you didn’t have national competitors, but now it’s getting challenging. You need to have a way to produce more with less. It’s all about the ROI: those who can produce an ounce for less are going to come out on top.”

Five years may sound quite substantial, but in the great scheme of things, it’s just a puzzle piece of the bigger picture, and Local Bounti is very much aware of that. “Right now, we are busy expanding. We got our last phase coming online for our new Georgia facility. At the same time, we are starting in Texas this quarter and in Washington Q1 of next year. We have a lot of momentum as we ramp up our facilities and continue our progression.”

For more information:
Local Bounti