In an effort to reduce time, distance and cost in the produce supply chain, a New York firm is proposing to finance, build and operate greenhouses on the rooftops of supermarkets. Participating supermarkets will have no upfront costs, but they do need to agree to buy the fresh produce grown on their property.
Paul Lightfoot, president and chief executive officer of BrightFarms LLC in New York City, has been pitching the idea to retailers since he joined the firm on a full-time basis in January.
“The response has been remarkable,” he said. “I have eight letters of intent from supermarkets wanting to proceed, and we have four sites in the design phase. We should have a site up and running and in production by the spring of 2012.”
The company recently began working with Christian Haub, the former CEO of The Great Atlantic & Pacific Tea Co. Inc. He has become a senior adviser for BrightFarms and is currently presenting the concept to senior executives at supermarkets across the country. Mr. Haub said that the concept has generated a lot of interest from the retailers with whom he has talked. “They think it is a very innovative and attractive idea. Many have asked if they can be the first in the market in their particular area.”
BrightFarms LLC was formed through the merger of Better Food Solutions and BrightFarm Systems in January 2011. From 2008 to 2010, BrightFarm Systems operated as a commercial design consultancy providing technical services in support of rooftop greenhouses. BrightFarm Systems, in turn, grew from New York Sun Works, a non-profit organization set up in 2006 by environmental engineer and urban farming visionary Ted Caplow, who is chairman of BrightFarms LLC. The company was involved in the development of several rooftop greenhouse projects.
Mr. Lightfoot said that the rooftop greenhouse business model is patterned after a similar business plan that utilizes large rooftops for solar installations. “The guy who pioneered that company is a friend of mine, and he got me thinking about doing the same thing with BrightFarms.”
BrightFarms’ pitch is that it offers a turnkey operation that will enable a retailer to reduce the food miles on some of the fresh fruits and vegetables it sells while also improving its bottom line and having a good, environmentally friendly story to tell.
Mr. Lightfoot acknowledged that the public-relations angle is an important factor, but he said that everyone with whom he has spoken said the idea has to make commercial sense first. What BrightFarms proposes to do is work with a supermarket retailer as the firm is building a new store. “A typical supermarket is about 50,000 square feet, and our greenhouse model is one acre, which is 43,000 square feet,” he said.
As the building is being designed, the greenhouse will be part of that design in an ideal situation. Mr. Lightfoot noted that in this early phase of sales, most of the interested retailers want to retrofit an existing supermarket. The BrightFarms executive said that new construction is easier and cheaper, but the company is currently designing several retrofits so it can get a project going.
While the greenhouses will have the size and capacity to produce many different crops, Mr. Lightfoot said that economies of scale are best realized if each rooftop greenhouse is limited to two or three high-volume sellers such as tomatoes or lettuce. “It works best if a supermarket chain has several of these greenhouses in a tight geographic region so that each greenhouse can harvest just a couple of crops and service several stores in the area,” he said.
In that model, a supermarket chain with three greenhouses at three different locations could get a half-dozen local produce items for a dozen or more of its stores.
Each rooftop “farm” will be managed and run by a local grower, according to Mr. Lightfoot. While BrightFarms will have a master grower on staff who will have management responsibility, Mr. Lightfoot said that the firm will develop partnerships with local growers to provide the labor and farming expertise. Hydroponic technology will be the growing method, and the master grower will provide the expertise needed to grow in that medium.
The BrightFarms executive envisions that the greenhouse yield will be harvested and packed on the roof and delivered to the store’s loading dock just as would any other local produce.
Mr. Haub said, “What attracted me to this idea is that it solves a number of issues that retailers are currently dealing with. It reduces the number of food miles for some of their produce items, it reduces their carbon footprint and it gives them a local source for high-quality food.”
Mr. Lightfoot believes that the idea will work best with highly perishable products and in areas that are not close to major growing regions. For that reason, the early adopters of the idea tend to be in the eastern half of the United States rather than in California, for example. “So far, all the people we are working with are either in the Midwest or Northeast.”
Though he declined to name retailers, he said that those eight letters of intent include some of the nation’s larger retailers as well as a retailer with only three stores.
Mr. Lightfoot typically presents his idea to the top produce executive at each retail operation, while Mr. Haub works to get senior management approval. Mr. Lightfoot said that the produce executives have exhibited great excitement for the project and chiefly look at the concept as a way to provide local product with a good price point to their customers. Mr. Haub said that projects such as this need senior management involvement on the front end with implementation turned over to the real estate and produce department executives once it has approval.