An Albertsons store in Laguna Niguel, California
Scott Mlyn | CNBC
Vertical farming company Plenty, an Ag-Tech unicorn backed by SoftBank, announced a partnership with Albertsons on Wednesday, marking the company's first major retail deal.
Under the multi-year deal, Plenty will stock 430 Albertsons stores across California with four types of greens – arugula, baby cabbage, crispy lettuce, and mizuna mix – that cost between $ 4 and $ 5, in line with other organic greens.
The deal is a defining moment for the data-driven company that uses machine learning and bespoke lighting to tweak the taste. Analytics is deep in the company's DNA. It has a roster of engineers, a fair proportion of whom came from Tesla in the early stages of the business. You work with farmers, including the company's two co-founders, and sensory experts. The company says its long-term mission is to bring nutrient-rich products to 500 urban centers around the world.
The Albertsons deal is the first big step towards that goal. What follows is a test run with the grocery chain that began before the coronavirus pandemic forced people to stay home.
Plenty Co-Founder and CEO Matt Barnard said the company could supply Albertsons' stores without disruption, which is critical evidence of Plenty's value for the grocer.
"Your customers loved it and it flew off their shelves and at a category-leading pace," said Barnard. With supply chains disrupted in the early days of home ordering, Plenty built stability by keeping the shelves in stock. "There were times when there was just Plenty on the shelves," he said.
His supporters include a long list of high profile investors, including Jeff Bezos and Eric Schmidt. Last fall, the company raised $ 175 million in a Series C deal, bringing the total funding to $ 400 million and valuation at $ 1.05 billion, according to Pitchbook data.
With Plenty, which currently supplies more than a dozen Albertstons stores, faced the daunting task of supplying hundreds more, the recent capital injection will help fund the effort. Barnard estimates it can take up to two years to fully ramp up production.
To supply all stores, Plenty will rely on its newest fully autonomous farm in Compton, California, which is still under construction. It's also unclear when it will open. According to Barnard, the South San Francisco commercial farm called Tigris is currently producing 200 plants per minute and continues to improve yield year after year.
"If you look at four years ago, our revenue was a third of what it is today. Our returns jump from year to year," said Barnard.
Many faced the challenge of doing too much and too quickly. Last year, plans to open another indoor farm in Seattle were postponed to prioritize efforts in Southern California.
Many also have excellent competitors in vertical farming, including Kimbal Musk & # 39; s Square Roots and Larry Ellison's Sensei Ag, Barnard said. But Barnard, who grew up on a farm, is unfazed by the competition and says Plenty's unique focus on taste is what makes its products so unique.
"People are not used to eating vegetables out of the box with their fingers without a fork, dressing or other ingredients because we are not used to them tasting so fantastic," he said. "When you add that 365-day resiliency, that really is the difference from what's on the shelves right now."
Correction: Last fall, Plenty raised $ 175 million in a Series C deal, bringing total funding to $ 400 million and valuation to $ 1.05 billion, according to Pitchbook. In an earlier version of this story, the timing of the funding round, its stage, and the people involved was incorrectly stated.