A Funding Frenzy And SPAC Listings Are Fueling The Indoor Growing Industry. But Does It Make Financial Sense?

That’s a lot of expectation for an industry whose actual impact has been muted so far. The top 20 brands selling leafy greens grown indoors have about $135 million in U.S. retail sales from just 22,000 stores. None of the top brands have cracked more than 3,000 doors on their own—less than 3% of the nationwide grocery store footprint.

“This is a capital efficient way to scale — to tap the public markets,” says Aerofarms CEO and cofounder David Rosenberg, who is expecting his 17-year-old company to list in this summer, pending regulatory approval. “Whether we're in several hundred supermarkets or several thousand, we feel like several hundred was enough to prove the business model.

“With the immense demand, we can’t make enough product. We don’t have to worry about demand. We have to worry about high quality scale and supply and being financially sustainable,” AppHarvest president David Lee said at the Indoor Ag Tech Conference last week. “We are bankable now, at really affordable, non-dilutive structures that will get better and better. There’s a lot of room to run.”

This article was published in Chloe’s newsletter, Forbes Fresh Take, which is all about big ideas changing the future of food.

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