US vertical farming company Plenty Unlimited Inc, which had raised around $940 million from high profile investors including Walmart and Jeff Bezos has filed for Chapter 11 bankruptcy protection.
In an official statement, Plenty’s Marketing and Communications Director, Erin Santy, said, “This is a challenging time for the vertical farming industry and Plenty is not immune from those challenges or market dynamics. After evaluating all of our strategic alternatives, we have determined that pursuing a restructuring process is in the best interests of Plenty and all of our stakeholders. The restructuring process will better position us to continue working toward our mission, starting with the year-round production of premium strawberries in our innovative vertical farm in Virginia.”
Under the restructuring, the company hopes to secure $20.7 million in debtor-in-possession (DIP) financing to support operational continuity during the court-supervised restructuring process and will maintain its vertical strawberry production site in Richmond, Virginia, and its plant science research and development facility in Laramie, Wyoming. It is believed that other operational assets, such as its facility at Compton, California, are likely to be sold.
The company was founded in 2014, but as energy prices rose and the sale of product into big retailers failed to occur as quickly as expected, cash flow suffered. The insolvency stands in stark contrast to a Forbes article in 2022 when key backers SoftBank stated that Plenty had “the potential to revolutionize the produce supply chain.”
Observers point out that Plenty is not the first large scale vertical farming company to fail. Rien Kamman, CEO of Source.ag, told FreshPlaza, “In the last two years investors such as SoftBank Group Corp., Walmart, and Jeff Bezos lost $2.7B due to bankruptcies of just 4 farming companies: Plenty ($1B), AppHarvest ($700M), Bowery Farming ($700M), and AeroFarms ($300M).”
Others in the industry have previously warned about indoor farming companies looking to reinvent the wheel due to their massive cash reserves from fundraising. One company reportedly spent months ‘reinventing the pipe’ according to the boss of an indoor farm in the UK.
The factor which unites successful vertical farms on both sides of the Atlantic is a focus on growing crops commercially into existing markets, rather than speculating about technology or unrealistic product premiums. Nona Yehia, CEO of Vertical Harvest Farms which has been producing crops for local markets in Wyoming since 2016 told FreshPlaza, “I am tired of seeing headlines that suggest vertical farming doesn’t work when what’s really broken is the business model… At Vertical Harvest Farms, we’ve taken a different path. We’ve spent nearly a decade operating a commercial vertical farm. We’ve made mistakes, learned hard lessons, and used them to build a model rooted in community, efficiency, inclusion, and long-term viability. But headlines like these? They make our job harder – harder to raise capital, harder to gain trust, harder to scale.”
Others, such as Charlie Guy, CEO of LettUs Grow, believe that indoor farming has a role, but will not replace all other forms of crop production. “The future will be hybrid, a mix of vertical, horizontal, polytunnel, greenhouse, and fully indoor. Alongside traditional, seasonal field growing, of course,” he said.
