ImpactAlpha, February 4 – The future of food is… indoors. Cost-reduction, year-round availability and food-system resilience are driving demand for food produced in ‘controlled environments,’ aka greenhouses with high-tech features. “Every time a hurricane sweeps through Florida, you wipe out crops,” Equilibrium Capital’s Dave Chen told ImpactAlpha.
Portland, Ore.-based Equilibrium has invested more than $100 million in three large-scale greenhouse operations in California, Utah, and Minnesota and plans to commit $2 billion to indoor food production over the next five years The three facilities together cover about 200 acres (an American football field is roughly one acre). “This is economically driven sustainability,” Chen says. “It is a practical, at-scale, and closed-loop use of our natural resources.”
- Large-scale, high-tech. The firm has taken equity stakes in California-based Houweling Group’s greenhouse facilities in California and Utah (tomatoes, peppers and cucumbers) and Minnesota-based Revol Greens (lettuce and greens). It has also invested in a large hydroponic berry producer that Chen decline to name. Equilibrium’s investments will help Houweling and Revol double the size of their facilities over the next 12 to 24 months, and will support the berry producer’s expansion by more than 350 acres.
- Sunlight. One advantage over “vertical” farming: natural sunlight that reduces energy costs. Houweling’s Utah greenhouse uses waste heat and carbon dioxide from a nearby natural-gas power plant. Improved working conditions can attract workers in a tight labor market, Chen says. “Those are now permanent, year-round jobs.”
- Institutional shift. Equilibrium filed with the SEC last March to raise $250 million for its Controlled Environment Foods Fund; one institutional investor already onboard is LGIASuper, the Australian retirement fund manager.