In a Sept. 18 press release, the vertical farming venture announced it has received bankruptcy court approval to move forward on an asset purchase agreement with a group of investors led by Grosvenor Food & AgTech that also expands an existing relationship with Doha Venture Capital.
With its balance sheet strengthened by investor support, AeroFarms said the focus will now be on achieving profitability at its fully automated, 140,000-square-foot flagship operation in Danville, Va.
The facility – which AeroFarms has described as critical for meeting retail growth and category expansion – began shipping product to customers in September 2022 and is expected to be fully operational by the end of this year.
AeroFarms also announced it is halting spending on projects that do not contribute to the ramp-up of the Danville location, which includes efforts to expand in the Middle East, community-based farming initiatives and agricultural research.
“This marks a new chapter in the maturity and growth of AeroFarms,” stated Stephan Dolezalek, managing partner, Grosvenor Food & AgTech. “AeroFarms’ founders established the world’s most advanced vertical farming technology. We have now put in place changes needed to deliver on their vision. As an investor dedicated to creating a more sustainable global food supply chain, we see vertical farms as a critical part of the solution and are now focused on efficiently scaling our operations to deliver a market-leading product through a profitable business model.”
To lead AeroFarms through its next stage of growth, food and agriculture industry veteran Molly Montgomery was named as acting chief executive officer and executive chairperson of the company’s board of directors.
She takes the helm from AeroFarms’ chief financial officer, Guy Blanchard, who stepped in as president after David Rosenberg exited as chief executive officer in June.
Montgomery – who is also a venture partner with Grosvenor Food & AgTech – most recently served as chief executive at Custom Made Meals, a private-equity owned company in the fresh protein sector. Prior to that, she was CEO of Curation Foods, a provider of fresh, packaged vegetables and salad kits.
“As we face the mounting challenges of climate change and food insecurity, we need to rethink our global food supply chain,” said Montgomery. “AeroFarms is a testament to the innovative thinking required to deliver highly nutritious food in a more sustainable and cost-efficient manner.”
“The Danville Farm is an impressive operation, leveraging proprietary technology to deliver a fresh product that is less vulnerable to climate-related threats. I am looking forward to working with Guy Blanchard, the newly named AeroFarms President, and the rest of the AeroFarms team to complete the ramp-up of the Danville facility and to deliver a profitable operation that will enable future growth,” she said.
In July, AeroFarms announced plans to sell its Danville, Va., indoor vertical commercial farm and related assets under Section 363 of the U.S. Bankruptcy Code to AF NewCo Inc., a newly formed entity owned by a group of existing investors, including Grosvenor Food & AgTech, INGKA Investments Ventures US BV, Cibus Fund and ACEG GmbH.
According to filings with the U.S. Bankruptcy Court for the District of Delaware, AF NewCo’s $42.5 million bid includes $500,000 cash and eliminates $32 million in pre-bankruptcy debt. The lenders would also forgive the remaining balance on a $10 million bankruptcy loan as part of the deal.
After AeroFarms didn’t receive any other qualified bids, the auction was cancelled and the results of the 363 sale were approved by the court Aug. 23.
Founded in 2004 by Marc Oshima along with David Rosenberg and Edward Harwood, AeroFarms has revolutionized traditional farming operations via controlled environment agriculture. With commercial production in Newark and Danville, AeroFarms became a leader in smart, indoor vertical farming and its sustainably grown, award-winning leafy greens could be found at 2,000 retailers such as Whole Foods Market, Walmart, The Fresh Market and Amazon Fresh.
Since filing for Chapter 11, AeroFarms continued operating as normal and moved forward with several retailer expansions, announcing distribution deals with Walmart locations in the Mid-Atlantic, Stop & Shop supermarkets in the Northeast and Asian grocery chain H Mart.
During an interview last month with NJBIZ, Oshima, who is the company’s chief marketing officer, said seeking bankruptcy “was a last resort” and ultimately “a mechanism to be able to bring in this additional capital.”
“The core parts of the business have been very healthy and we’ll get a chance to really just focus on that right now and on how the work has been building and how it’ll continue,” Oshima explained. “The exhilarating part is the fact that we are expanding and that we can continue to think about how we bring our mission of growing the best plants possible for the betterment of humanity to life and really nurture that.”
“Right now, we’re making sure we have the right focus – which is to be really hyper-focused on the commercial side of the business,” Oshima explained. “What’s been really exciting for us has been how do we build an entirely new category at retail – taking what had traditionally been available for fine dining and now making it available for home dining. We’re creating all these meal occasions and usage and that’s what’s been exciting to see – how the consumers and our selling partners have embraced this.”