On first meeting, Paul Lightfoot is not necessarily the one you’d pick to drag the grocery business out of the dark ages. The 43-year-old has an earnest manner and a penchant for blue button-down shirts. But he’s also food lover who regularly drives his wife crazy by combing through the pantry and throwing out processed snacks that, in his mind, don’t qualify as food.
After a decade developing retail supply-chain software, Lightfoot is just as comfortable talking about “sales variability” and “disintermediation” as he is about heirloom vegetables. His brain seems trained to zero in on the tiny gaps in a supply chain that, once closed, can over time save companies millions of dollars. That is why, when he turned his attention to distributing fresh produce, he came up with a concept that would promise to accomplish two goals: allow big grocery chains to embrace the craze for local food and also improve the slow-growing industry’s bottom line.
That concept was BrightFarms, a New York-based company that builds, owns and manages urban greenhouses to sell lettuces, tomatoes and herbs to grocery stores. Launched in 2011, BrightFarms already has a Pennsylvania facility that serves 10 grocery stores and has deals to build seven more in cities that include Oklahoma City, St. Louis, St. Paul and now the District. On Thursday, Lightfoot will join D.C. Mayor Vincent Gray to announce a plan to build a 100,000-square-foot greenhouse in Ward 8 that will grow as much as 1 million pounds of produce a year for local grocery stores.
For years, sustainable-food advocates and environmentalists have preached that businesses should “do the right thing” by investing in costly projects for the good of the planet that would, along the way, also lead to better-tasting food. But BrightFarms isn’t relying on ethics or morality to drive its business. Growing locally eliminates the ever-rising costs of shipping produce thousands of miles. It also ensures that what is on the shelves lasts longer, which helps to reduce waste, both at the store and in a consumer’s refrigerator.
All this, and BrightFarms charges the same as or less than traditional suppliers. “Our whole shtick is to provide better food that is more profitable,” says Lightfoot.
BrightFarms’ hydroponic greenhouses — built on the grocery store’s rooftop where possible — boast no revolutionary technology. The innovation — or what Lightfoot calls the company’s “secret sauce” — is in its business structure. Though the greenhouses are built for stores, the stores don’t pay the construction costs, a huge selling point in a conservative industry where net profits average just 1 or 2 percent per year. The industry’s last big innovation? The implementation of the bar code.
BrightFarms also brings in a contract farmer to grow the vegetables, so already-stressed retailers don’t have to become vegetable growers. In return, the grocers sign a 10-year contract to buy lettuce, tomatoes and herbs from BrightFarms. That is significantly longer than most other supplier contracts. But BrightFarms guarantees that over time its prices will not exceed average inflation. If future price increases follow historical patterns, its product will cost a fraction of the market rate by 2030, according to the company’s projections.