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.
That’s a huge benefit for grocery stores that are engaged in a constant struggle to respond to volatile produce prices. A freeze in Florida, where most of the country’s tomatoes come from in winter, can send prices soaring, while drought in California can double the prices of lettuces and greens. “Every fresh produce buyer knows from experience that prices are volatile thanks to the weather, availability or how successful the growing season is. And that’s never good for a retail business,” says Christian Haub, who served as chairman of the board of A&P and is now a senior adviser to BrightFarms. “This model gives you a kind of price guarantee over the long term.”
Another benefit: minimizing waste, or “shrink” as it’s called in grocers’ jargon. It takes at least a few days for most vegetables to travel from big farms out West to the rest of the country. That shortens the already limited time those vegetables can sit prettily on the shelf or in your refrigerator at home. On average, grocers have to throw out 6 percent of the produce they bring into the store. Tomatoes, one of BrightFarms’ products, are also one of the worst offenders. If buyers can cut the shrink by even 1 percent, they can offer better prices than the competition — or bump up profits.
Details about the District’s greenhouse are still hazy. BrightFarms hopes to announce its grocery partner by the end of this month and open the greenhouse in early 2014. Once it is in full production, the facility’s 1 million pounds of produce will be sold in city and suburban stores, and possibly to chefs and local residents as well. The project is expected to create 25 full-time jobs and 100 construction jobs, which is good news for more than just food lovers. This effort, says Stan Jackson, the president and chief executive of the Anacostia Economic Development Corp., “allows us to start building job opportunities in the area of agriculture that could lead to living-wage experiences for residents that have been victims of long-term and chronic unemployment.”
Why the District? When BrightFarms last fall approached 20 cities with plans to build urban greenhouses, the Department of General Services responded enthusiastically and quickly identified a vacant 10-acre lot in Ward 8 that could accommodate one.
“We didn’t want to go to a city that was going to bog us down in 10 months of red tape,” says Lightfoot. “The D.C. government has been accommodating and hospitable. On sustainability, D.C. is a real player.”
Black, a former Food section staffer based in Brooklyn, writes Smarter Food monthly. Follow her on Twitter: @jane_black.