June 21, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

As climate change intensifies and demographics shift, the world is seeing changes in food demand at the same time that it is seeing a constriction of arable land and natural resources. Controlled Environment Agriculture (CEA) provides a range of solutions that can decrease the environmental footprint of food production through the significant reduction of water pollution, the recycling of waste heat and carbon, and through increased efficiency in land and water use. As these issues continue to gain importance for both consumers and food producers, it is expected that advanced greenhouse technologies will see greater adoption and integration into our food supply chains. 

This also means that year-round production of fresh greens can be successful in a highly populated region that doesn’t have the natural climate to do so, such as New England and the U.S. East Coast.

Massachusetts-based CEA operator Little Leaf announced it has raised $300 million in new capital including equity financing led by The Rise Fund, TPG’s global impact investing strategy, and debt funding from Bank of America, an early debt investor in the company that was pivotal in fueling the brand’s growth and success in the Northeast U.S.

Little Leaf was founded in 2015 by CEO Paul Sellew, and Tim Cunniff, the former vice president of sales and marketing with Backyard Farms, with the intention of disrupting the West Coast-dominated lettuce industry (which accounts for 98 percent of the U.S. supply) by creating year-round efficient greenhouse production systems in New England.

The company’s entire growing process is hydroponic and hands-free, using sunlight intensified through high-transmission glass, solar-powered energy, and roof-captured rainwater for soil-less farming of baby greens. Once harvested (without ever being touched by human hands, and never being treated with chemical inputs), Little Leaf’s lettuce is packaged and distributed by truck to retail stores within 24 hours of being harvested.

“This funding from our partners at The Rise Funds and Bank of America marks a pivotal moment in Little Leaf Farms’ growth story,” said Paul Sellew, founder and CEO, Little Leaf Farms.

“We’ve seen, especially in recent years, how important locally grown food is to communities, and we’re proud to bring customers the freshest leafy greens that are harvested with 90 percent less water than conventional lettuces and shipped in less than 24 hours,” continued Sellew. “With this funding, we’re transforming the way millions of Americans eat and enjoy leafy greens, no longer relying on choices that have traveled thousands of miles across the country to reach them.”

The capital secured through this round will be used by Little Leaf to support aggressive growth and expansion plans for its farms and distribution, with the goal of making the company’s produce available to more than half the U.S. population by 2026.

This expansion process has already begun in McAdoo, Pennsylvania, where the company is doubling its acreage through the opening of a new greenhouse this summer. 

Scheduled to open in July on 180 acres, this new state-of-the-art hydroponic greenhouse will be the fourth for the company, and will effectively increase the brand’s retail presence by 50 percent, with products available in more than 3,500 grocery stores.

Encompassing Little Leaf’s cutting-edge technology, this site will include energy efficiencies in heating, cooling, and lighting (using solar panels to generate electricity), hands-free automated growing systems, and advanced data analytics capabilities.

“We have continued to transform the way consumers think about leafy greens, showing with just one bite that local and fresher is better,” commented Sellew. “This is just one step in our growth trajectory, and we’ll continue to strive for new innovation and broadened distribution to bring our lettuce to every consumer in North America.”

To-date, the company has grown its retail sales by more than 50 percent, and today, accounts for 42 percent of CEA lettuce produced in the U.S. (one of the fastest growing segments of produce production). And as the company’s customer base grows, it is planning to open several more greenhouses across Pennsylvania and North Carolina.

Aligned with this strategy is The Rise Fund. Founded in 2016 by TPG in partnership with U2’s Bono and Jeff Skoll, The Rise Fund focuses on mission-driven companies, such as Little Leaf,  that bring measurable social and environmental impact. As part of the partnership with the company, Maya Chorengel, co-managing partner of The Rise Funds, will join Little Leaf’s Board of Directors.

“Little Leaf Farms is driving significant efficiency improvements in the growing process for leafy greens by meaningfully reducing water usage and greenhouse gas emissions at scale,” said Chorengel. “The company’s mission to deliver local and sustainably grown lettuce year-round is well-aligned with The Rise Funds’ goal to accelerate the growth of companies that are meeting large-scale environmental and social problems with innovative solutions.”

She continued, “With this investment, we’re proud to extend Little Leaf Farms’ leadership in the market as it scales its business and continues to offer the best quality, reliability, and consistency to a growing customer base.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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