February 18, 2021

photo credit: Little Leaf Farms

By Lynda Kiernan, Global AgInvesting Media 

Equilibrium Capital has led $90 million in debt and equity financing for Massachusetts-based greenhouse operator Little Leaf Farms. Joining Equilibrium was Copperline Capital, Pilot House Associates, and founding investor Bill Helman. 

Bank of America, which has also committed $20 million to the company to-date, has earmarked an additional $20 million to invest in support of the company’s growth strategy.

“Equilibrium Capital’s growth equity investment in Little Leaf Farms brings together a major player in next-generation indoor agriculture with the leader in CEA (controlled environment agriculture) investments,” said David Chen, CEO, Equilibrium Capital, who under the terms of the investment will be joining the Board of Little Leaf Farms. “Little Leaf Farms is revolutionizing the industry with its sustainable indoor growing technologies, to grow fresh, nutritious great tasting lettuce and mixes.”

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 supplemented with LED lighting and rainwater captured on its roof, meaning the company rarely needs to use groundwater. Once harvested, Little Leaf’s lettuce (baby greens in three varieties) is packaged and distributed by truck to retail stores within 24 hours of being harvested.

“We are supportive of Little Leaf Farms’ efficient growing methods, using sunlight and captured rainwater to grow delicious lettuce that only travels locally so it remains flavorful,” said Randy Mitchell, senior vice president, global commercial banking, Bank of America. “We believe in the company’s environmentally and socially responsible mission as they expand into new markets on the East Coast.”

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. 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 across the U.S., the EU, Japan, and other major markets.

“Almost every part of the ag value chain is in flux,” Chen told the hundreds of attendees who gathered for the first virtual Global AgInvesting event in August 2020. 

“Where we grow our food, how we grow our food, how we get our food and what we’re eating is all changing simultaneously right now, which we think is one of the most exciting periods in agriculture. The punchline here is that sustainability and technology are the drivers of this change and …that ag is becoming an infrastructure sector.”

“…indoor farming is more than just putting a roof over the land,” Chen continued during Global AgInvesting 2020. “Controlled Environment Agriculture is not about land, or geography or soil or climate; it’s the ultimate in BYO and DIY – bring your own climate, soil – do-it-yourself. It means that growing can be done anywhere – the Arabian desert to the fertile Midwest. It’s managing a technology firm that’s inside a farm which requires ‘riding the technology rate of change’.”

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.

Since its launch, Little Leaf Farms has experienced rapid growth. From 2019 to 2020 the company doubled sales to reach $38 million and its distribution network has grown to 2,500 stores across New England, New York, New Jersey, and Pennsylvania.

Now with three greenhouses covering 10 acres in Massachusetts, the company is the best-selling CEA packaged salad brand in the Northeast, producing 2 million packages of lettuce per month.

Furthermore, the company acquired 180 acres of land in Pennsylvania last year on which it plans to build another hydroponic facility, and announced plans for yet another in North Carolina to expand geographically into the U.S. Southeast. 

“Creating local, year-round food economies just makes sense,” said Sellew. “Over the last five years, we’ve focused on the most efficient and advanced growing technologies. That way, we can grow the highest-quality lettuce, at a scale and affordability that will allow Little Leaf Farms to become the best-selling packaged salad on the East Coast.”

“Having Equilibrium Capital, our existing shareholders and Bank of America so solidly behind us as we expand is critical to our momentum,” continued Sellew. “Even as we grow, we know we will continue to give our loyal and happy customers the best, most flavorful lettuce they have ever tried. We are very excited about our future.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.