"There’s a megatrend for locally grown food, and the demand from consumers is accelerating at both grocery retail and foodservice channels. There’s been a common misconception that this locally grown food movement is mostly a coastal state phenomenon in the US. However, it’s actually far broader and can be seen in data all across the country," says Tobias Peggs, CEO at Square Roots, a US-vertical farming company.
A change for the industry
Square Roots is opening new farms in Ohio and Wisconsin: to meet the increasing demand for locally grown food in those states all year round. Their modular smart-farm platform means the company can quickly deploy a capital-efficient, commercial-scale farm in any city within months of entering a new market.
According to Tobias, this gives Square Roots the flexibility to build its farms practically anywhere and start growing food quickly to meet demand.
A case of unit economics and demand
The already constructed farms in Kenosha and Springfield each have the capacity to produce more than 2.4 million packages of herbs and leafy greens annually, all from a super-efficient footprint of just 10,000 sq ft. (1000m2).
The flexibility of the Square Roots platform means they can size the farm and create specific crop plans, to meet local demand. The new farms will grow herbs such as basil and cilantro alongside nutritious salad mixes and microgreens.
Square Roots has grown over 200 varieties in research and development. And not just leafy greens and herbs but also items such as tomatoes, beets, strawberries, and more. The question “what can Square Roots grow?” is not really one of capability, but one of unit economics and local demand, describes Tobias.
"As a company, we are very customer-focused in our approach to bringing new offerings to market. For example, this year, we’re expanding significantly in salad mixes based on a huge groundswell of interest behind their initial launch in late 2021. To be very honest, the strength of response did catch us a little by surprise! But salad is a massive market and one that’s seen very little innovation over the years. So our approach to mixing healthy microgreens and crisp baby leaves for a super-flavorful, nutrient-packed experience is definitely shaking things up," he states.
Tobias explains that indoor farming companies, in general, make a lot of similar claims about sustainability. Most CEA growers will talk about using less water and land than conventional field farms, as well as having shorter supply chains, reducing the need for transport.
He continues, "Those are all good talking points, indicating that we are all thinking about more responsible business practices as a sector. But, frankly, there’s not a lot of hard data or specific targets being mentioned. Indeed, the recent Global CEA Census report warns of an industry susceptible to excessive 'greenwashing.'"
Watershed project: CO2 footprint
Square Roots recently completed a project with Watershed, an independent third party, to measure their scope 1, 2, and 3 emissions (in accordance with the GHG Protocol standards). This has been done to quantify their current CO2e footprint and then develop a specific plan for reduction aligned with the goals of the Paris Agreement to halve carbon emissions by 2030.
Tobias adds: "Watershed ran a pretty extensive analysis, but the headline is that our net corporate emissions for 2021 were 4,747 metric tons of CO₂e. While this is a reasonably low number in absolute terms, it’s still the equivalent of around 2,000 round trips across the country in a passenger car. We’d like to get that to zero."
When digging into the details, the largest segment of Square Roots' emissions, at 47%, was the actual construction projects to build new farms (scope 3). That was followed by electricity consumption (scope 2) at 21%. The next largest buckets were delivery at 6%, consumables at 4.7%, packaging at 3%, and refrigerants used to cool the growing areas and store the harvested product at 3% (all scope 1 or 3).
"As the saying goes, once you’ve measured it, you can then start improving it. So, for example, for future construction projects, we’re already lining up suppliers of climate-smart building materials like low-carbon concrete for our foundation pads. Meanwhile, the path to reducing emissions related to our energy consumption is more obvious - i.e., to power our farms with onsite renewables," affirms Tobias.
Gordon Food Service partnership
Square Roots is now working alongside its strategic partner Gordon Food Service (GFS), to bring online a solar array with additional battery storage capability, which will power the latest farm, located at their distribution center in Springfield, OH.
These initiatives are just the tip of the iceberg, Tobias points out. "However, getting to carbon-neutral is not a quick hit. We’re now able to look at every aspect of the business through the lens of sustainability and start to make quantified reductions systematically."
For example, in March, Square Roots announced a new partnership with URB-E, initially in NYC, to deliver their products to over 100 local grocery stores utilizing their fleet of pedal-powered electric vehicles. Obviously, Tobias notes, the URB-E solution isn’t going to work for every Square Roots location (NYC is a pretty unique market given its density). "But, almost all of our retail partners in the city are within 5 miles of the farm. However, this does start the ball rolling on our aim for zero-emissions delivery, everywhere, eventually."
Products delivered by pedal-powered vehicles in collaboration with URB-E
As Tobias explains, GFS is a food distribution giant with over 200 distribution centers and retail stores across North America. The new farms in Wisconsin and Ohio are located on GFS distribution centers, meaning GFS customers now have access to Square Roots' fresh produce within hours of it being harvested. These farms are key deployments in what is a continent-wide program that will ultimately see Square Roots farms on every distribution center.
"I think that Rich Wolowski, President and CEO of Gordon Food Service, says it best when he says, “customers want fresh, locally grown food all year round - and we’re now on a path to do that at scale in partnership with Square Roots.” We are learning a lot from working with Gordon Food Service," Tobias says.
They are a 125-year-old company with family values and a long history of knowing how to get great food to customers reliably. Square Roots and GFS have a lot of shared values, including a willingness to experiment and innovate and to figure out together how to invest in a more sustainable food system, with local farmers at the center. "It’s a wonderful partnership."
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