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How the right sales channel can make or break your vertical farm

Produce is everywhere. But finding the right sales channel for your produce can be challenging. Like many countries, the food distribution system in the U.S. is complex, with many players. Creating your product is only half of the battle; the next step is to distribute and market it. This goes double for vertical farms or city farms that are trying to market a novel product to a narrow segment of consumers within the fiercely competitive produce market.

Why is your sales channel so important for vertical farming?
Sales are the lifeblood of every company. If you are not selling, you can be under tremendous pressure. If you are a business owner, you know what I mean. As you investigate your sales channel, try to identify a problem and come to market with a solution. I have seen several companies enter the retail landscape with no differentiated offers and, ultimately, price rules.

A shining example at Orlando World Center Marriott
One shining example is the recent partnership between Eco Convergence Group Inc. and Orlando World Center Marriott. Eco Convergence Group designed and installed a brand new vertical farm called HyCube, which was unveiled in April 2018. HyCube is a 2,000-square-foot self-contained hydroponics box situated on the expansive grounds of the Orlando World Center Marriott in Florida, USA. The HyCube produce is used in four of the hotel's restaurants.

With the door to the restaurant situated just outside the entrance to HyCube, the carbon footprint is practically negligible. "We call it pick to plate," says Cristian Toma, co-founder of Eco Convergence Group. "and this HyCube installation will cover most, if not all, of the hotel's needs for lettuce. We're talking well over 100,000 heads of lettuce being produced here per year and 13,000 pounds of herbs, greens, and edible flowers."

Farm-to-table experience
Latitude & Longitude is part of a revamp undertaken by Eric Martinez, World Center Marriott's executive chef. "It's the biggest restaurant we have in the building, and we wanted something that has the feel of farm-to-table," Martinez said. Consumers will pay premium prices for farm fresh food and are more likely to buy locally grown produce that is sustainably grown. Besides the advantage of same-day harvest and delivery, HyCube can supply exactly the amount of food the restaurant needs in a certain period because they can precisely control the yield.  

The demand for locally-grown produce
The popularity of locally grown continues to increase, which is driving produce buyers to look for alternative sources of supply. At the same time, consumers are looking to support their local farming companies. They want to know the farm and the farm's story, so they can feel confident they are getting fresher, more nutritious food that's pesticide free. The city farming concept can speak directly to this demand and is a valuable marketing asset for marketing strategies. Retailers understand that there is typically a premium associated with this type of consumer-facing product. It is also a retailer's stronghold, and they must win in this segment.

Tips for building a vertical farm sales channel
Of course, not every vertical farm has the luxury of having a customer right on their doorstep, but the Marriott did not just fall into the hands of the Eco Convergence Group. They carefully searched for the right partner and collaborated intensively to develop the farm-to-table strategy. Here are a few tips for building a vertical farm sales channel based on what we have learned from customers over the years:

  • Leverage 'local' and other consumption trends
  • Start small with enough capital to grow big
  • Drive value versus price
  • Bring a better variety to market
  • Make produce fun and convenient
  • Think beyond conventional markets to producing crops for nutraceuticals, pharmaceuticals, fragrances, flavor chemicals, resins, and other compounds
  • Co-market with the sales channel
  • Create in-store marketing

It takes a great deal of work, money, and expertise to professionally market food products to end customers, so it is necessary to involve experts in the process.

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