"Given its fluctuation, we are matching the imported products to break into the market. In Norway, supermarkets and wholesalers are all privately owned. These families are dictating the fruit and vegetable market, with price as their main objective. In October, we sold salads for 1 EUR, whereas next week, it will probably sell for 3 EUR. We're just following the prices. In the end, I can see it's worth it because, on average we have about a 10-12% premium if we follow the stock prices," says Marius Johansen, Founder, and CEO of Gront Fra Laks, a Norwegian vertical farming company.
Running two facilities, both located in the North of Norway, the Indre Kvarøy facility opened in July 2021, and the other facility in Fauske is set to open its doors in December 2023, one year after the Indre Kvarøy facility kicked off production. Starting by himself, Marius has seen his team grow fast in the past years, touching over 20 people in early 2024.
Preps are ongoing at the new farm
New farm on the way
Gront fra Laks' latest farm will be cultivating mushrooms, edible flowers, and leafy greens, bearing the name of the largest vertical farm in Norway, as Marius proudly shares. Covering 1500m2, the latest Bodø facility includes a 15-layered vertical farm, consisting of 22 growing racks, that can produce over 3,6 million heads of lettuce per year. Then, on top of the leafy greens, Marius and his team are growing microgreens and mushrooms, of which the first catches have been delivered in September.
Collaborating with fish farmers and other farmers on the island next to Bodo, as open-field producers got more vulnerable to the weather, more and more had to be imported. "Instead of building out the factory, we started looking at the mainland to add more farms there. That's where we had two options: build it next to the railway road or have extra logistics costs. Coincidentally, we found an empty facility for us to build and operate in."
Given the numerous options to expand, Marius sees Northern Norway as the main priority for the time being, given the cheap electricity and 'free' water. Electricity for EUR0,03/KwH. "You can't find these prices any lower than here."
CFO Jørgen Hopaneng selling lettuce and microgreens
Working with retail: not all roses…
Starting from Mo i Rana, which is positioned in the Mid-North of Norway, all the way up the outer ends of Norway, Gront Fra Laks supplies about 48% of the market up 'North.' Locking in an agreement with the largest retailers in the North, GFL is mainly working in three markets: small grocery stores, big supermarket chains, and the HoReCa market.
"Retailers believe in us, and that's not true of vertical farming per se. There have been so many vertical farms in Norway that have disappeared rather quickly after their inception, which made retailers more hesitant to enter new partnerships with vertical farms. However, we were able to find retailers that did believe our promise. Though, it doesn't come easy. You need enough capital to follow through and have a product before doing sales and overselling or underdelivering."
Setting long-term agreements allows GFL to be rather flexible on the delivery. For instance, when there's an oversupply, all partners will be delivered equally. However, in small supermarkets that are part of a chain, the biggest supermarket will obtain the most produce. Whereas the smaller stores will be distributed a bit less to even out the market, working together with different chains and shops.
All stores adopt the same prices for GFL's produce, yet, given the long-term agreement, Marius can adapt where possible, using this as a marketing strategy. Working closely with customers allows GFL to supply according to the set prices and the demand in the market at each time.
Testing over 100 cultivars, GFL tested numerous crops to date, from tomatoes, cucumbers, chili, and bell peppers to berries, however, the current products sold seem to be the most appealing ones to the regional customers.
"In the next three years, we are not going to add any new products but work on the basics first. We're going to expand into lettuces, salad(s) (mixes), mushroom, arugula, spinach, and watercress, supplying a stable six to eight products."