The new farm in Ohio is the exact blueprint of its Kenosha, Wisconsin, farm opened in late January 2022, which uses 20 converted smart shipping containers capable of producing 2.4 million packages of salad mixes and herbs per year.
Once fully operational, the Kenosha indoor farming facility will serve surrounding major cities in Wisconsin and Chicago both in grocery retail and foodservice outlets, said Tobias Peggs, co-founder and CEO of Square Roots.
Now with its fifth farm in Springfield, Ohio, Peggs said the company has a reference point facility design to continue expanding throughout the Midwest and into other regions where its partner Gordon Food Service has a market presence.
"A lot of people in indoor farming are very fond of talking about how big they’re going to be two to three years from now, and our approach at Square Roots is to keep our heads down and just keep opening farms rather than make any wild proclamations about how big we’ll be in a year," Peggs told FoodNavigator-USA.
Expanding into new markets isn't as much of a costly endeavor for Square Roots compared to some other indoor farms due to its modular system in which the company can start small with a few retrofitted smart-tech enabled shipping containers and expand capacity with demand in the local area.
"One of the beauties with our modular systems is that we can scale any deployment and right size it to meet that local demand," said Peggs.
Local supply chains: 'We basically have zero food waste in our system'
According to Peggs, the strategic location of its modular indoor farm systems placed near cities and major metropolitan areas has accelerated and strengthened local supply chains for retailers and foodservice customers.
"The whole idea is to shorten the supply chain for food wherever we go. We basically have zero food waste in our system, and it’s all because we’re locating these farms close to cities," he said.
And taking into account that Square Roots products reach store shelves and restaurant kitchens in as a little as five hours in some cases, the end product stays fresher for longer -- a value proposition that has become increasingly important to both retailers and price-conscious consumers.
"What happened in the early days of COVID when supply chains just broke all across the country, urban controlled environment farms like Square Roots were among the only producers that were able to get food on shelves at supermarket locations, so the consumer did experience that (i.e. a fresher, longer-lasting products)," said Peggs.
Efficient unit economics?
Asked about the unit economics of an operation such as Square Roots, which uses 95% less water and a fraction of land compared to field-grown leafy greens but still has to pay for essential elements such as artificial light and heating and cooling to grow its wares, Peggs said the company takes a simple viewpoint by looking at the end cost of the product passed onto to consumers.
"Where you see whether the unit economics make sense, is what is the price of the product on the shelf? Our pricing right now shows that we’re extremely competitive on price vs. organic, and increasingly we’re becoming competitive with conventional field grown as well," said Peggs.
"And as a technology-enabled company every month as we make the next technology breakthrough that’s bringing down the cost even further."
New, younger generation of farmers
Square Roots is also helping to transform a different area of the agricultural industry by attracting a younger demographic of farmers at its various facilities.
"From day one, we’ve invested heavily in our farmer training program. If you talk to this generation now, they want to change the food system," said Peggs, who added that the average age of its farmer is around 25-years-old vs. the national average farming age of 58.
New produce varieties on the horizon?
While Peggs said the company plans to stick to its salad mixes and herbs for the time being, he did share that Square Roots is doing a lot of work around other varieties of produce at its R&D facility in its home base of Brooklyn, New York.
"In that facility we’ve grown about 200 different varieties in the last couple of years from herbs to small fruiting plants likes strawberries and tomatoes all the way up to eggplants and turnips," said Peggs.
"The question at this point isn't really one of capability, but what do our customers want right now?"