Oishii continues to sidestep struggles plaguing vertical farms, taps CPG veteran to further fuel growth

By Elizabeth Crawford

- Last updated on GMT

Source: Oishii
Source: Oishii

Related tags Oishii vertical farming strawberries

At a time when many players in the controlled environment agriculture industry are laying off employees, filing for bankruptcy and in some cases closing their doors, vertical farm Oishii continues to grow – expanding production, distribution, its portfolio of high-end berries, and now its leadership team with the appointment of industry veteran Rita Hudetz as chief commercial officer.

Bringing more than 20 years of experience in sales, marketing and operations in retail and CPG, Hudetz will lead Oishii’s growth strategy, including expanding the company’s retail footprint, overseeing product launches and continuing to differentiate the business model from other vertical farms and its produce from the competition.

FoodNavigator-USA caught up with Hudetz to discuss her new role, how she will apply lessons learned in her previous positions at Milk Bar, Hu Kitchen, and PepsiCo to not only protect Oishii from the same struggles of so many CEA competitors but ultimately grow the business, and ultimately where she sees Oishii and the overall vertical farming segment headed.

This interview has been lightly edited for length and clarity.

FoodNavigator-USA: Let us start our conversation with what attracted you to Oishii, which is in a completely new segment of the market for you and has a different business model than some of the companies for which you previously worked.

Rita Hudetz: I was really excited about the opportunity to work in a new space, but to use a lot of my consumer packaged goods experience, and sort of working with retailers and that whole space. The other thing that got me here is I am a plant person and gardener, so I like being close to the farm and closer to that side of it. … And this is just such a new and interesting space from a technology perspective. So that combination of being able to use a skill set I have, but in a totally new industry was really exciting.

FNU: I want to talk about how you will draw on your past experience to help shape the future of Oishii and the vertical farming space, but first I want to address the elephant in the room, which is you are entering a segment that holds a lot of promise, but also is facing significant challenges. We are seeing some the most promising players now facing heavy losses, bankruptcies, consolidation and other challenges. How did you think about the current landscape when considering this job and what tipped the scales in favor of accepting this position?

RH:I definitely was reading the headlines as I was talking to the team and saw the turbulence in vertical farming, but what brought me here – being a consumer person – is the faith in both the product and the brand and how they are differentiated.

I was fascinated by Oishii’s use of indoor pollination as a differentiator in the market ​… and I spent a lot of time in my interview processing the unit economics and how this works, because the company does have something that is differentiated.

We walked through the decision to go with an iconic fruit, but truly differentiated it. There is a lot more opportunity to premiumize in the space and compete. If you are offering a commodity product, you’re not able to differentiate enough to take price in the way you need to. But Oishii’s berries are really differentiated, and its business model is differentiated and we are learning from other companies that are scaling too quickly without a differentiated product.

So, I am really optimistic about the future of vertical farming and what we can grow.

FNU: You mentioned the company’s unique indoor pollination, technology and the unit economics – tell us a bit more about why Oishii’s approach is better than the approaches taken by other vertical farms.

RH: If you look at the strawberry space, there actually is a lot of discontent with the products that are out there. I stopped buying strawberries overall because I was concerned about pesticide levels, the taste was irregular, if it is the off season you don’t know if you are going to get the product. Our product is solving for a lot of those things that bring discontent, while also bringing phenomenal flavor in a way that consumers haven’t experienced before. We are standing out in that regard and differentiating ourselves in the market and solving a consumer need. That hasn’t always been at the forefront of a lot of other players in the vertical farming space.

FNU: Oishii has some strong momentum having recently introduced its second berry – The Koyo Berry – in addition to the original Omakase Berry, and this summer Oishii expanded its retail footprint into Washington, DC, all after opening Oishii’s Mugen Farm outside of Manhattan. How will you continue to accelerate that momentum? What are your top priorities in this role and how are you approaching them?

RH: Right now, as we’re looking at how we expand Oishi, our goal is really to try and make the product a household name. We are reasonably constrained because we are fresh and local so we can’t sell too far from where we’re growing. That means a lot of our strategies are about developing a connection to each of the regions that we enter.

So, we’re really focused right now on building regional relationships and deepening partnerships in the places were we’re going in the future. We are currently launching in Washington, DC, and have done a number of amazing collaborations with different restaurants and influencers, and we are excited about building that enthusiasm that we have from our core consumer base in the New York area as we expand.

[From a retailer perspective,] demand for premiumization in produce is really high and we’ve had more retailers calling us than the other way around, which is really positive. For us, what we are really valuing in those relationships is flexibility and understanding that we’re a new technology and we’re a natural product. So, working with partners who understand that we’re refining some of our processes and timelines may move slightly or we may make different decisions. A lot of our partnerships are focused on the flexibility to test and learn as we scale.

FNU: Produce is certainly an essential foot-traffic driver to many retailers and as such they want to offer the best. But many consumers don’t think about produce as branded products and therefore don’t have the same loyalties as they have for other packaged food brands, which might help them justify higher prices. As Oishii’s berries are significantly more expensive than other strawberries, how are you talking to consumers about what makes your strawberries worth their price point?

RH: Seasonality and local dominate the conversation around produce and we break through both of those because we are in season all year because it is indoor farming and we because people associate local and in season with really strong flavors and we deliver that all the time. So, that gives us the ability to take a brand position and really speak to those things – being pesticide free, always in season, always delicious, consistent andreally drive that with consumers.

I agree it is harder to do in produce, but we are seeing it build with other players – like Cotton Candy grapes or Sumo oranges. But those are more seasonal and I think we’re building a brand for the full year and speaking to consumers about that.

FNU: How much of the story you tell consumers is about vertical farming and how your berries are produced and to what extent does that resonate with consumers?

RH: Consumers aren’t consuming vertical farming for the sake of vertical farming. They’re consuming the products because they are good. Vertical farming in and of itself isn’t a consumer benefit.

We are having conversations with consumers and researching what they want and they associate strawberries with positive memories and so we are leaning into that and the fact it is an iconic fruit that is typically only available certain times of the year but now we can offer it all year at the best quality.

We have a lot of fun marketing strategies coming this fall so you will see us really speaking to that and how we are always in season and available.

… Oishii has always been consumer oriented, brand oriented company. It is not just working on the technology to deliver this, but also working on how we deliver the best quality and customer service and product to really differentiate ourself.

FNU: As you look forward, how will Oishii expand its portfolio – what types of new products can we expect?

RH: We are in the process of a new product launch. We are currently launching our Koyo Berry … but we definitely are looking t the future with expansion into a number of pollinating crops. We do have some exciting stuff coming up. How fast we scale all of that is the big question mark, because we really are committed to the strawberry as our initial launch and really getting the technology right. But once we do, the sky is the limit with what else we can bring and grow.

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