Mastronardi Produce, AppHarvest Join in New Farming Venture
In their quest to revolutionize the ag tech sector, Mastronardi Produce Ltd. and AppHarvest are strengthening their relationship by signing a nonbinding letter of intent to form FarmCo, a joint venture to develop a portfolio of controlled- environment agriculture (CEA) facilities to expand the supply of fruits and vegetables to Mastronardi's existing fresh produce marketing and distribution business. The launch of FarmCo is targeted for the first quarter of 2022.
FarmCo will have its own leadership team, and calls for the two partners to contribute equity and assets of more than $100 million. Applied-technology company AppHarvest, known for developing the world's largest high-tech indoor farms, recently secured $91 million to support its 60-acre facility in Richmond, Ky.
The joint venture would use the equity contributed from both companies to raise additional capital to fund its growth, targeting to build more than 750 acres of CEA facilities in the United States to grow fresh fruits and vegetables, including leafy greens.
"We are extremely pleased to be entering into this letter of intent with AppHarvest," said Paul Mastronardi, president and CEO of Mastronardi Produce, which is based in Kingsville, Ontario. "We have seen the demand for locally grown produce skyrocket, particularly over the past 18 months as more people are cooking from home, and this partnership will allow us to significantly increase our ability to get more fresh, flavorful locally grown produce to tables across America."
Mastronardi Produce has been family-owned for more than 70 years, producing gourmet tomatoes, peppers, cucumbers and berries. It grows and markets products under the Sunset brand, including Campari, Flavor Bombs and Angel Sweet.
"Mastronardi is the unquestionable leader in marketing and distributing CEA-grown produce to top grocers and restaurants in North America, and partnering more closely with them to fulfill the growing demand for quality local, fresh produce across the United States positions us together to make an even greater impact to establish a climate-resilient, sustainable food system to ensure food security," said Jonathan Webb, founder and CEO of Morehead, Ky.-based AppHarvest.
AppHarvest and Mastronardi have worked together since 2017, and Mastronardi is the exclusive distributor of AppHarvest produce.
A Certified B Corporation, AppHarvest operates indoor farms combining conventional agricultural techniques with cutting-edge technology like artificial intelligence and robotics. According to the company, it grows non-GMO, chemical- and pesticide-free produce using up to 90% less water than open-field agriculture and only recycled rainwater while producing yields up to 30 times that of traditional agriculture on the same amount of land, without agricultural runoff.
For the second quarter ending June 30, AppHarvest’s net sales were $3.1 million, an increase of $0.8 million from the first quarter of 2021, when AppHarvest began its inaugural harvest and launched as a public company. AppHarvest sold 8.6 million pounds of tomatoes in the second quarter, an increase of 4.8 million pounds from the first quarter.
