Wednesday, December 6, 2023

Indoor strawberry system looking for investors

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26 Seasons announces new capital raise through Snowball Effect.
26 Seasons co-founder Matthew Keltie in the 26 Seasons indoor strawberry farm in Foxton.
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Indoor strawberry grower 26 Seasons is launching a capital-raising programme to boost production at its Foxton site and expand the concept overseas.

The company specialises in off-season premium strawberry production through its Controlled Environment Agriculture (CEA) indoor farm.

It hopes to raise up to $1.5 million in new capital, with the ability to take up to a further $3m in oversubscriptions, through online investment platform Snowball Effect.

This will complete its Series A funding round, adding to the $3.55m (made up of $1.55m equity and $2m debt from the regional economic development and investment unit, Kānoa) the local agritech company has already secured as part of this round.

The funds raised will be used to scale up its indoor CEA strawberry farm in Foxton by significantly increasing the capacity of production of sustainably grown, premium strawberries annually. 

Funds will also be used to roll out the company’s licensed “all-in-one” modular vertical farming system, invest in an R&D facility to trial other strawberry varieties and conduct an international pilot in Malaysia to confirm commercialisation opportunities in high-value southeast Asian markets.

The capital raise coincides with the commercial launch – in winter – of 26 Seasons strawberries into key supermarkets. 

This follows a successful commercial pilot by the company that acted as a proving ground for strawberry growing data, consumer acceptance, premium pricing and retailer support.

Chief executive Grant Leach said the company has a clear growth strategy to sustainably grow and supply premium strawberries at good margins to high-growth markets. 

“Demand from consumers, retailers and food service in New Zealand and overseas far exceeds stable year-round supply of consistent-tasting, locally grown strawberries due to the short season for traditional outdoor growing and supply chain vulnerability. In most markets peak ‘out of season’ demand is met by flying in product from distant markets with negative impacts on food miles, transport costs, shelf life, spoilage, retail price and quality of berries,” he said.

Woolworths, Foodstuffs and Farro are now confirmed as keen stockists for 26 Seasons strawberries, and its locally-grown berries hit select supermarket shelves around the North Island for the first time this July, following some of the most turbulent weather on record. 

“New Zealand is no longer immune to supply chain vulnerability and unfortunately extreme weather events over recent years, including cyclones, flooding, and drought, have led to significant yield reductions across various crops, including strawberries. These losses have not only affected the financial viability of growers, but have also led to food shortages and price fluctuations in the market,” Leach said.

26 Seasons is also focusing on overseas markets as governments such as Singapore and UAE – both large consumers of imported strawberries – announce policies to improve food security and increase resilience to supply chain disruptions by investing in local food production.  

This will be via development of its own CEA strawberry farms in these markets and by licensing its  “All in One” modularised vertical farming system. 

“This will enable fast, manageable in-market commercial expansion wherever there is demand, without the need for capital-intensive, large footprint ‘mega’ indoor farms that are located far from the markets they serve,” Leach said.  

“The systemised approach means that 26 Seasons can deliver the first harvest of premium strawberries within 150 days of the ‘All in One’ growing system landing in the target city. This is a very sustainable system that is free of chemical sprays, has exceptionally low water demand and is space efficient.”

26 Seasons was founded in 2017 by two experienced ag-sector individuals, Steven Carden and Matthew Keltie. 

It initially grew and supplied microgreens before focusing its efforts on the high-value, high demand strawberry. Today 26 Seasons is one of just a handful of companies globally that has mastered indoor farming of this tricky-to-grow fruit on a commercial scale, Leach said.

“Investing in 26 Seasons offers a unique opportunity for people to participate in shaping the future of sustainable food production,” he said. “As climate change continues to pose unprecedented challenges, and consumers increasingly demand sustainably grown, delicious and fresh local produce, the need for innovative solutions like CEA is rapidly growing.”

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