Urban Produce LLC has branched out—it’s started licensing its high-density vertical growing system in hopes the move will account for about 70% of its revenue within the next five years.
The Irvine-based company also is looking for a “capital partner to come in with about $50 million to take us to the next level,” said President and Chief Executive Ed Horton Jr., adding that the funds would be used to construct five farming facilities—in Cincinnati, Harrisburg, Atlanta, San Antonio and Denver. Each will hold about 23,200 square feet of growing space, which is roughly four times bigger than its current operations in Orange County.
The Business Journal recognized Urban Produce in the small business category at the 17th annual Family Owned Business Awards luncheon at Hotel Irvine on June 21 (see related stories, pages 1, 4, 5 and 9).
The company’s patented indoor farming method rotates seeded trays, stacked 25 feet high, on a conveyor around the growing unit so that each plant receives an equal amount of light, nutrients, water and air. And since leafy greens and micro veggies are grown vertically, they fit on a 1/8-acre footprint instead of the 16 acres required by conventional farming. The system causes no runoff issues, uses 90% less water and 80% less nutrients, and is pesticide free. A computer that can be accessed remotely controls the growing process.
Sustainable
The Irvine facility recently started producing its own water supply via “atmospheric water generation,” Horton said.
Urban Produce has partnered with Skywell LLC in Santa Monica, which has developed technology to take in ambient air, cool and condense it, and then purify the collected water via its proprietary filtration system.
The produce growing area creates humidity, which is an ideal condition for water collection.
“We are trying to be as sustainable as possible so we can go anywhere in the world,” he said. He’s also working on adding solar panels to the building “to generate the energy to run the lights and water generation. Then you can take these in very remote areas and build them, and teach people how to grow their own food.”
Groups from Qatar, Mexico and Japan have visited Urban Produce and “have expressed interest in having us build what we have here in Irvine in their countries,” Horton said. A potential licensee in Canada is looking to build an indoor farming facility to supply his franchised Subway restaurants with micro veggies and live lettuce.
Growers also want to see if the technology can be adapted for other crops.
“I get three phone calls a week from people who want to look at our operation to get into the cannabis business,” he said.
The system Horton plans to license—with a footprint of approximately 3,800 square feet—is slightly smaller than the one in Irvine, and could “generate $3 million to $4 million a year in gross revenue,” depending on what is grown.
“I see licensing as a big component of our business,” Horton said. “I’d like to build 100 of these all over the world in the next three to five years; it should represent about 70% of our revenue.”
Supermarkets
Urban Produce was certified as an organic grower in January of last year and began shipping its organic broccoli microgreens, wheatgrass, wasabi-Bok Choy, and Kale-ifornia—a blend of organic kale and amaranth—to some 900 grocery stores in Southern California, including Vons, Albertsons, Pavilions, Ralphs and Whole Foods.
It’s also in the talks with Kroger Co. to sell its products at its grocery stores nationwide, and is finalizing a contract with a “national juice bar company” owned by one of the two major soda producers “to grow product for their facility in the City of Industry,” including wheatgrass.
“That will put me at 75% capacity,” said Horton, adding that Urban Produce’s current order load uses 30% of the 5,800-square-foot growing system. And while he said he couldn’t confirm the name of his new partner, the PepsiCo-owned Naked Juice facility is in the City of Industry.
Store
Urban Produce also works with food-service companies, including FreshPoint in Maitland, Fla., Sysco Corp. in Houston, West Central Produce in Moultrie, Ga., and Ingardia Brothers Produce Inc. in Santa Ana, to get its products into restaurants.
It’s diversifying its crops to focus on specific herbs, including Fenugreek, for the “nutraceutical industry,” which extracts specific plant cells for use in dietary supplements.
Urban Produce plans to open a farm store at its headquarters in Irvine next Saturday, when the public will be able to buy its fresh produce.
The company, which opened in 2013, employs 15, three of whom are members of Horton’s immediate family. Rosie Horton, his wife, is vice president of human resources and administration; daughter Danielle is a nutritionist and also runs marketing; while son Edwin Tyler is a grower.
“The company is in a trust, to give the kids something,” Ed said. “They are an intricate part of the business and own it.”
