Dive Brief:
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Local Bounti is ramping up indoor farming production of leafy greens and herbs as a new CEO from Amazon looks to resolve operational challenges at the company.
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The agriculture company is “growing capacity at new and existing facilities" while also scaling its distribution network to reach more customers, Anna Fabrega, chief executive officer, said in an earnings call on Wednesday. She previously was the CEO of meal delivery service Freshly and led Amazon Go, the company's convenience store unit.
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Second quarter sales and income improved over last year despite extreme rainfall that affected Local Bounti’s California operations. The company, which has recently attracted funding from Cargill, is growing its operational footprint to alleviate capacity challenges.
Dive Insight:
Local Bounti’s expansion efforts come as other indoor agriculture companies have filed for bankruptcy amid changing consumer preferences and challenges raising money.
Asked about the current economic environment, Fabrega said in the call that Local Bounti has a solid financial foundation in terms of cash on the balance sheet and availability of financing.
Sales grew 14% to $7.2 million in the second quarter over last year. Local Bounti reported a net loss of $10.7 million for the period compared to a loss of $31.7 million a year ago. The company said margins were compressed by extreme weather challenges in California and exacerbated by facility damage that required maintenance and repair, which slowed production.
To help with production, Local Bounti has three facilities in various phases of construction located in Georgia, Texas and Washington, designed to have greenhouse acreage and automation and stacking technologies.
In order to be successful, Fabrega said in the call that “we need to grow and scale the business in the most efficient way possible.”
“We're going to maximize growth out of our existing footprint,” she said. "And beyond that, we're always looking at where our customers want us to go and where there's market demand."
Fabrega joined the company in June to help scale the business after holding leadership roles at Amazon and Freshly. At Amazon, she helped lead Amazon Go and the food service unit Amazon Kitchen.
Founded in 2018, Local Bounti is a hybrid indoor farming startup from Montana that focuses on growing local, fresh produce in a sustainable, affordable way.
To achieve this, it implemented a mix of hydroponic and aeroponic practices as well as technologies to limit its land and water use. Over the years, Local Bounti grew into a public company with operations in Georgia and California. Other locations are in the works.
Local Bounti has four facilities in operation, located in Hamilton, Montana; Byron, Georgia; Carpinteria, California; and Oxnard, California.
