Struggling greenery enterprise, Revol Greens, elects to discontinue activities in California, focusing on boosting productivity in Texas.
Revolution Farms to Sell or Lease Closed Tehachapi Greenhouse Facility
In a significant development, Revolution Farms, a leading company in the controlled environment agriculture (CEA) sector, has announced its plans to sell or lease the 62-acre site of the closed Revol Greens greenhouse facility in Tehachapi, California.
The Tehachapi site, owned by Equilibrium Capital, includes 14 acres of lighted, high-tech lettuce production, 32 acres of semi-closed high-wire greenhouses, 16 acres of partially decommissioned acreage, a large packhouse, and cooler with eight loading docks.
Equilibrium Capital had brought in FoodVentures, led by Dirk Aleven, in 2024, to turn things around at the Tehachapi site. Aleven's team has been working diligently to address the labor efficiency issues at the greenhouses, which he attributes to processes and equipment problems rather than a lack of personnel.
FoodVentures has made substantial improvements at the Texas site by empowering local teams, changing procedures, recipes, suppliers, climate settings, and culture. The company has also reduced overheads significantly, cutting out layers of management and the head office in Austin, resulting in a decrease from $24 million to $4 million in just three months. After fixing the processes and equipment issues, FoodVentures was able to increase efficiency with half the amount of personnel.
However, despite these improvements, FoodVentures has faced challenges in the vertical farming sector. Aleven criticizes the venture capital and private equity investments in the high-tech greenhouse industry, stating that they have the wrong type of money and the wrong expectations, as the industry is slow to generate returns. He also expresses a fundamental difficulty with vertical farming, as it eliminates natural light and does not offer a significant enough economic advantage over high-tech greenhouses.
According to Aleven, consumers do not pay extra for products made in vertical farms compared to high-tech greenhouses, as both are pesticide-free and locally grown. He emphasizes that the economics of CEA must add up, and it is not worth two or three times the price of open field production to differentiate based on factors such as organic, proximity to consumers, and better shelf life.
In a recent development, Revol Greens has issued a WARN notice to 42 remaining staff at a high-tech greenhouse in Tehachapi, California, indicating that the site will close in November. The Revol Greens site in Texas, opened in 2023, is currently yielding more out of half the facility than historically was the case over the full facility.
FoodVentures got involved in the US market through the bankruptcy process at AppHarvest. The company's efforts to streamline operations and improve efficiency have resulted in a reduction of man hours per kilogram by 50% at the Texas site.
As Revolution Farms prepares to sell or lease the Tehachapi site, the future of the greenhouse industry in California remains uncertain. However, FoodVentures' success at the Texas site offers a glimmer of hope for the industry's potential to adapt and thrive in the face of challenges.
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