Agtech company AppHarvest debuts produce in select grocery stores

Yahoo Finance’s Alexis Christoforous and Jonathan Webb, AppHarvest CEO, discuss AppHarvest’s produce debut in select grocery stores.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back to "Yahoo Finance Live". It is a big day for AppHarvest. The indoor vertical farming agriculture tech company is shipping out its first harvest of beefsteak tomatoes to national and regional grocery store chains, including Kroger and Walmart. Joining us now is the CEO, Jonathan Webb.

Jonathan, thanks for being with us, and congratulations on the beefsteak tomato harvest. For people who are unfamiliar with what AppHarvest does, tell us a little bit about the company and how you're growing these fruits and vegetables.

JONATHAN WEBB: Yeah. Here at AppHarvest, we've set out to build some of the world's largest controlled environment agricultural facilities, and we're doing it in central Appalachia, right here in Eastern Kentucky, formerly really known as coal country. We've seen a lot of the coal mines shut down here.

So we're using technology to grow a fruit and vegetable with 90% less water than open field agriculture. We get 30 times yield per acre. And we don't use any of the harsh chemical pesticides that you see in open field production.

And the reason we're growing tomatoes, I've been talking to Martha Stewart, who's on our board, all morning, who we got our first tomatoes to over the weekend. We're focused on bringing production back to the US. We've seen most of our fruit and vegetable production go down to Mexico. Four billion pounds of tomatoes were imported out of Mexico into the US last year. Our company is working hard to bring that production back to the US and make a good, tasty fruit and vegetable that's affordable and available for every American.

ALEXIS CHRISTOFOROUS: Jonathan, are these genetically manufactured fruits and vegetables? And how are you going to get the public to sort of jump on board with this idea?

JONATHAN WEBB: Well, that's the reason we put Martha on the board, and she's one of the biggest names in food. No, the beautiful thing is one, I eat mainly fruits and vegetables, and I'm a consumer of our product. This is not genetically modified. We naturally breed the seeds. We put nature first. You might see bumblebees actually flying around me. The reason we're able to have bumblebees in our facility pollinating is we don't have the harsh chemicals in our growing practice. We're simply controlling the environment in this facility to optimize for the fruit and vegetable, giving it exactly what it needs.

But we run completely on recycled rainwater, I think the only facility we're aware of that runs completely on recycled rainwater. And using the natural sunlight, we're adding LED lighting, the micromole light that the sunlight does not provide.

We don't have a choice. Our climate is changing. We, as the agriculture sector, are going to have to use technology and grow in controlled environments. The UN Security Council was here last year and visited us. And they've come and had such an interest because they've laid out goals that the world needs 50% to 70% more food by 2050. And some have predicted we would need two planet Earths to have enough land and water to grow that food.

We're going to have to use technology, use far less land, far less water, get the chemicals out of the growing practice, and grow a good, tasty fruit and vegetable. So we're working hard to do that here in central Appalachia and look forward to being on grocery shelves this week.

ALEXIS CHRISTOFOROUS: Yeah, talk to me a little bit about where people can find these fruits and vegetables, at least beefsteak tomatoes are your first harvest. So what are some of your partners, and do you expect that to grow throughout 2021?

JONATHAN WEBB: Yeah. So we'll be at many of the top 25 grocers in the US. This week we'll be at Kroger, Publix, Myer, and Walmart soon. And David Lee, who is the CFO and COO at Impossible Foods just joined AppHarvest as our president and will be taking over many of those relationships with us.

But really, the demand is far exceeding the supply in the US. If you look at the grocer demand and the consumer demand for our product, domestic, using no chemical pesticides, we have a team where everybody gets full health care. We pay a living wage. This is where agriculture must go in the next decade. Our company is one of many that's working to solve these problems.

And we've recently been pursuing a SPAC transaction that will be listed on the NASDAQ soon under APPH. And right now Novus is the ticker. But we hope to be not first, but first of many controlled environment ag companies on public exchange.

My background was building some of the largest solar in the US, and we've tried to say this is really the third wave of sustainable infrastructure. 20 years ago it was renewable energy. 10 years ago it was electric vehicles in automotive. And right now, we're seeing controlled environment agriculture get to a point to where the technologies are available. The demand is there on the grocery and consumer side, and it's our job in the private sector to build the facilities.

ALEXIS CHRISTOFOROUS: You mentioned David Lee. He's certainly a friend of the show. We've had him on many times in his prior role there with Impossible Foods. You've got Martha Stewart on your board. So talk to me a little bit about fundraising for your company. Where do things stand right now?

JONATHAN WEBB: Well, we're raising nearly a half a billion dollars in the SPAC and PIPE transaction. And we've tried to say not all SPACs are equal. We raised almost $400 million in the PIPE. Fidelity led that, and many other incredible investors. And we did a road show. We had to cancel all of our roadshow meetings after 22 meetings. We had 17 investors commit into the pipe after 22 meetings. We had nearly 75 meetings scheduled.

So the demand-- I heard your last viewer talking about ESG. ESG is not some nice to have. It's not some cute part of a business. If every Fortune 500 and every publicly traded company is not putting ESG at the core part of their fundamentals, then they're going to be stamped out by consumers, by regulators.

And so for us at AppHarvest, we've built a business to where we can get a consumer of fruit and vegetable at the same price. But we've had all these ESG components built in. We'll be a public benefit corporation. We're a B Corp. It's hard work, but the consumer demand for the product is there. And frankly, on the investor side, the demand to get investments into these types of companies, I think we're an example of that and look forward to be, hopefully, one of many agriculture companies that continue to move ag forward here in the US.

ALEXIS CHRISTOFOROUS: Yeah, we look forward to AppHarvest coming to market. And Jonathan Webb, CEO, thanks so much, and good luck as you continue to scale the business.

JONATHAN WEBB: Thank you.