Indoor horticulture company, Appharvest, raised an additional $28 million according to Crunchbase in their early October funding round. They have raised over $145 million to-date and have yet to grow a single tomato. This is an amazing accomplishment in any ecosystem and doing so in rural Appalachia makes the impact even greater.
Headquartered in rural Morehead, Kentucky (pop 7562), the three-year-old company has some major investors, such as Rise of the Rest, Fidelity Insurance, and Value Act Capital. The company has also created a partnership with a world-leading greenhouse manufacturer, Dalsem, a Dutch corporation.
Based on multiple interviews, AppHarvest expects to bring an initial 300 jobs to the Morehead area and are looking to expand to additional markets. The company is planning to go public through a merger with Novus Capital sometime in late 2020 or early 2021.
To learn more about Appharvest here is a recent interview with founder Jonathan Webb on the TD Ameritrade Network. You can also read about Appharvest and the greenhouse produce market in an article from last year in the New York Times titled A Greenhouse Large Enough to Feed the Eastern Seaboard.
If you prefer the local perspective on how Appharvest fits into the local ecosystem, we suggest you check out the story below (republished with permission) written by Liam Niemeyer of Ohiovalleyresource.org titled, Back to the land: The Future Challenge And Opportunity of Appalachian Agriculture . In his story Niemeyer offers a perspective that national media outlets do not cover on a regular basis – the local industry context, struggles, and the feel of a community surrounding the startup.
Back to the land: The Future Challenge And Opportunity of Appalachian Agriculture
By: Liam Niemeyer | Ohio Valley ReSource
WHITESBURGH, Ky. (OVR) — A line of blue and yellow pop-up tents stand along the North Fork of the Kentucky River during a sunny September weekend in downtown Whitesburg, Kentucky, and Valerie Horn is doing her part to keep the Letcher County Farmers Market rolling.
Pumpkins and watermelons fill tarps laid out on the ground next to a farmer, and another is offering bottles of maple syrup. As chair of the farmers market, Horn finally has a moment to relax after a busy week leading up to this day.
“OK, the market’s open, we have good produce, we have customers, we’ve made our invite out, we’ve done what we can do to set up and create a successful market for today,” she said. “Just enjoy seeing who comes by,and stir a little when and if it’s helpful.”
Even with the pandemic affecting the economy, Horn expects this year’s farmers markets to conservatively bring in at least $100,000 in recorded sales, and that doesn’t include additional cash sales that farmers aren’t required to disclose. And it’s a significant leap from when the market started in 2014, she said, when the market only brought in $5,000.
But the market hasn’t gotten there alone. Partnerships to make the local food more accessible have brought in more investment. A “Farmacy” program started in 2015 lets people get local produce through a doctor’s prescription, and a federal summer feeding program that Horn said has distributed more than 600,000 meals in eastern Kentucky.
And she said a community-centered commercial kitchen, the C.A.N.E. Kitchen, promises to buy excess produce farmers don’t sell for future charitable events and programs to turn into package products. That guaranteed support provides enough certainty for newer farmers to try out selling produce, and for more established farmers to keep coming to the market.
“Farmers were given the opportunity to grow and bring the best produce that they could bring to the market and not have to worry about building that market,” Horn said. “So for a small farm or small farmer that’s deciding, ‘How much do I play it this year? And how much do I risk?’ They are in a very good position to know that it’s a guaranteed sale at a very, very fair price.”
Horn sees the growth of her farmers market as key to not only bringing in a new generation of farmers, but also creating a stronger community identity. With the continuing decline of the coal industry as an economic driver for the region, Horn and other advocates see agriculture as at least part of the economic solution forward.
But the path forward is not entirely clear. Challenges abound in attracting the resources and people needed to scale up production. Much of the area’s land is scarred by a century of coal mining, and ideas on how to use the land and what crops to grow differ. And heading into a new decade amidst a historic pandemic means anxiety and uncertainty are high.
Resource Struggles
The Letcher County Farmers Market hasn’t gotten to where it is now without some help. Horn said financial and other support has come from the Appalachian Impact Fund, Grow Appalachia, the city of Whitesburg, the University of Kentucky, and the Community Farm Alliance, which also sponsors and supports 21 other Appalachian farmers markets.
“It’s also a lot of turnover [in markets] because there are young farmers who are just kind of practicing and seeing if this is going to work and ‘no, it’s not gonna work,’” said Margie Stelzer, a manager of CFA’s Farmers Market Support Program and a past manager of the Berea Farmers Market for several years.
Stelzer said managing a successful farmers market takes more than just a few farmers who are interested — it requires having a stable and consistent board and staff to manage the market, along with putting said market in the right location in a county to attract consumers. But she said farmers can’t just rely on farmers markets to make a living, and other initiatives are trying to find bigger solutions for that.
In West Virginia, Fritz Boettner runs the Turnrow Appalachian Farm Collective, a food hub that aggregates produce from small farmers to sell to larger markets. They formed from the combination of smaller food hubs in the state in 2018, and their sales skyrocketed in the beginning of the pandemic.
Boettner sees a path forward to scale up the food hub and bring more farmers into the fold. But his operation is kept afloat through grants, too, with not enough people to handle the workload.
“So right now, you have five people doing the job of 10 right now. Like literally, that’s what we have,” Boettner said. “We have some of the best people working, the most committed people. In the nonprofit, central Appalachia — you just burn people out, you just run through them.”
He’s had trucks break down recently and even catch fire, losing $6,000 worth of product in the flames. He said his food hub would be running in the red without grant support from different entities including the Just Transition Fund and the Appalachian Regional Commission. He adds that he wouldn’t even need that many more people to expand their hub — just a team of three sales people — to take the workload from his organization’s other members. It’s a struggle to expand he said he sees in other heavily subsidized nonprofit efforts.
“West Virginia has been screaming for a food hub since I can remember. And I’m like, ‘Here it is. And it’s not owned by anybody. It is opportunity right now to create something that’s owned by all of us that supports all of us. Let’s invest in it,” he said.
Different Visions
Yet with those struggles, one company is bringing in millions for a different vision of Appalachian agriculture.
The company AppHarvest has attracted more than $150 million dollars in venture capital funding to open a Morehead, Kentucky, facility with a 2.76-million-square-foot greenhouse the size of nearly 50 football fields.
The plan is to ship produce — beginning with tomatoes — across the eastern seaboard, with the company currently hiring more than 300 people in eastern Kentucky. It’s led by CEO Jonathan Webb, who has family and coal mining roots in Whitley County, Kentucky.
“There’s a lot of incredible organizations and a lot of passionate individuals. And if we can all align and work together, then yes, we’re going to all collectively attract a lot of capital in the region,” Webb said. “And we’ll see a much better tomorrow than we can imagine, but it’s going to be hard work. And it’s going to take a decade or two, two decades to see the reality.”
Other advocates in Appalachian agriculture interviewed by the Ohio Valley ReSource were generally supportive of AppHarvest, but were not sold yet on the large promises AppHarvest is making.
Webb said that the company is already making good on giving back to the region by planning to invest a total of about $500,000 in three high schools this fall, with about $150,000 of that invested at Shelby Valley High School to create a container-farm educational program. He also said to better uplift the region, the work AppHarvest is doing has to provide living wages, healthcare, and company ownership access, things that were often lacking in the exploitative practices of the past coal industry.
“There’s a lot of skeptics, not only in the region, but around the country and around the world of people who question is this possible in agriculture? And I think for all of us, we have to demand, yes, it is not only possible, but this is what has to happen,” Webb said.
Joyce Pinson is one advocate for Appalachian agriculture who’s waiting to see what AppHarvest becomes. Pinson is a farmer and journalist in Pike County, Kentucky, who had been heavily involved in her local farmers market, runs an Appalachian Heirloom Seed Swap, and now sells jams and jellies from her farm.
She was disappointed when AppHarvest decided to move their planned greenhouse for the site from Pike County to Morehead partially because of struggles to find stable land for the site due to past strip mining.
“I think that they have a lot to prove. I think the concept is a solid concept, but how they can bring that to reality is yet to be seen,” Pinson said.
For her, she sees a path forward for agriculture in the region by continuing to create a brand and new identity for produce and products from Appalachia, such as the Kentucky Department of Agriculture’s “Appalachia Proud” brand.
But she also sees a need for more agricultural education to create new generations of farmers. She grew up in Boone County in northern Kentucky and married into a family from Pike County. Growing up, she said, she was involved in getting ready for the county fair and state fair.
But there is no county fair in Pike County, she said, and not enough youth programs like Future Farmers of America in the region.
“That was just part of the community and owning your own agriculture. You know, that was part of what we were, and people down here don’t really have that mindset,” she said. “You just have to continue to show that there is hope, and there is a prospect there for agriculture. You know, so many here in Appalachia, you don’t find many that are full time farmers.”
Growing A New Generation
Jason Brashear doesn’t believe agriculture is a silver bullet for the region’s economic woes, but he hopes he can inspire people to consider opportunities in growing, one student at a time.
The 38-year-old Brashear grew up on a small farm in eastern Kentucky raising beef cattle and eventually goats, and is a licensed goat judge who’s judged livestock in more than 40 states.
He was an agriculture teacher at Perry County Central High School in eastern Kentucky until a few years ago, when the program shut down due to lack of state support. The school went from teaching multiple agriculture classes a day with about 120 students involved, to an extracurricular agriculture club that meets with about 10 students after school.
“There were really a lot of kids that I knew that had the interest of working with the land that I don’t want to say fell through the cracks, but they don’t have anything to really ‘bite into’ and get excited about,” Brashear said. “I hate to see so many of our ag programs get cut, and so many of our local high schools here around without an ag program.”
He said that education is the key to creating a culture shift in the region that better promotes agriculture as an option. He adds that there’s not a shortage of producers in Appalachia, but that there needs to be more encouragement of people who have places like gardens to consider making it a job.
Brashear now works as the Director of Foodways at the Hindman Settlement School, where he’s helping with educational programs to connect people back to creating and cooking local food. He briefly worked with the Community Farm Alliance, and brings up a quote from CFA’s Martin Richards as he’s thinking about what the future holds.
“Kentucky is so perfect to be producing because we are so close to the majority of the population. We have the land, we have the climate, we have the weather — we have it,” said Brashear. “We just got to figure out the infrastructure that has to be in place for us to really come up with that.”
ReSource reporter Sydney Boles contributed to this story.
This story is part of a series revisiting people and themes in the new Ohio Valley ReSource book, “Appalachian Fall.”