Dive Brief:

• Vertical farming startup Evergreens Farms won Ahold Delhaize’s supply chain innovation pitch competition, Retail Business Services, the services company of the food retailer’s U.S. operations, announced in a press release. 
• The startup’s winning pitch involved a solution to provide vertical farming technology in any climate year-round. A panel of retail and venture capital experts determined Evergreens Farms had the most viable technology.
• Evergreens Farms, founded in 2017 in Massachusetts, brings fresh and local produce to the New England market regardless of the season by using technological processes to grow crops indoors with "no need for soil, sunshine, pesticides, or excess water," according to the company's website. 

Dive Insight:

By scouting out and building relationships with high-tech vertical farms start-ups, Retail Business Services can integrate new agricultural technologies to supplement produce sourcing for stores. 

Regional vertical farms startups such as Evergreens Farms cut down on food waste and transport costs by growing produce close to where it is consumed, as well as appealing to consumers’ penchants for locally grown fruits and vegetables. Their shorter supply chain also allays consumers’ concerns of contamination risks such as E. coli, and market research suggests that consumers will be more willing to pay more for locally-grown products. 

Large grocery retailers have increasingly taken notice of the advantages of vertical farming. In August, supermarket chain Albertsons announced its partnership with farming tech firm Plenty to supply salad greens to 430 of its stores. Farming firms such as Plenty and Evergreens Farms also appeal to grocers’ efforts to adopt sustainable practices, as their technology-intensive approaches cut down on both land and water consumption compared to traditional commercial farms.

Greenhouse operator BrightFarms, a major player in farming technology, also supplies packaged greens to Ahold Delhaize, Walmart and Kroger stores. Earlier this year, BrightFarms expanded its distribution to Food Lion stores in the Mid-Atlantic region.

For stores left with unnecessary floor space as much of its operations shift to online, miniature vertical farming hardware could act as a savvy supply line as well as an attractive use of space. Kroger and Whole Foods have both recently installed small produce farms inside stores.

Recent efforts by Ahold Delhaize indicate it is looking to cultivate partnerships with young companies on the technological cutting edge. Earlier this year, Ahold Delhaize scouted more than 380 smart cleaning technology companies to participate in a Cleaning Bot Challenge