Daily Newsletter

27 February 2024

Daily Newsletter

27 February 2024

“The vertical-farming movement in the UK is resilient” – Jones Food Company on navigating a volatile, early-stage industry

Jones Food Company’s second UK growing site has recently become operational in Gloucestershire.

Simon Harvey February 27 2024

Privately-owned UK vertical farming business Jones Food Company has opened its second growing site for herbs and leafy greens.

The so-called JFC2 project in Lydney, Gloucestershire, got off the ground in 2021 with a slated investment of £20m ($25.3m in today’s money), with some backing from Ocado, the online retailer that invested in the business in 2019.

Set up by CEO James Lloyd-Jones in 2017, the company’s other but smaller site, JFC1, is located in Scunthorpe, Lincolnshire, while Jones Food Company also operates an R&D facility in Bristol.

Romy Wilkin, who is in charge of sales including to the major UK supermarkets, talks to Just Food about the group’s growth so far and the broader industry for controlled indoor farming.

Just Food: Did Jones Food Company manage to deliver the Lydney facility on budget?

Romy Wilkin: We actually stayed extremely close to it. We went through Covid, the energy crisis, we had a war kick off, which obviously had a big impact on fertiliser pricing.

At the end of the day, we are building an agriculture asset. If we have something that’s incredibly costly to build, and if we completely deviated from that £20m budget, there’s absolutely going to be no future in it.

It really can’t cost more than that when you’re selling stuff out of the unit that retails for less than a pound, otherwise our investors, our team or business as a whole wouldn’t see the returns that we needed.

Just Food: How did Jones Food Company fare through the energy crisis?

Wilkin: Energy procurement always had to be very central to our strategy, focused on doing large-scale vertical farms and not loads of little ones. We are in charge of procuring that energy, we have to focus on converting that electrical energy into as much food as possible.

We then have to say, what are our energy agreements? They have to be 100% renewable because that is the only way to go from an eco-sustainability and business sustainability perspective, that we're going to be able to manage the fluctuations in price.

We need to really focus on everything coming out of the unit per square metre. We've got to have the highest yield possible and then we can start justifying the energy costs.

We have this supply, growing-led approach. What have we got today? What availability do we have today? Are we up, are we down on yield? It would be calling out to all contacts saying this is what we've got, this is the format we’ve got, who’s going to have it?

Romy Wilkin, head of sales at Jones Food Company.
Romy Wilkin, head of sales at Jones Food Company. Credit: Jones Food Company

Just Food: What are the yields like at the two sites?

Wilkin: When I joined JFC three years ago, I was selling something like 50 kilos a week, now it’s 1.3 tonnes a day. It depends on the crop mix and at the moment we’re doing lots of lighter crops but the aim is to get to 600 to 1,000 tonnes per annum. We grow 11 different crops.

It’s great that it’s going into something like UK retail, where retailers and consumers are super price-sensitive. You have to really focus on making sure you get it to the right price and growing it for the right price in order to make it work.

At the moment, we’re really focused on our salads, which are doing really well in retail, and our herbs. The team is also doing baby leaf pak choi trials, which is going to be a lot heavier crop.

Just Food: Is Ocado Jones Food Company’s largest customer?

Wilkin: They’re not. We have a mixture of customers. We supply a range of salads to Ocado and sell basil to Asda. We also supply into foodservice and aggregators. They have the relationship with the customer and they buy our stuff loose and pack it on their own line.

You have to have that mix to be able to manage stock. I’m trying to make sure we’re getting product into as many different supply chains as possible.

Just Food: Is it nationwide distribution?

Wilkin: It’s national. We have a haulier which has their own consolidation units. JFC1 has no packing line so I’m selling loose crop in a crate.

JFC2 has three packing lines. I can make it consumer-ready, I can put it in whatever format you want. Imagine the difference in pricing: I’m already doubling my revenue per unit sold, bearing in mind the site’s 3.4 times larger than the first site.

From December to January, our retail sales doubled. And then we’ve had another retailer switch on this week and we’ve doubled again.

We are having conversations about looking about building and operating sites abroad

Just Food: Are markets outside the UK still on the cards?

Wilkin: We haven’t opened any sites outside the UK. I think the size of this scale, of the challenge, of opening JFC2 cannot be underestimated. We are having conversations about looking about building and operating sites abroad.

It’s a longer-term piece and it’s something that’s always been ticking on. Switching on JFC2 is informing those conversations and accelerating those conversations.

We’ve been focusing on the UK but I’m really excited off the back of what we’re seeing at JFC2 and how that could be implemented somewhere else and those conversations are happening.

Our biggest USP is our product is British. It’s British in July, it’s British in August, it’s British in February, it’s British in December. It’s not being flown in, you are not paying 52 pence for something that’s had a better holiday than you have all year because it’s been flown in after four days of air freight. If people want vertically farmed produce, it makes sense for that farm to be in the same country.

Just Food: Are your products competitive?

Wilkin: Our salads at the moment are priced at £1, that’s very competitive, realistically. Ocado was launched at £1. I don't want a £20 strawberry and I don’t want to pay three pounds for a salad. At that point, what’s the point? You’re not really targeting the crux of the issue, which is the fact that we [as a country] have to import so much.

We still go into aggregators, which means that even if we don’t have a direct relationship with the retailer, in the last few months we’ve still been packed into Tesco and Sainsbury's own label without people knowing it.

Just Food: Is it too early to be talking about additional sites?

Wilkin: I wouldn’t be surprised if by the end of this year we’re completely capacitised. James’ mission is to build nine more sites in the UK. That’s really his ambition.

The whole point is it’s meant to get to a point where it’s cookie-cutter. And don’t get me wrong, if we built JFC3, we’d already have a significant number of changes from JFC2.

Just Food: Is expanding into fruits like berries still an option?

Wilkin: With our R&D, we did berry trials and it’s still something we’re really interested in. It’s not something we’re doing right now, it’s more literally a time piece. The bit I find really cool that we’re doing with JFC1 is that we’re growing trees that are then ready to plant and growing them faster and with higher successful germination rates with the idea we can start diversifying.

When we look at something like tree planting and the tree planting targets we have in the UK, this is actually a very cool area.

Just Food: How are the two sites set up?

Wilkin: JFC1 is a big cavernous space, 17 layers high. JFC2 is 70 metres long, 15 layers and ten metres high. Within that unit, we have two eight-track systems, which control your humidity, your temperature and the airflow. We have 56 kilometre LEDs in there with the aim that we control how many hours of light the crop gets. Every input is controlled.

Just Food: What does the industry need to fast-track development and avoid companies failing?

Wilkin: We’ve never received any government grants. We haven’t had any and we’re still here but we’ve also got a fantastic bunch of investors that have backed us and we’ve been able to show progress.

It is challenging. Obviously, if there is more government support, that’s great but, for us, it has never been a focus. It has never been if we don’t have this we’re going to fall over. It has always been we need to show that in a tough environment, we can still make it work.

Britain or the UK has got this whole plethora of controlled-environment agriculture innovations or vertical farms. Why is it that the UK has still got the likes of Grow Up Farms or Fischer Farms or Perfectly Fresh or Harvest London or JFC? Why do we have so many that haven’t fallen over yet in the UK, despite that tough environment?

There is probably an element of how can we then hold on to us being a vanguard of this vertical-farming movement that seems to be surprisingly resilient here.

I think it does really come back to price. We have really benefited from our agricultural heritage. We have been unbelievably focused on just remembering it is a farm. It’s just got to work like a farm. You cannot short customers. You cannot sell at a silly price. It’s got to survive in supply chains. And, at the end of the day, you’ve got to do all of that over and over again, 365 days a year.

Just Food: What’s the biggest challenge for the industry?

Wilkin: We are measuring operating costs every single day and the aim is to get those costs down. Making sure we’re scaling fast enough and we’re managing our stock levels as any business does, as well as we can.

Also, making sure we’re always selling the right product. We’re going to be selling salads this summer but then, when you get into winter, have we got a strong enough range so that we can move and change with consumer demand?

Just Food: What’s the turnaround like from planting the seed to harvesting the crop?

Wilkin: Some of our crops are 12 days, some of them are 24. It depends, but it’s fast. For our basil, we will have three days in germination and 21 days to grow. It’s one of our longer crops but versus being grown in polytunnels in ten to 12 weeks from seed. It’s another thing to grow it fast and for it to match expectations and shelf life and for it to be the same size and spec.

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