Co-operative coalition eyes ‘year-round income stream’ with Indoor Farms investment

Co-Alliance, which seeks to integrate indoor farming into traditional agriculture, had already bought two warehouses from the equipment maker last month.

Indiana-based Co-Alliance has made an equity investment in Indoor farms of America as it accelerates efforts to meet growing demand for “locally-grown” food.

The co-operative partnership, which did not disclose the size of its stake, said the move was “the final phase of its initial relationship” with Indoor Farms after buying two warehouse-style farms from the company in July.

Co-Alliance said its closer association with the Nevada-based group is part of a program to foster a greater embrace of indoor farming equipment among traditional operators as a means of diversifying family farms, add a “year-round income stream” and “bring the next generation back to the farm.”

The eventual objective, for adopters of these techniques, are new sources of revenue, better-spread risks and the ability to cater for sustained demand for local fresh produce.

“We are evaluating the commercial application and income generating potential of the farms here in Indiana so when we introduce the technology to our member-growers on a larger scale, we have a turnkey, replicable, scalable complete production process in place,” said John Graham, chief financial officer of Co-Alliance.

Ron Evans, president of Indoor Farms, added that the company’s aeroponic farms had grown 30 types of crops over the last three years, successfully producing greens, strawberries, cherry tomatoes, peppers, beans and edible flowers. He said the farms had generated “strong economic results” owing to “far higher yields in a given space.”

Indoor Farms in July said that it was in track to quadruple sales in 2017, its second year of commercial operations.

The deal underscores continued interest in indoor farming techniques. In July, Ontario-based Serruya Private Equity led a group of investors that injected equity into Hydrofarm, a manufacturer and wholesaler of hydroponic equipment and horticultural supplies. A month earlier, Spark Capital backed a $7.3 million Series-B round in hydroponic indoor farming company Freight Farms.