2022 California Agribusiness Executive Seminar Case Studies
AppHarvest: Scaling Controlled Environment Agriculture
AppHarvest is a young company with a big vision. Under the leadership of a passionate founder, Jonathan Webb, and an experienced executive team, the Kentucky-based public-benefit corporation is building some of the world’s largest indoor farms in Appalachia—a distinctive cultural region in the Eastern United States that has long struggled economically. The goal is to create a technology-enabled, sustainable, scalable production system to replace imported fresh produce while providing high-quality jobs. The case will cover AppHarvest’s technology approach, marketing plan, and financing strategy.
Case Executive: David Lee, President
David is the President of AppHarvest, a leading AgTech company building some of the country’s largest indoor farms and combining conventional agriculture techniques with cutting-edge technology to grow affordable, nutritious fruits and vegetables at scale (Ticker APPH). In his role, David leads strategy, sales, finance, M&A, and marketing.
Previously, David was the COO & CFO of Impossible Foods, a Khosla, Horizons, and Bill Gates-backed company developing a new generation of delicious and sustainable meats and cheeses made entirely from plants. Its mission is to give people the enjoyment of food that comes from animals without the health and environmental drawbacks. From 2015-2019, he led the business functions to transform Impossible from pre-revenue to hyper-growth, with global sales and a complete commercial manufacturing and supply chain capability. Prior to his work there, he served in leadership roles at Del Monte Foods, Zynga, and Best Buy.
David is on the Board of Crew, a Greylock and Sequoia-backed technology startup empowering front-line mobile workers with software to connect them to each other and employees. He is also on the Board of AppHarvest and Benson Hill, innovative companies transforming food and agriculture.
David is a Fellow at the Council of Korean Americans (CKA), based in Washington, D.C. and a Fellow of the Network of Korean American Leaders (NetKAL). He received his MBA from the University of Chicago and a BA from Harvard College. David resides in San Mateo, California, with his wife and two daughters.
Driscoll's: Farm Labor Uncertainty—Where to Invest
Fresh berries are a success story. Per capita U.S. consumption of the major fresh berries—blackberries, blueberries, raspberries, and strawberries—doubled and tripled over the past three decades, making the retail value of fresh berries $6 billion a year, or 20% of fresh produce sales. Consumption is expected to continue to increase with affluence, health consciousness, and year-round availability.
Strawberries are half of annual berry sales, and California accounts for 90% of U.S.-produced strawberries. The three major production areas, Oxnard (with 9,000 acres), Santa Maria (with 12,000 acres), and Watsonville/Salinas (with 15,000 acres), account for 99% of the state’s 37,000 acres. Santa Maria has the longest growing season, and faces a shortage of strawberry pickers.
Many of the workers who harvest strawberries are legal and unauthorized Mexican-born workers who arrived in their 20s, settled in the United States, and are now in their 40s; their U.S.-born and -educated children rarely follow them into the fields. The H-2A workers in their 20s who make up a growing share of the harvest workforce must be provided with free housing while they are employed in the United States.
Market leader, Driscoll’s, provides proprietary varieties to its 100 U.S. growers and markets their berries. There are three major options to get berries picked in the future: 1) mechanize harvesting, 2) employ more H-2A workers, and 3) import more strawberries from Mexico. Should Driscoll’s build housing and expect its growers and their farm labor contractors to pay $10 to $12 a night to house their H-2A workers?
Case Executive: Soren Bjorn, President
Soren Bjorn is President of Driscoll’s of the Americas, the leading global brand for fresh berries. In his role, Mr. Bjorn leads the largest business unit for Driscoll’s and is responsible for all aspects of the business enterprise, from the strategic planning process to its financial success. Family owned for more than 100 years, Driscoll’s works with more than 900 independent growers around the world to create shared value in the communities where Driscoll’s berries are grown.
Soren has been with Driscoll’s for more than fifteen years and has led several key functional areas. He served as the company’s first Senior Vice President of international business and was responsible for oversight of Driscoll’s Europe, Middle East, and Africa business, an Australia-based joint venture, and a new start-up venture in China. In addition, Soren has led Driscoll’s global research and breeding programs that focus on developing proprietary seedlings to deliver great tasting berries to consumers. This superior flavor is a competitive differentiator and one of the primary reasons Driscoll’s is the market leader in fresh berries.
As a seasoned executive in the food industry, Soren spent six years with Del Monte Foods in San Francisco. There, his responsibilities included outsourcing manufacturing operations globally and the management of the company’s sales and operations planning department. Soren also held the role of President and CEO for UniMark Foods, Inc.
Soren grew up in Silkeborg, Denmark. He earned an MBA from Texas Christian University (TCU) in Fort Worth, Texas and a BBA from Baylor University in Waco, Texas. Today, Soren lives on the California Central Coast and is the father of three boys.
Glenn-Colusa Irrigation District: Managing the Most Valuable Commodity in California
Water scarcity, supply resilience, and environmental regulations are challenges facing all California water users. Glenn-Colusa Irrigation District (GCID), located in the Sacramento Valley, is facing these challenges in a region seldom headlining California water debates. Meeting the needs of its landowners and water users in a sustainable way requires ongoing assessment of the factors influencing water supply and demand in the district and elsewhere. With water "more valuable than gold" in some years, how should GCID's management and board proceed with respect to new infrastructure projects, potential water transfers, and rate structures?
Case Executive: Thaddeus Bettner
Thaddeus Bettner is General Manager of the Glenn-Colusa Irrigation District, the largest water district in the Sacramento Valley, covering 175,000 acres of land. The district has some of the most secure water rights in the state and serves rural communities, protected federal wildlife refuges, and farmers that use the water to grow rice, along with 40 other crops such as walnuts, almonds, and tomatoes.
JV Smith Companies: Farming in Mexico and Finding Workers in the U.S
JV Smith’s El Toro division operates in the Mexicali Valley of Baja, California. The Andrés Manuel López Obrador (AMLO) government is embarked on a fourth transformation of Mexico that involves using state-owned energy firms such as PEMEX and CFE to uplift poorer Mexicans with policies that follow the principle of el bien de todos los pobres (for the good of all, the poor first). Should Smith invest more in Mexico at a time of declining foreign investment due to uncertainties about the effects of AMLO’s nationalist policies, an uncertain security situation, and rising labor costs and inflation?
Smith is a wage and benefit leader in the U.S., where farming operations have an aging and settled workforce. Smith created AgSocio to do H-2A right by ensuring that Mexican H-2A workers do not pay for U.S. jobs, are housed in apartments while in the U.S., and are treated fairly by supervisors. The result is a productive, but expensive, H-2A workforce. How should Smith balance further investments in AgSocio with investment in labor-saving mechanization?
Case Executive: Victor P. Smith, CEO
Vic Smith is CEO of JV Smith Companies, a diverse group of operations with farming, cooling and distribution facilities, and shipping capacities in Arizona, California, Colorado, and Baja, Mexico. Skyview Cooling was the companies’ first operation, formed in 1970 as a cooling company in Colorado and New Mexico. By 1977, it had expanded to Yuma, and then in 1982, it began operations in northern Mexico. Today, JV Smith Companies farm several commodities, including romaine lettuce, iceberg lettuce, spinach, celery, mixed leaf and organic spring mix, carrots, and green onions.
Mr. Smith studied Economics and Business Law at the University of Colorado from 1970–1974. He went on to study Finance at Arizona State University in 1975. Since 1991, he has overseen all the companies’ farming, packing, and cooling operations, including over 32,000 acres of vegetable production annually. Mr. Smith is currently on the Board of Directors for the Center for Produce Safety, Equitable Food Initiative, Brighter Bites, and iFoodDecisionSciences, Inc. He is also a member and previously served on the Boards of United Fresh Produce Association, Produce Marketing Association, and Western Growers.
Nugget Markets: e-Commerce and Food Retail—Growth at the Cost of Profits?
Although digital grocery sales have been available since the late 1980s, growth was anemic for decades. But by 2015, driven by the technology and war chests of the very largest retailers—e.g., Walmart, Kroger, Amazon—sales began to take off, even before the COVID-19 pandemic, and nearly all major supermarket chains had added some type of “omni-channel” option. In an industry otherwise characterized by glacial growth, retailers could not ignore the recent double-digit growth of e-commerce and believed that this new channel was key to capturing the new generation of shoppers comfortable with handheld technology. Digital sales were projected to account for 20% of overall supermarket revenues, a $1.5 trillion industry, by 2025. Yet, one problem: no one was making any money.
Nugget Market is a family-owned, upscale supermarket company in Northern California with 16 stores. The Stille family owners are proud of their 100-year history of food passion, unsurpassed service, devoted customers, and 16 years of having been recognized by Fortune Magazine in its list of “Top 100 Companies to Work For.” But, they are also committed to “constant improvement” and wonder if their belief not to chase unprofitable sales is a mistake. Moreover, they worry that they could be falling irreparably behind by not offering a digital component to their successful business model. This case discussion will highlight the challenges of a regional food retailer facing ever more concentrated competition and will focus particularly on the complex decision of whether to add e-commerce to their operation.
Case Executive: Eric Stille, CEO & President
CEO and President of Nugget Market, Inc., Eric Stille is a fourth-generation grocer dedicated to creating an extraordinary grocery experience for the greater Sacramento Valley, Marin County, and Sonoma communities. Nugget Markets has been family owned and operated since the first store opened in Woodland, California in 1926, and is known for a dynamic culture of fun, family, supportive camaraderie, and servant leadership. When Eric took the helm in 1990, he brought a bold spirit of innovation with a special focus on making grocery shopping fun again, so that every guest feels they’re experiencing something special the moment they step inside. Along with the stores’ unique European-marketplace setting, their commitment to quality and service set them apart from the competition. Under Eric’s leadership, Nugget Markets has also been recognized on FORTUNE Magazine’s “100 Best Companies to Work For” list for 16 consecutive years. He attributes this honor to the company’s amazing team of positive and talented associates and their dedication both to world-class service and having fun at work. Eric is a graduate of Santa Clara University with a degree in finance and an emphasis in management. He is married to Kate Stille and they have three children and three grandchildren.
Case Executive: Kate Stille, Chief Impact Officer
Chief Impact Officer and co-owner of Nugget Market, Inc., Kate Stille served as Director of Marketing & Communications for the company for 18 years and still works closely with the marketing department to oversee external communications (public relations and public and government affairs), as well as philanthropy and sustainability. For more than 30 years, Kate has been actively involved in Nugget Markets’ local communities, serving on a variety of community boards and commissions spanning from Marin and Sonoma counties to the Sacramento Valley and foothill region of the Sierras. Currently serving as Chair for the Sacramento Region Community Foundation Board of Directors, Kate actively engages in the development of the Sacramento Region’s Food System Action Plan and a number of different strategic initiatives. She also serves on the Board of the Yolo Food Bank, leading their advocacy efforts, and is a member of the Healthy Davis Together Task Force, Yolo County Vaccine Workgroup, and National Grocers Association’s Government Relations Committee. Kate is a Senior Fellow of the American Leadership Forum, Class XIV, and an alumna of UC Berkeley. She is married to Eric Stille, and they have three children and three grandchildren.
The Better Meat Co.: A Better Approach to Scaling Alternative Protein Production?
During the pandemic, the plant-based meat market in the U.S. grew by 45% to $1.4 billion. But many doubt that this trend will continue into the future, as the plant-based dairy market has, due to the many challenges involved in scaling up operations affordably. The Better Meat Co., founded in 2018, takes a unique approach to increasing its impact on agriculture by blending meat with plant proteins to increase meat’s quality and sustainability. An early partnership with Perdue farms on its Chicken Plus blended chicken tenders won national taste tests. In June 2021, the West Sacramento company launched the second-largest mycelium fermentation facility in the world to produce Rhiza, a proprietary high protein, high fiber, whole-food mycoprotein. This case explores The Better Meat Co.’s strategy for scaling up sustainably and marketing its product to a broad audience, including potential partnerships upstream and downstream in the supply chain.
Case Executive: Paul Shapiro, CEO
Paul Shapiro is the author of the national bestseller “Clean Meat: How Growing Meat Without Animals Will Revolutionize Dinner and the World,” the CEO of The Better Meat Co., a four-time TEDx speaker, and the host of the Business for Good Podcast.