November 26, 2013
Headquartered on Canada’s West Coast with facilities in British Columbia, California and Nevada, Windset Farms has been raising produce in greenhouses, using state-of-the-art technology and responsible growing practices, for over a decade. We talked with Steven Newell, Founder, CEO and President of Windset Farms, about the challenges of the expanding greenhouse produce market.
How did you and your brother come to be in the greenhouse business?
I was raised in a family where my dad was a surgeon and my mom was in the poultry business. My brother studied microbiology, and I studied commerce. When I was at university in Ontario in 1992, I decided I wanted to move back to the Greater Vancouver area to be closer to my family, and that I wanted to go into business with my brother John. My parents' banker who funded the poultry operation took us to a greenhouse vegetable operation, and we were pretty intrigued by it. My dad had thought hydroponics were the wave of the future. We knew from the very beginning it was very efficient and involved a great deal of technology, which interested us greatly. We felt that high quality greenhouse vegetables were congruent with consumer trends for eating healthier, tastier quality foods. We compared it to my mom’s chicken business, which saw terrific growth in the 80’s as demands for more convenient, healthier options displaced a lot of the demand for pork and beef. This was a result of smaller family units, more women in the workplace with less time to prepare dinner, and the growing trend of chicken as a healthier protein in modern cuisine – packaged and easier to prepare, but not compromising quality or taste. Protein choices were changing, and we felt that the produce sector would also change.
In 1992, I can remember a lot of produce items were not available year around. Peaches were only in stores for a short period of time. Now most produce items are available all year including tomatoes, bell peppers, cucumbers and berries. Growers are achieving higher yields with higher quality and better shelf life in most items in the produce industry. From producing in multiple geographic locations, using better varieties, more modern farming practices, and through better cooling and logistics, consumers can now buy many produce items all year long often at a lower price and with a better quality than 20 years ago.
When did the greenhouse business become a positive force in sustainability?
Sustainability awareness has been most prevalent in the last 10 years. We have been doing this for 20. Naturally, greenhouse growing is a sustainable business, but the importance of this trend emerged in the past ten years. Where there is an increasing lack of land available to grow crops, our greenhouses use 20 to 40 times less land than conventional outdoor farming. Where there are water shortages, we use over 20 times less water per tomato produced. We are executing our successful business model while simultaneously benefiting the environment.
As a pioneer in the greenhouse business, what advice would you give burgeoning entrepreneurs on what to expect or is essential to know when starting up a greenhouse business?
You have to be a master of many: finance, construction, people management, entomology, marketing, machinery. The key characteristic, though, is tenacity. You have to be extremely tenacious and never quit and never take no for an answer because there are so many obstacles all the time. That is why a lot of companies go bust in our business. A lot of things are out of your control no matter how much you manage your business. We have pests and diseases to deal with, markets can go up and down like a yo yo, and weather has an effect to some degree. Operationally speaking any one of these can have a big impact to your bottom line. The costs of running a greenhouse are huge, and they don’t stop. I compare it to running an airline or a hotel business.
How did you choose the vegetables you grow such as Adagio Baby Eggplants or Vivo Belgian Endives?
Eggplant is successful as a greenhouse vegetable and Costco has quite a demand for it. The endive, which is not a greenhouse product (our only one), we are helping to market through our system. We added the endive because we have known the family for quite some time (her husband built many of our greenhouses in Canada), and the quality is exceptionally good.
Butter lettuce is grown successfully in greenhouses, and there’s lots of opportunity to grow baby lettuce types. It is not currently a huge category because there are other companies that do it like Fresh Express and Dole. The average consumer is not used to using whole butter lettuce heads and greenhouse lettuce. There had been a trend away in recent years of the old way of tearing lettuce apart. We have opportunities to do the prepped lettuce pack and once we have some scale, we can do it in greenhouses. The lettuce is far more delicate coming from greenhouses and tastes amazing. This is definitely one for down the road.
What do you see as the key changes in this area over the next decade in terms of the supply chain from greenhouses to retailers?
We are seeing every type of buyer, not just traditional grocery retailers and big box retailers, but also food service operators concerned with food safety. Greenhouse produce is far safer from the pathogens that make people sick – i.e. salmonella, E. coli, and so on. Everyone is worried about the liability and lawsuits. It is the biggest worry buyers have and that will keep them up all night. Am I going to have a sickness like what happened with cantaloupes/melons or with Jack in the Box in the 80’s? Retailers want consumers coming back.
Also, because our system is so clean and so efficient, buyers are realizing they can have our safe produce year round. They don’t have to hear about floods or freezes slowing down the availability. We are selling to A&W in Western Canada as well as Fat Burger, and some restaurant chains in U.S. We are supplying cucumbers to McDonalds for their wraps because there are no seeds and no wax to take off and the product has a nice taste profile as it is more delicate.
Down the road, greenhouse production will get more and more of the market share. The business will continue to grow. Even the baby lettuces I mentioned before, they will be huge down the road. You can grow anything in greenhouses, and therefore, the potential is limitless.