You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. You might recall late last monsters of the high tech, greenhouse and vertical farm company app Harvest under some pressure after the company revised its preliminary fiscal year uh sales outlook. Well today, stock rallying after the latest update and fourth quarter just a dps bigger loss than forecast, but revenues were beat.
Stock was up more than seventeen percent. Mind you, the stock closing at three dollars and fifty three cents to share. So let's get a look at the business and the outlook. Jonathan Webb is the founder and CEO of app Harvest. Jonathan joins us on the phone from Morehead, Kentucky. Jonathan, how are you doing well? How about yourself? Hey, we're doing pretty well. We're glad to get some time with you this afternoon. We appreciate, we certainly appreciate you taking
the time. UM. I want to start with earnings in the most recent quarter, but think about it from the perspective of what you have coming up, not what what already happened. How are you thinking about two right now, I would we're quadrupling our farm network, diversifying crops. So we we we had a harvest, are growing uh, fruits and vegetables in a controlled environment, focused on year round
production here in the US. Our first facility here and more at Kentucky is is growing tomatoes, which we were targeting a lot of a lot of the imports coming in from south of the border. Uh. And then later this year we'll be growing leafy greens, salad greens, strawberries in more variety of tomatoes. So opening more farms, getting more crops to market, uh, and focused on getting good quality out to grocers all up and down the East
Coast and Midwest and southeast. Hey, what does it mean, Jonathan, for your growth trajectory in terms of I'm pulling up the f a function on the Bloomberg. Uh So looking at you know, revenue growth, it looks pretty dynamic when you look at two or three um like more than three year over year growth or year over year growth. But give us some idea of the ramp up with this. Yes, so,
we we've been under construction. UH really really proud of our construction team building some of the largest c A facilities in the world in the middle of a global pandemic. What does that mean? What does that mean? That designation? Uh, controlled environment agriculture. So you know, I try to say
the third wave of sustainability. Twenty years ago, it was renewable energy, ten years ago, it was electric vehicles, and today you know, you'll continue to hear the term c E A controlled environment agriculture using technology to grow fruits and vegetables a year round. Uh, not having to worry about climate disruption, using far less land, far less water. Um. But building those facilities in the middle of of of a global pandemic and the supply chain issues is has
been something our team has been able to navigate. And we'll be bringing those facilities online later this year, which is which is gonna dramatically increase our our production across multiple crop types. So when we see numbers like I say on the on the Bloomberg that talks about you know, more than revenue growth from that's pretty realistic. Yeah, you know, certainly that more could be even more. Um look forward
to seeing what the back half the year hold. But uh, yeah, we we we uh were pretty bullish and optimistic on on where we're headed. And last year was our first year of operations, so we had uh no, no, no, no operating history. Prior we were in over a thousand grocery stores from Kroger, Walmart, Costco, Publics. And the reality is the grocer demand and the demand from the consumer side, you know, well exceeds supply in the US. You have
this growing demand for control and environment. Product quality is much better, you don't have the harsh chemicals, uh, much better labor practices, you have reliability of crop that you don't have to worry about in an open field, and you don't have the import issues. Uh. And and you know, we build the company with good E. S G principles as our foundation. And and but ultimately the demand from the grocers is what's going to drive this industry forward. Well,
what are shareholders missing here right now? What are investors missing right now? Because we we we do have to talk about the stock price down significantly from highs last year in UH was trading around back in March of one. Now it's at three dollars and fifty three cents roughly. Um, what are they missing when it comes to the opp harvest story? Yeah, I'm focused on building and growing the company. I mean the stock I think when near to forty
five dollars last year and down to three bucks. I mean you all learn the public markets and and probably know that better than me. But uh, you know, we certainly got caught up in the in the spack craze, with the downward pressure on SPACs, downward pressure on innovation and tech. But you know, I'm bullish on American innovation, and those that want to bet against American innovation can uh, you know, try to determine what type of world they
want to live in. But this company here's head down on execution between now and the end of the year, and um, we're self sufficient and we're we're you know, continuing to raise and attract capital, uh from from good institutions that that will allow us to grow this business. That I think will set us apart from some of
other stories that have come to market. But uh, you know, as far as the stock price itself, it's you know, we're we're focused on getting you know, maximum shareholder value by doing what we can do, and I'm hopeful that the stock front price will reflect that here in the years to come. Hey, Jonathan, we're gonna take a break and come back and talk some more. But just forty just about thirty five seconds, do you guys regret going public through a Spack merger because of getting caught in
that down draft? Just quickly? You know, at this point we're focused on the future and what we're doing here today. Um, and you know we're focused on building the business. All right, We're gonna come back and talk more about building that business with Jonathan Webb. He is our guest here on Bloomberg Business Week, founder and chief executive officer of app Harvest, on the phone from Morehead, Kentucky. And as we mentioned that stuck definitely getting a papuas one of my gainers
and beyond the beltic. I gotta talk about drought and water conservation with him when we get to the other side here. You and I were just in California. It's my home stage started ravaged by drought, but it's where we get so much of our agriculture from. I agree and ramp up. Can you do it? Can you do it? Everywhere? This is Bloomberg. I want to get back to our guest with us right now is app Harvest founder and
CEO Jonathan Webb. Still with us on the phone from Morehead, Kentucky. Hey, So, Jonathan, for those who are not familiar, um, because we've had your team on before, to talk about what you guys
are doing, remind our audience how it all works. Yeah, so, uh app Harvest is building some of the world's largest controlled environment agriculture facilities, growing fruit and vegetables year round in a controlled environment, using less water than open field agriculture, getting roughly thirty times yield for acre um and and and offering reliable quality product to large grocers like Kroger, Walmart, Costco, Publix um And And this last year we were growing tomatoes.
This year we'll be growing salad, green strawberries, and tomatoes, distributing all across the US. And Jonathan, and when it comes from to a technology perspective, what is the technology that you've developed at Harvest that is patented or not necessarily you know, copyable. If somebody goes and sees how you do things, they say, wait a second, I can I can do this myself. Well, well, part of it's just sheer execution at scale. And I'll talk about the
technology in a moment. But our first facility and more head is nearly three million square feet in size. We're bringing about five to six million square feet of additional facilities online this year. To put that in perspective, the one facility alone, you could put fifty football fields inside it. So al. But we we acquired a robotics company that's focused on robotic harvesting UH and in AI picking in
order to better optimize yield production. UH and then one of the only facilities to run completely on recycled rainwater. We you know you were mentioning we're going to break about the droughts in California. We're we're in a water rich region. That's why we're building in eastern Kentucky, an
area of the country that's getting wetter. People have actually joked, well, Haliburton build water pipelines to the west, and while they do it from Appalachia to the west, but we're taking that rainwater, running completely on recycled rainwater here, so we're not reliant on city water at all. And and that is a fairly unique design and benefit to to what we're doing UH here here in uh the eastern half of the US. I have to say, whenever you guys are coming on and I Google and look for some
of the images. I mean, it's massive your facilities. Can you guys do this anywhere? Yeah, we've we've definitely, you know, we're we're focused on building our headquarters in central Appalachia where we can get to seventy of the US in a one day drive. Amazon is building the largest prime facility in the world in northern Kentucky right now, so they're right up the road. But yeah, it's you know, you look at the Middle East, who imports most all
their fruits and vegetables. We've we've been been in deep discussions for several countries there. We we invested in a technology red sea farms. UH. That's out of cows in Saudi Arabia. UH. And then you look at Southeast Asia, which is heavy demand, which which India and China have ten of the world's fresh water and of the world's population. We have to figure out how to grow a lot more food with a lot less resources, and using technologies is the only way to do it. Not to mention
tops so all getting a little tired exactly. We talk about fossil fuel extraction is being the only extractive industry and I'm sitting in coal country. We're mining nutrients out of the soil. We're not replenishing those nutrients where you know, Californias is tapping all their freshwater reservoirs to the point to where you know they're they're running low. Uh. We don't have a choice, and we're moving again. We're in
the infancy of controlled environment agriculture in the US. UM. But but I think over the coming decade, you'll see you know, just much like you saw EVS ten years ago and renewal energy twenty years ago, you're gonna see a lot of c A build all around the US. How do you think about expansion not just in the United States, but but globally as well to some of those countries that you mentioned. Is that something that you do at our harvest or do you license the technology
or let someone else take care of it. Yeah. Again, we're focused on getting our national footprint here uh, and and have have a couple of exciting opportunities we're working on that we've talked about that we hope we'll we'll get to fruition by the back half of this year in the US. But we're very cognizant. I mean, we we've had very uh, high level discussions in in both Middle East and Southeast Asia with countries that that Frankly, you know, you look at the chaos happening in our
world right now. I mean, everybody is trying to figure out how do we become resource resilient and self sufficient in some way, and part of that is growing food at home. And you know, there's no reason we're shipping food thousands of miles around the world when every country has the opportunity to to build systems, use technology and grow food right at home. And we definitely are gonna explore how we can be a helpful player in that transition.
But right now we're focused on our core business Here in the US, I gotta say, please right into something are Mike McLane, who covers the commodity markets here for US at Bloomber Intelligence, and he's got some research out, but he talked to us yesterday Greater North American agriculture commodity boom gaining momentum, and this whole idea of the geo of political risks that everybody's looking at, how do I produce at home so I can you know, save
myself against these kinds of stresses. Jonathan, thank you so much. Stay in touch. Jonathan Webb, founder and CEO at app Harvest on the phone from Warhead, Kentucky,