Dive Brief:
- Bowery Farming, Inc. is laying off 187 workers and reportedly closing operations as the once well-funded indoor farming sector struggles with financial setbacks and rising costs.
- The New York City-based company, previously valued at $2.3 billion and backed by celebrities like Natalie Portman and Justin Timberlake, notified workers of layoffs at two locations last week. According to WARN filings, 104 people lost their jobs in Bethlehem, Pennsylvania, and a facility closed in Nottingham, Maryland, affecting 83 workers.
- While no workforce notices were filed in regards to locations in New York and New Jersey, Bowery is ceasing all operations, effective immediately, Pitchbook first reported, citing an internal document verified by multiple employees. Bowery did not respond to multiple messages seeking comment from Mekong Farmer.
Dive Insight:
Bowery’s layoffs come after several indoor vertical farms shuttered their operations last year due in part to cost challenges and a lack of investor funding as consumer demand for premium produce wavers.
Despite raising more than $700 million in venture capital from leading firms and celebrities, Bowery reportedly told employees that it was struggling to secure financing in recent months and was looking to sell the company. However, according to Pitchbook, Bowery was unsuccessful in reaching a deal.
Bowery, founded in 2015, is one of the largest vertical farming companies in the United States. The company uses controlled environment techniques to grow pesticide-free leafy greens and herbs, including lettuce, kale and basil, and services more than 850 grocery stores and major e-commerce platforms like Amazon and Walmart.
The company opened its Farm X innovation hub in Kearney, New Jersey, next to Bowery’s original research and development center and first commercial farm in 2021. The following year, it opened a smart farm in Bethlehem, Pennsylvania.
Bowery’s closure comes after the company worked to expand its reach beyond the Northeast with the construction of two farms serving the Atlanta and Dallas-Fort Worth metro areas. In early 2022, Bowery took on $150 million debt from KKR to fund its expansion plans.
The debt has since weighed heavily on Bowery, Axios reported, and the company has entered an ABC process managed by Sherwood Partners. Sherwood did not immediately respond to a request for comment.
A number of indoor farming companies, including Aerofarms and AppHarvest, filed for Chapter 11 bankruptcy protection last year. However, Aerofarms was able to emerge fully funded and with a new CEO in September 2023.