GrowUp Farms CEO Mike Hedges on the Unbeleafable future of vertical farming

Mike Hedges is munching on a salad leaf. Not just any old salad leaf, mind. It is one of GrowUp’s Unbeleafable Zesty Baby Leaves, winner of the Champion of Champions accolade at The Grocer New Product Awards 2024.

For GrowUp’s CEO, the leaf – zesty enough to make some shoppers believe it’s infused with lemon juice – epitomises why he joined the vertical farming business.

“Everywhere I’ve worked, we’ve had the best-tasting product,” says Hedges, whose career has spanned the likes of Little Moons, Tyrrells and Proper. “So there’s still that same principle.”

Hedges considered two major questions before taking the helm of the company in November 2024: “Is there demand? And does it work?”

On the demand side, Hedges stresses its salad leaves – available under its Unbeleafable brand across the major mults, and Fresh Leaf Co in Iceland – are truly “mass market”. The meticulously engineered growing and packing process ensures a better-tasting, longer-lasting salad – “all the things people are looking for” – he claims.

That appeal is borne out by retailer appetite for the brand. GrowUp has more than doubled its distribution year on year, and in the past week alone, it’s added Ocado, Morrisons and Booths to its roster of retailers. The brand is also growing distribution in existing stockist Tesco, where it has the “highest repeat purchase rate in the branded bagged salad category”.

“What that tells me is, once we get into full distribution, everybody will start picking it up, and it will become a major brand,” he argues.

As for whether it works, Hedges is passionate about the science behind GrowUp’s 100,000 sq ft site in Sandwich, Kent. “It’s just staggering (a) how big it is, but (b) just the whole technology inside is amazing.”

For instance, the process is so refined that not a single person needs to touch the salad – from growing the seeds to packing the leaves. Meanwhile, scientists at its Leaf Lab in Cambridge are constantly testing and monitoring the crop to find the ideal growth conditions.

The tech was, of course, already in place when Hedges took the helm last year. What he brought to the role was experience as an fmcg leader. So as GrowUp CEO, his proudest achievement is more about people.

“What I’ve got experience of… is building great teams to grow great businesses,” he says. “The team here are exceptional at what they do, and what you need to do is get them working together so they’re all driving in the same direction. And that’s what we did.”

For Hedges, the team houses a perfect mix of skills – from the technical to the commercial. GrowUp has several “big hitters” from the fmcg world, he points out. Chairman Chris Britton was a senior figure at Diageo, while UK MD Will Howard comes from Ella’s Kitchen, and commercial strategy director Sally Rose spent over a decade at Innocent.

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These names were another reason Hedges decided to join GrowUp. “It was different to all of the other vertical farms in that it had a commercial team,” he says. “They’ve built a team that can not just grow the product, but sell it as well.”

That commercial acumen has been vital in securing listings. While retailers have been predominantly receptive, Hedges admits he has had challenging conversations on price – although he’s “never worked in a business where I didn’t”.

The crucial element has been explaining GrowUp’s proposition to retailers. An 80g bag of Unbeleafable salad costs £1.50 at Tesco – making it only marginally pricier than own label. “There is definitely some education you have to do,” he says. “We’re not super premium, we’re not niche, we’re competing in that mass market area.”

Educating consumers has been similarly important. That’s one motivation behind the latest refresh of its Unbeleafable brand, unveiled this week, which calls out its benefits more clearly on pack. Crucially, it carries the line ‘grown without pesticides’ at the top – which is “a massive win for everybody, not just for consumers”.

Expansion plans

The investment in a brand refresh is just one sign of growing confidence at the business. The farm’s output is “roughly 50% higher than when I joined”, says Hedges. Now there are plans to supercharge capacity even further.

Next year, GrowUp will double the footprint of its Sandwich site, which will result in a sixfold rise in production. At the same time, it will increase its headcount from just over 120 employees to 220.

It represents further exponential growth, points out Hedges. After all, back in 2021, there were only 15 people working at the business.

Since taking the helm, Hedges has been clear growth should come from salad, rather than new products. “It’s stick to what you know, and deliver it brilliantly.”

But Hedges does see opportunities for its salad beyond retail sales of its Unbeleafable brand. “There are other channels we’ll look at, like foodservice, and we’ll look at ingredients,” he explains. For example, pre-packed sandwiches and salads could be made with GrowUp’s salad leaves.

Together, these opportunities, Hedges believes, will enable GrowUp to continue its high rate of revenue growth – which hit 400% in 2023/24.

And crucially, Hedges is keen to stress revenue growth won’t come at the expense of profitability. While other vertical farms have struggled to make money – most notably, Jones Food Company, which fell into administration in April – GrowUp is set to reach profitability this year, Hedges says. He attributes that to a scalable business model and judicious use of 100% renewable energy, from a bioenergy plant next door.

Ultimately, Hedges believes vertical farming has a strong future ahead. As suppliers battle the impact of climate change, the benefits of a controlled environment are all the more pertinent, he points out.

“It has to be the answer. I don’t think it’s a matter of ‘if’, it’s ‘when’ every retailer will have their own vertical partner. I mean, it might not be in my time but everyone’s going to have one,” Hedges says. “Whether they build them and run them themselves, or whether we’re involved in that, I don’t know. But they have to do it, because they need resilience in their supply chain.”

The geopolitical climate – plus concerns over national food security – only add weight to the argument. “There are no cross-border deliveries, so geographically it’s good for retailers,” Hedges adds.

Talking of borders, Hedges also has big ambitions to grow internationally – the US is “a really big market”, and vertical farming could be “beneficial” in the dry Gulf states, he says.

But equally, he wants to expand its Kent farm even more – and he has his eye on the neighbouring plot of land. “See over there? In five years’ time, we want to be up there in that position.”