Growing Food and Impact: B Corp AppHarvest Creates New Model for Sustainability in Business
Giant Indoor Farm Attracts Investors with Approach to Nourishing Community and Consumers
At AppHarvest, a massive new indoor farm facility in Central Appalachia, Jonathan Webb has planted the seeds for a purpose-driven business model he hopes will help address the future food needs of a growing global population while nourishing the Earth and providing quality work opportunities for nearby communities. Location was really important to Webb: He founded AppHarvest in his home state of Kentucky, where the coal industry is in decline and unemployment levels are on the rise. It is the foundation of why AppHarvest became a Certified B Corporation — the community of more than 3,500 businesses around the world that look to benefit all stakeholders while also creating a profit — and for Webb, it’s simply the way that businesses should be run.
“The impact side of this is incredibly important. We didn’t chase certifications,” he says. “We just did the right things: We’re paying a living wage, we’re offering health care. It’s the right way to do business. And as a result, we get a huge ROI on our dollar.”
In the process, Webb and AppHarvest have attracted more than $150 million in funding and are becoming a public company thanks to enthusiastic support from investors. He shared more about the motivation behind the B Corp and his hopes for its future with me recently as part of my research on purpose-driven businesses.
Building and Growing the Workforce
While working in the solar industry, Webb saw how to build a business that benefits our environment as well as its workers. The inspiration for AppHarvest came in part from a National Geographic article on sustainable farming in the Netherlands, where indoor growing is part of a national agriculture network that relies on irrigation canals and other innovations. He traveled across the Atlantic Ocean to see the farmers in action, then decided it was a venture he wanted to pursue at home.
“Where we’re doing what we’re doing is incredibly important. One of our biggest competitive advantages, frankly, is doing it here,” he says. “Some of the hardest-working men and women are the people in this region that power the coal mines, and all we’re trying to do is tap into that and harness that passion. It’s good for our business, but it’s good for communities.”
The location has been to AppHarvest’s benefit in another way, Webb says, as local enthusiasm for the project enabled swift construction that likely would’ve been a challenge in some other regions.
“We built one of the world’s largest facilities in about a year, so speed and scale are definitely advantages for the company, and a lot of that’s possible based on where we’re operating here in this region,” he says. “A fundamental part of the way we’re building and growing this company is that every entry-level employee gets full health care, full benefits, living wage, paid time off. So we’re not just creating jobs, we’re creating a lifestyle for your career path.”
Long-Term Value for Investors
Producing needed food and building a stronger workforce aren’t the only goals at AppHarvest; Webb says growing produce sustainably, with minimal impact on the environment, also is a primary focus.
“The world is significantly land-constrained and water-constrained. We have to grow a lot more food and use fewer resources,” he says. “It’s simple in theory; it’s complex in scale. Just the fact that the place is so big is what makes this challenging. But we’re collecting rainwater on the roof and using it directly on the root of the plants. We’re growing hydroponically, and as a result we can use 90% less water than open-field agriculture.”
Thanks to its bottom-line success and future promise, AppHarvest has found favor with investors including Martha Stewart and venture capitalists who also bought into the company’s B Corp status and is part of a growing cohort of businesses with a social purpose that are finding traction in the public markets. The company announced in September that it’s going public through a combination with special purpose acquisition company Novus Capital Corp.
“Our take would be B Corp and benefit corporation are not a ‘nice to have,’” Webb says. “The companies that are not fundamentally building their business around those models are going to be stamped out by consumers, by regulators. They don’t hold long-term value creation for their shareholders.”
With support from its community and investors, AppHarvest has enjoyed early financial success and raised the B Corp profile in the emerging high-tech agriculture industry.
“We’re very fortunate that we’ve been able to build this directly into our business,” Webb says. “It’s just the right way to do business.”
B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
