Rooftop Empire

For greenhouse growers, the siren song of growth and expansion is undeniable. It whispers increased yields, broader markets and greater financial stability. But like any seductive melody, it masks a treacherous undertow. While brimming with potential, challenges lurk unseen, ready to overwhelm with complexities, resource strains and logistical nightmares.

A fundamental entrepreneurial principle, especially relevant for greenhouse growers, is that expansion should be a deliberate strategic decision, not solely a reaction to opportunity. This principle rings true for Brooklyn, New York-based Gotham Greens, which has navigated numerous recent expansion projects with calculated precision. Led by the visionary leadership of co-founders Viraj Puri (CEO) and Eric Haley (CFO) and Chief Greenhouse Officer Jenn Frymark and supported by a dedicated internal team of horticulture pros, Gotham Greens carefully examined every expansion challenge and established effective best practices. This has empowered the grower to overcome the complexities of a revolutionary way of growing and providing fresh produce in the U.S.

Today, Gotham Greens is synonymous with urban agriculture and cutting-edge, sustainable growing practices, and its growth and expansion wouldn’t be done justice without highlighting its rapid ascent in the greenhouse grower market.

Its legacy is rooted in the heart of Brooklyn, New York, an urban, culturally diverse foodie paradise. In 2009, Puri and Haley collaborated on a shared dream to provide fresh, pesticide-free, sustainably grown produce directly to local communities. Two years later, the vision materialized on a Greenpoint neighborhood rooftop with Gotham Greens’ first 15,000-square-foot soilless hydroponic greenhouse, marking a milestone in traditional farming. At its heart, this revolutionary model addressed long-held agricultural challenges — how to overcome long distances, mitigate environmental impact and provide greater access to fresh, locally produced foods.

Greenpoint’s resilient and responsible food system model paved the way for a second greenhouse atop a Whole Foods in neighboring Gowanus in 2013. Two years later, Gotham Greens opened larger greenhouses in the New York City borough of Queens and in Chicago. Their agronomic practices minimize water and energy consumption and maximize produce quality and yields with LED lighting, hydroponic farming ideal for leafy greens, and solar collectors. According to the company, its operations utilize up to 90% less water and 97% less land compared to traditional farming. And in addition to leafy veggies, Gotham Greens creates new job opportunities, employing hundreds across its greenhouses where it puts down roots.

Today, the hydroponic greenhouse grower owns and operates 13 facilities across nine U.S. states, and consumers can find its products in refrigerated coolers at retailers like Whole Foods Market, Kroger, Sprouts Farmers Market and Amazon Fresh. Earlier this year, Gotham Greens opened its largest facility to date, a 210,000-square-foot high-tech greenhouse in Seagoville, Texas, just south of sun-drenched Dallas. They manage nearly 2 million square feet of growing space.

Innovative technology integration; a focus on high-quality, sustainable, locally sourced production; strategic partnerships; and community engagement have contributed to Gotham Greens’ success and serve as an essential blueprint to replicate its practices, grow market share and pursue opportunities to expand its reach as an indoor farming leader.

Puri says this is a very exciting time for the industry, and produce growers are influenced to expand the size and scope of their operations due to the increasing retail and consumer interest in greenhouse-grown products.

“The future is very bright,” he says. “Growing in a greenhouse provides a lot of control in the growing environment, creating these ideal conditions to thrive. It provides a lot of supply chain resiliency to our customers. And it’s more important now than ever to bring this innovation of greenhouse-grown, high-quality produce closer to the customer.”

However, Puri cautions greenhouses are very capital-intensive, and operating expenses — energy, labor, transportation and material costs coupled with aggressive regulatory changes — have risen in recent years. He’s witnessed numerous greenhouse operations expand too quickly, build too much space and then find themselves in trouble.

“That can be a black eye for the rest of the industry,” he says. “So, I would also urge prudence and good judgment.”

Puri and Frymark share their experiences and strategic insights to help greenhouse growers navigate their growth journeys and sustain long-term success in today’s market.

SUCCESS STARTS AT THE TOP

Leadership demands conviction. For a greenhouse expansion, the owner must believe the rewards will outweigh the risks. “It’s like leading troops into battle … you must have confidence and vision,” Puri says. “And you need a dogged determination to get buy-in from arguably your most important stakeholders — the team you have around you.”

Blind faith has no place in expansion decisions. Instead, meticulous data analysis and due diligence are paramount to overcoming the pitfalls — overbuilding or underestimating — inherent when planning a project’s scale, Puri says.

“A lot of time goes by between project inception to harvesting your first product and shipping it [to market],” he says. “These are very intensive real estate and development projects. They take a great deal of design and engineering time, along with extensive permitting and regulatory approvals.

“On top of that, the produce business is a very dynamic business,” Puri adds. “And a lot can change in those couple of years between project inception and project completion.”

Therefore, success demands adaptability. Puri says growers must prepare themselves to pivot and adjust to changing circumstances. “A leader must strike a balance between that dogged determination to finish a project and being flexible in their leadership to do what’s right [for the business],” he adds.

Leadership thrives on teamwork. Everything from day-to-day operations to strategic planning to managing an ambitious expansion initiative hinges on a collaborative approach. It’s a fundamental pillar to their long-term success, Puri says, and it extends beyond the company’s walls.

“This is a very complicated industry. You must have diverse perspectives and skill sets and [team members with] technical knowledge of greenhouse engineering and architecture, plant sciences, finance, real estate development, supply chain logistics and sales and marketing,” Puri says. “We have great industry partners. And we have a board of directors that provides us with key guidance and helps us form priorities for the company. So, it’s critical that a grower has a team approach [for strategic growth].”

Frymark echoes Puri’s assessment, emphasizing a commitment to strength-based leadership, to which she attributes her team’s success at Gotham Greens.

“Everyone is not good at everything,” she says. “So, there’s a test that I love to give the growing team to identify people’s core competencies because you don’t want to spend all of your time fixing the weakest links. You won’t get very far. Instead, focus people on where their interests lie and what they do best.”

Frymark exemplifies this management philosophy with writing a Standard Operating Procedure (SOP) for an expansion project. Frymark leverages individual strengths.

“You have so many different minds in an organization. One mind knows how to build a template and another mind can get things organized. And then you have another mind who is an expert on a subject matter,” Frymark says. “We work really hard to ‘tag team’ [tasks] based on individual strengths to get a project done successfully.”

PLANTS PAY THE BILLS

Expansion projects demand strategic tailoring. Each scenario presents a grower with unique challenges, from introducing a new crop to acquiring existing facilities or venturing into new geographical markets. Recognizing and addressing these challenges from the outset is crucial for any grower to achieve success in an expansion project, Frymark emphasizes.

“There’s no one playbook,” she says. “In some ways, it’d be easier if we were just stamping out the same thing 13 times all over the country so that you walk in and say, ‘Hey, this is a Gotham Green facility.’ It just doesn’t work that way. There’s no one right way to grow, but there are a lot of ways to put a good business together.”

A robust plan forms the cornerstone of successful expansion. Frymark advocates for a plant- and quality-focused foundation and building every element — from how information is communicated to corporate culture to best practices and procedures — around this central principle.

“The plants pay the bills,” Frymark says. “That’s my mantra across everything and all the decisions that need to be made. The plants pay the bills around here.”

As Gotham Greens’ footprint expanded to 13 locations, the company adopted a more decentralized approach to its management philosophy, Frymark says. Each new region, facility size and even vendor or technology partner presents different challenges. This necessitates the development of profit-and-loss statements for each location to account for revenue, costs and expenses and how they interplay with yield and plant quality, she says.

“So, for example, I built this facility in the most sustainable way to grow more with fewer resources, but is it financially self-sufficient? And will the plants agree with what it says in Excel and what your business model says?”

Every decision in an expansion, from initial planning to technology selection, must prioritize fostering ideal plant growth and yield, emphasizes Frymark.

TECHNOLOGY

Gotham Greens’ success is deeply intertwined with technology integration, but new markets pose unique challenges to growers.

As Frymark explains, several factors influence technology in a new site. For example, facility size, especially a larger footprint, will necessitate more automation for efficient operation. Geography will influence the necessary investment in climate control and lighting systems to adapt to challenging environments. “But [the technology] must also integrate with your existing system. So, with an expansion, I would think you are often making tweaks and improvements. Still, it depends on the type of expansion and whether you’re fundamentally changing your processes [to accommodate the technology].”

However, Frymark emphasizes the importance of purpose-driven technology adoption and cautions growers to avoid unnecessary expenditures for technology’s sake.

“That investment needs a reason,” she says. “What do you need it to do? Is the ROI truly there? Sometimes, it’s very easy to see something as a shiny object or something that someone else is doing and think that is a better way to do things. And that’s not necessarily true. There are a lot of levels to technology, and the higher the level [of that technology] isn’t automatically better.”

PROS VS. CONS

For Gotham Greens, expansion is a strategic blend of proactiveness and responsiveness. Sometimes, they seek new opportunities, and occasionally, an opportunity lands on its corporate doorstep.

Puri explains: “There’s a definite push and pull from this industry. There’s a pull from retailers and consumers saying it’d be wonderful to have our products in this region or that region. There’s also a push from the standpoint that we believe we’re good operators, we produce a really quality product and we’ve built a brand people have come to love and trust. So, we want to put more products out there. So, it’s a little bit of a balance of both.”

An expansion opportunity demands meticulous analysis by the grower, not just starry-eyed optimism. Therefore, Puri says every opportunity requires a thorough examination of its pros and cons, and he advises not shying away from asking the hard questions. For example:

Market suitability: Does this specific geographic location align with your business model?

Infrastructure adequacy: Are the necessary infrastructure elements in place to support your operations? Will it require new construction? What are the costs associated with retrofitting and modernizing to support your crop needs?

Workforce availability: Is there a skilled workforce readily available within the region? Will they be there when you need them?

Financial viability: Do the projected profit-and-loss statements demonstrate a positive return on investment (ROI)?

Funding accessibility: Can you secure the necessary financial resources to develop the project?

Contingencies: Have you factored in budget overruns, supply chain logistics, permits and approvals, tech integration challenges and regulatory changes?

Timeline: Will the project — from inception to completion — become viable within a two-year timeframe? Could it take longer, and what would be the consequences?

Team preparedness: Is your team equipped with the expertise and resources to execute the expansion plan? Are the right people in place?

Ultimately, financial prudence is critical in any expansion decision, Puri says. “My advice is that you really need to ask yourself if [the expansion opportunity] is financially right for your business. I mean, if costs are going to be too high to generate a good return on investment of capital, then this is a good fork in the road to rethink the project.”

A veteran journalist and frequent contributor, Mike Zawacki has written about various aspects of the green and horticulture industries for the last two decades.