Back to the future

Paul Sellew grew up in and around horticulture.

“I'm a New England farm boy,” he says. Growing up, his family ran Prides Corner Farms in Connecticut. His brother, Mark, still runs the family business today.

Sellew, though, pursued his own version of a horticulture career. He attended Cornell University, where he studied horticulture. There, he was exposed to the ideas of the late Louis Albright. Albright, a pioneer in greenhouse energy systems, coined the term peri-urban to refer to growers located just outside of urban markets that produced food for urban markets.

“Prior to World War II, peri-urban ag was how the food system worked,” Sellew says. “That changed as suburbs expanded and led us to what is here now.”

Sellew also founded Backyard Farms, a greenhouse tomato operation in Maine that he left in 2014 and was later sold to Mastronardi Produce in 2017. Today, he runs Little Leaf Farms — a baby leaf lettuce operation that is a synthesis of his experience growing up in horticulture, his education at Cornell and his first business.

“It’s a model that really delivers, I believe, the best quality lettuce in the world,” says Chris Hill, Little Leaf's chief revenue officer.

DIALING IN ON A BUSINESS MODEL

Little Leaf Farms’ original facility is a 10-acre greenhouse in Devens, Massachusetts — about an hour outside of Boston. Devens, Sellew says, was the choice with the idea of peri-urban agriculture in mind. The facility allows them to serve a major urban market and the broader New England region, but also build a big enough greenhouse to grow lettuce densely.

Lettuce, Sellew says, was also an intentional crop choice. With tomatoes, he felt the market had already been figured out and was saturated even if Backyard Farms was successful. Production methods had largely been standardized, too, he adds.

“Baby leaf lettuce, which was the genesis of Little Leaf, had not been figured out when I started Little Leaf,” he says. “And now look at the array of companies out there now — vertical farms, different kinds of greenhouse operations. There are so many ways it’s being approached. And that’s the sign of an early-stage market.”

“Markets are really good at figuring things out,” he adds. “And I feel what we have learned and pursued at Little Leaf is the right way because that’s translated into market success where with the slew of announcements with what’s happening with others, they’ve not had that same commercial success we have.”

At the core of Little Leaf’s business model is also a blend of technology and people.

“Do we understand technology? Are we technologists? Absolutely yes,” Sellew says. “But it’s really about farming and growing. And that is a people-based business.”

The people at Little Leaf include Hill, who worked in salad sales at companies like Fresh Express and Dole for 20-plus years. It also includes a robust growing team, headed up by chief growing and R&D officer Pieter Slaman. Sellew recruited Slaman from The Netherlands after a mutual industry contact recommended him.

On the technology side, Little Leaf uses a mobile gutter system. The lettuce is grown hands-free throughout the entire process with the aim at limiting the chances of contamination. That is paired with environmental controls, lighting and other components picked specifically for their quality.

“Our quality and the consistency of supply is the main thing that I see that separates us,” Hill says. “We can hedge the weather impacts. It’s very hard for pathogens to enter our greenhouse. I know it’s happened at other places, but the controls we have on the water tech, for instance, makes a huge difference.”

“You need to give the people the best tools in the world. I think we have,” Sellew says. “Nobody touches anything. Everything is cut, packaged and delivered within a 24-hour cycle.”

“Easy to say,” he adds, “but it’s hard to do.”

DRIVING SALES

According to Sellew and Hill, Little Leaf’s market share has grown significantly since the company was founded. Eight years ago, they say, packaged greenhouse-grown lettuce only made up 1% of the overall lettuce market. Today, it’s 4% — still not massive, but growing year over year.

Sellew and Hill, citing Nielsen data, say that they have achieved a bigger footprint in their region. They say Little Leaf has a 20% market share in New England and a 10% market share in the Northeast overall. In the region, they say they specifically have outsold Fresh Express and Dole.

“CEA is in the early stages like kits when they started out,” Hill says. “Consumers were buying them, they got it, but they didn’t understand the full benefit of it. But I think consumers are starting to get the benefit of the consistent supply.”

Currently, they are in 5,000 stores, ranging from regional players like Stop & Shop and Big Y to national players like Walmart and Whole Foods.

“They look at us like we have a lot more capability to grow within that national footprint,” says Hill about working with national players.

As they grow and build new facilities, Sellew says the plan is to keep their SKUs limited and remain focused on the leafy greens category. Currently, Little Leaf has four products in its line: Crispy Green Leaf Lettuce; Baby Red & Green Leaf; Baby Spring Mix; and Sweet Baby Butter Leaf.

“We are focused on leafy greens. That’s our focus,” Sellew says. “That’s our focus.”

Little Leaf is expanding with salad kits and with deli partnerships. This fall, they will launch two salad kits — Caesar and Southwest — at select retail partners. Hill says their research shows their target customer was already buying salad kits, but not from Little Leaf.

“[Kits] are about convenience,” he says. “Kits have emerged because the ingredients in kits have improved over time to where the dressings and the cheese are much higher quality. It’s the avenue we are offering to the consumer, to take advantage of that and offer them something they’ll like and then keep buying.”

Hill says Little Leaf has found a growing niche by offering delis more dependable lettuces for their pre-made wraps and sandwiches.

“We’re a grower, we’re a marketer and we’re a packager of branded food,” Sellew says. “But we’re rooted as a grower. That’s my background. I brought over Pieter from Holland. He has built a fabulous growing team. We’ve combined that with great day-to-day execution that is headed up by my head of operations Chris Sigmon and then we’ve combined that with producing a high-quality, consistent product that we then deliver to our customers.”

WHERE LITTLE LEAF FARMS IS HEADED

According to Sellew, the Little Leaf facility in Devens hit its capacity at 10 acres due to being surrounded by conservation land. So, they looked to expand outside of the state.

The first facility outside of Massachusetts is the company’s 10-acre facility in McAdoo, Pennsylvania, with another 10 acres coming this fall and then a third facility planned for the state. Those locations — as well as any future ones — were picked for the same reason as the original one in Devens: They fit the model of peri-urban agriculture Little Leaf is built on.

Each build is also measured — both financially and in terms of scale.

“CEA, the way we do it, is a capital-intensive business,” Sellew says. “We have been able to attract really great investment capital from some great groups of people, great companies, and combine it with debt financing through our providers of debt, Bank of America and the farm credit system. So we’ve been able to attract and deploy that capital at a measured pace.

“I’m so thankful that when we started, I only started with one 2.5-acre greenhouse,” he says. “We didn’t know what we didn’t know. Each subsequent build is better than the last one. That’s part of our culture.”

Further expansion to new states, Sellew says, will happen, as long as the markets demand it and consumers continue to buy Little Leaf lettuce.

“The ornamental word, the produce world — it’s a free market,” he says. “We don’t get subsidies. We aren’t the corn or soybean guys. This is a true free market.”