Shenandoah Growers Poised for Growth in 2021

Shenandoah Growers Inc., a Virginia-based produce supplier that believes it is the nation’s largest provider of fresh organic culinary herbs and leafy greens, is scheduled to open three new growing facilities in 2021, bringing its total to 15. These openings will further expand the company's hold on nationwide distribution and allow its products to travel shorter, more carbon-footprint-friendly distances to customers.

Steve Wright, chief customer officer for SGI, told OPN Connect the three new facilities will be located in the Pacific Northwest, the South, and the Midwest. Its 12 existing facilities stretch from California and Washington in the West to Virginia and Georgia in the East, with more than a half dozen in between.

Steve Wright, Chief Customer Officer, SGI

The 30-year-old company, which specialized in greenhouse production of conventional herbs for many years, completed its transition to 100-percent organic crops four years ago and has also greatly improved on its indoor production, utilizing biofarms and vertical farming as well as its traditional greenhouse operations. It has also expanded its product line to include organic leafy greens in recent years.

Basil growing in vertical LED growing system at SGI

SGI is on the leading edge of the top produce industry trends since it combines organic farming, locally grown products, and high-tech production. Its website states it best: “At Shenandoah Growers, we believe in the power of technologically-controlled indoor environments to sustainably transform the future of fresh produce. As the only large-scale USDA Certified Organic soil-based indoor growing system in the United States, we are passionate about leveraging cutting-edge science and technological innovation to ensure that our customers receive the freshest, healthiest, most affordable organic produce possible year-round.”

The 30-year-old company, which specialized in greenhouse production of conventional herbs for many years, completed its transition to 100-percent organic crops four years ago and has also greatly improved on its indoor production, utilizing biofarms and vertical farming as well as its traditional greenhouse operations.

Wright emphasized that Shenandoah’s herb and vegetable output is “truly organic” since it is grown in soil. The company believes that through technology, it has recreated nature in an indoor environment. The cutting-edge vertical biofarms reduce land use by 75 percent and cut water and fertilizer use by 60 percent compared to Shenandoah’s own advanced greenhouse facilities.

"That's Tasty" SGI herb retail display

The Shenandoah executive did note that the company still does have some outdoor farms and emphasized that while the indoor footprint continues to increase, outdoor farming will not be eliminated.

The company’s innovation stretches beyond its farming techniques. Its product lines include 6 varieties of organic lettuces, 11 organic stir-in purees, 11 varieties of organic living herbs, and 33 varieties of fresh-cut herbs.

SGI believes that through technology, it has recreated nature in an indoor environment. The cutting-edge vertical biofarms reduce land use by 75 percent and cut water and fertilizer use by 60 percent compared to Shenandoah’s own advanced greenhouse facilities.

This year has been a challenging one for all companies, but the fresh herb category has done extremely well as more people are cooking at home and punching up their recipes with fresh herbs. Wright said that while all the herb varieties are registering year-over-year sales gains, basil remains the category leader, garnering about one-third market share—and it is still registering double-digit growth in sales over 2019.

SGI vertical growing operation in Virginia 

Wright noted that the top five fresh herbs (basil, mint, thyme, rosemary, and cilantro) account for about 80 percent of the category. He called thyme and rosemary “rock stars” as they have been on a significant growth spurt for several years. But this year, he added that everything has seen increasing sales and singled out lemongrass as an example. It is typically a low-velocity item, but it has also experienced double-digit growth in sales during the pandemic.

Wright said that while all the herb varieties are registering year over year sales gains, basil remains the category leader, garnering about one-third market share.

The conversion to all organic four years ago was both a recognition of what was going on in the marketplace as well as a solution to a company inventory issue. Carrying two SKUs of every fresh herb—one conventional, one organic—was duplicative considering the retail sales price is typically the same. Most retailers were only carrying one or the other. 

SGI BioFarm lettuce

“The sales velocity of herbs is just not that great that a retailer wants to carry two SKUs of the same item,” he said. “Even with double-digit growth every year, it is still a small category.”

Wright said Shenandoah did have to transition some of its customers that only handled conventional product over to the organic side. Though their numbers are shrinking, there are markets across the country with very small organic footprints.