If any company perfectly embodies the concept of commercialism, it’s Walmart. The mega-company established in Bentonville, United States, with its more than 400 stores in Canada, has become the true symbol of mass commerce. Import at the lowest price, at all costs, that is Walmart’s motto. Its logistics are so efficient that opening a store can sometimes lead to a deflationary effect on its immediate market, totally contrasting with the values of locality, terroir and simplicity.
However, in a stark contrast, Lufa Farms, one of the largest urban farms and one of the largest rooftop greenhouse operators in North America, has opened a fifth greenhouse on the roof of a Walmart at Market central. A Walmart. Seeing these two companies coexist, a fact at first glance surprising and even disturbing for some, unites Lufa farms, a symbol of local, natural production without synthetic pesticides in an urban environment, with the giant often accused of harming local commerce.
The 126,000 square foot greenhouse, where cucumbers and peppers are grown, uses cutting-edge technology from the Netherlands, allowing the company to produce 40% more efficiently. The objective is to produce more at lower cost while maintaining the values of quality and local production to satisfy the approximately 68,000 subscribers that the company already has.
Like any business, Lufa Farms aims to increase their turnover and expand their market. With now more than 560,000 square feet of greenhouses, Lufa Farms’ production capacity has reached an interesting level. The company is even considering selling its products to its occasional neighbor, Walmart, solidifying an unexpected alliance. But for Lufa, there is always more to accomplish.
Ordering from Lufa Farms is child’s play: place your order online and receive your food within a few days. For three days after purchasing online, you can even modify your order if your needs change. The producer delivers everywhere, up to 250 kilometers from Montreal.
Inflation has certainly forced many customers to review their food budget and change their purchasing habits. However, the food landscape has evolved significantly, which could benefit the company in the long term.
First, there is a growing desire among consumers to favor local products to reduce their negative impact on the environment. With price fluctuations and climate change disrupting the planet, localized production like that of the Montreal producer is advantageous.
Prices at Lufa are slightly higher than cheaper products on the market, which makes sense given the niche, smaller-scale nature of production compared to the vast fields of California or Arizona. But this is less and less the case.
It is important to note that prices of all products have increased over the last four years, and especially over the last two.
Prices of fruits and vegetables have increased by an average of 32% in Canada over the past four years. Although it is not possible to know the exact price increase of Lufa Farms, it is certainly not 32%. In fact, our preliminary reports on public markets suggest that prices in these markets have increased by about 15% on average. In other words, the gap between traditional products and specialty products has narrowed in recent years.
A recent study published in the Journal of Hunger and Environmental Nutrition this year shows that small producers can be an attractive option, even for people on a limited budget. According to the study, prices were generally higher at small producers than at grocery stores, but there were exceptions.
Managing a company like Lufa Farms, with its approximately 600 employees and a covered market larger than that of Switzerland, is no easy task, but the current macroeconomic context could be favorable for it.
Finally, the synergy between the Montreal company and Walmart demonstrates that cohabitation between different business models is not only possible, but can also be fruitful.
reference: www.lapresse.ca