AppHarvest Inc. went public last year, raising nearly $500 million in capital in the process.
Now, the agtech company is looking to double its 550-person workforce in 2022 as it plans to open high-tech indoor farms in Berea, Somerset and Richmond, Kentucky in addition to its 60-acre flagship farm in Morehead, Kentucky.
But it hasn't been easy. It took years — and several failures along the way — to become an "overnight success," said Jonathan Webb, AppHarvest's founder and CEO. He hosted a breakout session on the advantages of mission-driven leadership at the Leadership Louisville Center's Best of Leadership Summit on Thursday.
Webb began the discussion spotlighting global issues, such as the crisis in Ukraine, the coronavirus pandemic, wildfires across the U.S. and supply chain issues, and urged leaders to take action within their own organizations.
"If this doesn't wake us up as a society that we're all interconnected and these things impact us every day... I don't really know what will wake us up," he said. "Each and every one of us, as leaders, know that we really do have an obligation with that responsibility to figure out what can we do. I think thinking out of the box and being creative on how do you use the power you have whatever organization you're at to make what might seem like small changes that could end up being more systematic.
"Not every idea is going to work and not every shot is going to go in, but we really need to raise the bar at our organizations wherever we're at. What are we shooting for? What are we targeting? How can we be more helpful in our communities?"
According to AppHarvest's earnings report released Feb. 24, the company had net sales of $9.1 million and net loss of of $166.2 million in 2021. For the fourth quarter of 2021, net sales were $3.1 million on 4.4 million pounds of tomatoes sold with a net sales price of 69 cents per pound, almost double the price achieved in the third quarter. AppHarvest's stock is currently trading around $4.15 per share, as of 2:30 p.m. Friday, up roughly 10% from when the market opened.
Here are a few more takeaways from Webb's session:
An entrepreneur's mentality
AppHarvest (Nasdaq: APPH) has had very little turnover amid the Great Resignation, Webb said. He said the company's mission at the core of what they do is the reason for that — and it certainly helps that the company pays a living wage, offers health care and other benefits and gives employees ownership in the company.
Webb said he wants all of AppHarvest's employees to have an entrepreneur's mentality.
"Lead by example. You could have Slack, email, all these tools — they're all great — but the most important thing is what's your mindset? What are you portraying to people inside your organization? That's contagious because now they start thinking like you, then you've got just a bunch of Super Marios and you're all together and everybody's feeding off each other," he said.
Short-term wins versus long-term vision
Webb argued that entrepreneurs don't have the luxury of working head down anymore, only focusing on the current week's profits or problems. Today, they have to balance showing stakeholders gains in the short-term, while also thinking about what could impact the business 10 or 20 years down the line.
"If your organization is already thinking longterm, that's where you're going to find the gaps," he said. "That challenge for an entrepreneur becomes the opportunity. So the bigger the challenge — don't be startled by it — that's the big opportunity. Then build a business around that... 'This might be coming. It's going to affect our business. How do I get ahead of it? And how do I lean into it and adapt?'"
Purpose drives profits
Sustainability shouldn't be a box that a business has to check, Webb said. It should be something that lowers costs, retains employees and attracts customers.
And it's something that every company should be concerned with as a swelling population and climate change has the potential to adversely impact global economies.
AppHarvest, a certified B Corp founded in 2017, is developing and operating some of the world’s largest high-tech indoor farms designed to grow non-GMO, chemical pesticide-free produce, using up to 90% less water than open-field agriculture and only rainwater while producing yields up to 30 times that of traditional agriculture on the same amount of land without agricultural runoff.
"I am very bullish on American innovation. I'm very bullish on technology," he said. "If we get the government to get out of your way, if we get universities to help better prepare people to help you and we get organizations thinking, 'Dammit, I don't know what I can do, but I'm going to be a part of the solution,' — great. We can change quickly."
The Leadership Louisville Center's Best of Leadership Summit, held at the Kentucky Center for the Performing Arts also featured Darryl "DMC" McDaniels, founding member of legendary hip-hop group Run-DMC, Dr. Joe Folkman, co-founder and president of Zenger Folkman, and Scott Blanchard, author, organizational consultant and president of The Ken Blanchard Companies, as keynote speakers.
The event, which had roughly 400 in-person and 200 virtual guests, was sponsored by PNC, Humana, ARGI, T. Bain & Co., EY, Farm Credit Mid-America, Beam Suntory, Extell Development, The Lane Report, Louisville Business First, Louisville Public Media, Portland Investment Initiative, Ventas, Archdiocese of Louisville, DDW, GE Appliances, a Haier company, Hardscuffle Inc., HJI Supply Chain Solutions, MCM CPAs & Advisors, MPI Printing, Samtec, Texas Roadhouse, University of Louisville College of Business, Volunteers of America, Wave and Yum Brands.
