New tech plus old business model turn rare veggies into hot biz startup
Trusted Freshness, a new Edmonton greenhouse vegetable producer, is charging ahead because of a major shortage at grocery stores in rare vegetables, the increasing mastery of greenhouse tech, and a new spin on the old business franchising model.
“We can grow massive amounts of produce and we can grow pretty much anything, from weed to wheat,” says Trusted Freshness director Doug Kirillo. “What we want to grow is crops that are heavily sought after but no inventories.”
Trusted Freshness is led by experienced local entrepreneurs with backgrounds in everything from oilpatch engineering to hot tub manufacturing and sales, from computer software to plant biology.
Kirillo, 59, met Trusted Freshness chief executive officer Jim Schroeder, 69, after Schroeder had retired as a mining and oilfield engineer and deal maker. Schroeder was manager of a hot tub manufacturing firm when Kirillo, a serial entrepreneur, was hired to consult.
“I’ve made a million and I’ve lost a million,” Kirillo says of his life in business. “I’ve made a million more and I’ve lost a million more. It’s just the nature of the business. At some point, and I’m there now, you’ve got enough stick-to-itiveness and you’ve got enough contacts in the area that you work that you can be sustainable. You know most people opt out or go left within the first three to five years. Those are the tough years.”
Why is stick-to-itiveness so crucial?
“You get up in the morning and you go, ‘I’m down to my last nickel. What do I do now? It’s better to just throw in the towel and go get a job.’ But you’ve got to get back on that horse and go out there and do it and get it done.”
From 2008 to 2010, Schroeder worked on how to create plant nutrients out of fish waste with his aquaponics farm factory at Miquelon Lake.
Schroeder and his plant science team next moved on from that to come up with their own greenhouse lighting system and nutrient formula for growing plants, which are both now being used at the Trusted Freshness greenhouse in Leduc. The plants grow in water, their roots in the nutrient solution.
In late 2015, Schroeder came to Kirillo to help come up with a marketing plan. The initial idea was to simply sell the greenhouse tech to other companies, but they then hit upon the idea of selling franchise operations for $600,000 each with all of the franchises located inside the same central location. Each franchisee would be contracted to grow crops under the Trusted Freshness brand.
Fourteen franchises — all owned by passive investors but managed by Trusted Freshness — now operate out of the company’s 38,000 square foot greenhouse in Leduc. “It’s called O.P.M. — using other people’s money to grow,” Kirillo said. “It’s the franchise model.”
One master franchise in the factory is charged with germinating the seed over seven days, then the grower franchises grow the crop over the next four weeks.
When produce comes up from the U.S., transit often takes about 10 days, shortening the “best before” time to sell and consume the product. But Trusted Freshness has the advantage of picking, packaging and shipping to local stores within a day or two, Kirillo said.
“Every 28 days we can harvest massive amounts of produce and get it to you. It’s fresh, it’s local, it’s nutrient dense and you can get it on a consistent basis.”
From Edmonton grocers, they found there was a huge need for the more rare and exotic herbs and vegetables, such as basil, arugula, baby and micro greens and kale. Such products don’t always get to Canada because they sell out in the United States, Kirillo said.
Food safety is paramount, Kirillo said, since his company is only able to sell herbs and produce to major grocers because the greenhouse is regulated under onerous, costly but essential CanadaGAP certification.
Six months ago, Trusted Freshness herb and vegetable sales started in grocers such as Sobeys, Safeway and Italian Centre Shops.
There are already plans for six more Trusted Freshness central greenhouse operations in Calgary, Ottawa and Toronto next year, with dozens more franchisees working out of each one.
Kirillo, the lifelong entrepreneur, is characteristically bullish about this high-tech greenhouse venture.
“This thing is going to bust wide open,” he says of the business. “That’s why for us right now, it’s not a matter of if. Somebody is going to come in and do this, but we’re the only guys in Canada that have got the vision of commercialization across the country to supply guaranteed volumes.”