Infarm announced yesterday a significant strategy shift and accelerating its drive towards profitability by decreasing its cash-burn rate and focusing on Growing Centres where there is a clear path to profitability in 2023.
The announcement was made by the three co-founders (Erez Galonska, Osnat Michaeli, and Guy Galonska) depicting the challenging market conditions, linked to escalating energy prices and tough financial markets, the company was in.
“In our current setup, we recognize that Infarm cannot withstand the challenging market conditions, particularly with regard to escalating energy prices and tough financial markets. We have to adapt our ambitious growth targets and increase our efficiencies to make our business profitable, and continue the pursuit of our long-term mission.” They stated.
The announcement stated that around 500 employees (half of its workforce) would leave the company as a result even if the exact numbers are yet to be determined. This follows another workforce reduction announced in recent weeks as reported by Sifted.eu.
Reasons For The Changes
They stated that the main reasons for the changes were:
- Energy prices have escalated (doubled in Europe)
- Inflation rates and supply chain disruptions
“As you know, infarm have already been adjusting our operations this year, including consolidating production sites, inStore farm clusters, and reducing our workforce. However, these measures assumed a quick market recovery, and we must admit that our assessment was too optimistic. We take full responsibility for that. Based on the data we have today, we are forecasting slower growth caused by a significant downturn. We grew our teams to support a global growth strategy, but today, it is clear that a consolidation and focused growth mindset is required to overcome the challenges.”
The company now plans to focus on consolidating their capacity in their growing centers in Frankfurt, Copenhagen, and Toronto where the company has strong retailer relationships and secured contracts of significant volume ensuring a path to profitability in 2023. Operations in the UK, France and the Netherlands are set to be downsized as they are not considered as core market by Infarm.
In conclusion, the company reassured that they remained committed to their sustainability, climate and food security goals:
- “Infarm will continue to pursue our road to net zero, in line with our SBTi emission targets that we recently submitted.
- We have just received our B-Corp certification and will continue to uphold our high standards with regard to transparency, responsibility and sustainability.
- We have successfully demonstrated the ability to grow wheat indoors towards our goal to address the food security challenge.”
Image provided by Infarm.
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