Cibus Capital, a private equity manager focused on the food and agriculture sector, carved out 230 hectares from international producer Hall Hunter Partnership to create The Summer Berry Company in 2019. The business spans farmland in the UK and Portugal, and last year produced approximately 13,000 tonnes of strawberries, raspberries, blueberries and blackberries, which found their way onto the shelves of prominent UK retailers including Sainsbury’s, Tesco, and TDR Capital-owned Asda, as well as huge European brands such as Mercadona and Intermarché.
At the time of the acquisition, Cibus COO Jeremy Alun-Jones was keen to praise The Summer Berry Company’s “sustainable approach and investment in new technologies”. It is a legacy the firm has been keen to maintain, having implemented a range of new measures designed to make the company more sustainable as well as boost value since taking ownership.
Cibus invited New Private Markets down to the West Sussex site to see these changes for ourselves.
‘We like it wild’
Cibus made the investment from its debut fund, which closed on $322 million in 2019. When investing in a company, the firm develops an environmental and social action plan, which is “a list of identifiable and measurable actions that mitigate ESG risk and define the parameters within which we aim to measure progress”, according to the Cibus’s sustainability report.
For The Summer Berry Company, a key element of that plan was reducing the use of pesticides. The impetus to do so was powered as much by regulatory pressure as a desire to improve ESG credentials. Alun-Jones tells NPM of a board meeting during which UK production director Bartosz Pinkosz explained how red tape had limited the tools at his disposal: “Bartosz said: ‘I used to have a chemical war chest of 12 chemicals and 11 of them are now banned’.”
To transition away from pesticides, Cibus and The Summer Berry Company have relied on the expertise of agronomist Silvina Morais, who joined the organisation in 2018 and was promoted to ESG manager last year. Under Morais’s direction, The Summer Berry Company has abandoned the traditional approach to managing crops, which involved using chemicals to eradicate insects irrespective of whether they were having a negative impact, to an approach that puts ecosystems front and centre. Through a combination of planting complimentary species of plants and introducing the right kind of insects, Morais is developing a system whereby harmful insects (namely aphids) are kept in check organically.
Alun-Jones says: “What she explained to me was you’ve got to change your mindset about this. And she said: ‘Look, come into the polytunnels’. And she’d shake the plants and she’d say: look there are some aphids here, but look at all of these beneficial lacewings, predatory wasps, and things like that. So, she said the philosophical change is getting a balance so that your aphids don’t take control.
“She asked us to put aside one of our other philosophies, which is if you supply Marks & Spencer, Tesco, and Sainsbury’s, they like your farms to be very neat and tidy. Our farm is now a complete mess and it’s a complete mess because all around the tunnels Silvina has planted species of bushes and shrubs in which the good bugs enjoy living.”
The visit to the farm proves the point. During our walk around the polytunnels, Morais is keen to point out the bushes and trees that have been planted, and their importance to the overall health and quality of the produce. She speaks of the difficulties experienced when trying to source seeds that are indigenous to the local region, leading her to swap seeds with others in the local area. The result is a farm that, at first glance, appears strikingly unkempt, something Morais is happy to embrace. “It’s wild, but we like it wild”, as she puts it.
The reduction of artificial chemicals is a key tenet of regenerative farming, an approach to agriculture that promotes sustainability by taking into consideration factors such as soil health, biodiversity and water resources.
Cibus is not the only investor integrating regenerative practices into its portfolio companies. For example, Manulife Investment Management, which manages approximately 400,000 acres of farmland in the US, Canada, Chile and Australia, is trialling “organic production” methods that do not use any synthetic fertilizers or pesticides in parts of its Californian almond orchards.
In Cibus’s case, there is still a long way to go (in total the farm has 32km of edge that are ripe for tree planting) but the benefits of the effort to the business are clear. The use of pesticides has fallen by 80 percent in the last few years. Reducing chemical usage has both environmental and financial benefits, though the cost savings may take a while to be felt, given the expense of developing the necessary ecosystems.
“Initially, we spent as much on buying in beneficial insects as we were saving on not using chemicals”, says Alun-Jones. “A ladybird costs 50 pence. They’re expensive things!”
In addition to biodiversity, The Summer Berry Company’s website states it has a “core aim” to become carbon neutral by 2030. Many of the numbers in the company’s KPI checklist, shown to NPM, are moving unequivocally in the right direction. Total energy usage for 2022 was 5.9 million kWh, down from 7.2 million the year before. Efficiency has also improved: energy used per kilo of fruit produced has fallen from 878kWh in 2019 to 542.2kWh in 2022.
The source of the energy used is as important to Cibus as raw consumption numbers. The firm works to persuade its portfolio companies to “actively discriminate” in favour of electricity providers that produce energy from renewable sources. As a result, 86 percent of The Summer Berry Company’s electricity came from renewable sources in 2022. When Cibus took ownership, the figure was 35 percent.
Alongside energy consumption, it is trying to reduce reliance on mains water. “Water usage is incredibly important to us”, says Alun-Jones. “The amount of water is important in itself. But the other thing that’s important to us is the degree to which our companies contaminate the water that they use.”
To address water usage, a large reservoir now sits alongside the glass houses, part of a £500,000 ($611,000; €579,000) investment in water usage in recent years. The reservoir is used to collect rainwater, which can then be used on site.
During our tour, Pinkosz described how 90 percent of the water used for irrigation in the glasshouses over the last 12 months came from the reservoir. The figure could have been 100 percent, had it not been for a period of no rainfall. Overall, the use of rainwater as a percentage of water use across the whole business has grown from 6 percent to 16 percent in the last year.
Efficiency improvement efforts also extend to the crops themselves. During our tour, a section of the glasshouse is being used to experiment with berries that have a different genetic make-up to the current yield. The farm hired a genetics director last year – an unusual move for a grower – in the hope that, by bringing genetic expertise in-house, they can develop berries that deliver the while being more resource-efficient.
The pièce de résistance of Cibus’ changes since acquiring the company is perhaps the addition of robotic fruit-picking machines. The Summer Berry Company initially trialled a deployment of four machines, but has since drafted in a fleet of more than 50. A team from Tortuga Agtech, which developed the robots, is now a fixture on the West Sussex site, conducting maintenance on their product and ensuring everything runs smoothly.
The machines themselves resemble something from 20th-century science fiction. Mounted on rubber tracks, they creep along of their own accord, while several pincers whirl around, snipping off ripe berries and depositing them in a collection of punnets held in the base.
At present, the Tortuga robots make for particularly cautious pickers. When watching them in person, the number of ripe berries that cannot be picked due to being obstructed by leaves and shrubbery is obvious, an obstacle that could easily be navigated by human pickers. The result is that the machines can pick around 10 kilos of fruit and hour. A human can manage anywhere between 15 and 50 kilos.
Tortuga has developed the technology by using machine learning, meaning that they are constantly gathering data to help improve efficiency. Nevertheless, a farm solely populated by machines remains the stuff of science fiction, for the moment, anyway.
In the short term, Cibus sees two benefits to incorporating the machines into its picking process.
“Sometimes when we are in the peak, we are forced to pick 24 hours a day,” David Sanclement, who was brought in as CEO of the portfolio company by Cibus in 2020, explains, which clearly places a heavy burden on the picking workforce. The machines can help here by taking the night shift, reducing this burden on workers.
Secondly, machines can help provide a “buffer” during short periods of heightened activity. The farm prefers not to draft in seasonal workers for such periods, instead only looking to recruit if they can provide employment over the longer term.
The use of machines alongside human pickers is one element of a wider focus on employee welfare. Seasonal workers live onsite during the picking season, and the farm says it goes to extra lengths to provide a welcoming environment. During our walk around the living area, it is difficult not to think about British holiday parks. There are rows of static caravans, which house up to six people, as well as a football pitch, a volleyball court and various other amenities designed to make the environment feel like a home. The farm organises day trips, facilities access to shops, and arranges for a nurse to come in one day a week.
One of the reasons for going to such lengths is to encourage pickers to return year-on-year. During peak periods, the company employs around 2,000 employees, during the quietest periods it is about 350 people across both the UK and Portugal sites.
People and culture director Helen Wilson describes how, post Brexit, it is more difficult to recruit people from Europe. The firm has made efforts to recruit more from the local area, but with inauspicious results – a recent recruitment campaign targeting local people yielded only eight successful candidates, demonstrating the continued importance of overseas workers.
The farm also provides a route for seasonal workers to become full time. Pinkosz, who Sanclement jokingly describes as the “mayor” of the farm, is one of several full-time staff to have originally come to the UK as a seasonal worker.
Work to do
Alongside the success stories, there have been challenges for Cibus and The Summer Berry Company. The increase in the price of natural gas, one of primary ways glasshouses are heated, following Russia’s invasion of Ukraine, hit the UK glasshouse farming industry hard. This forced the company to halt production in some of its facilities for a period of time, leading to some redundancies.
There are also still areas where Cibus and its portfolio company could still make ESG improvements. For example, alongside the glasshouses sit huge tanks of liquid CO2, which is used to stimulate photosynthesis. Efforts are being made to see if the farm can produce its own, but the CO2 used is currently sourced from third parties. Morais explains that, if they were to find a sustainable solution, it would lead to a significant reduction in the farm’s carbon footprint.
The company is also one of a few GPs to experiment with biochar, a process by which a charcoal-like material is made by burning agriculture waste, to safely store the carbon in its waste materials. Cibus’s first initial trial was unsuccessful, but a second is now underway.
Packaging is another sticking point. Currently, the punnets themselves are made from plastics, and little movement has been made towards replacing them with a more environmentally friendly alternative.
In Alun-Jones’ view, packaging requirements are determined by retailers, who are ultimately led by their consumers, and there is little that Summer Berry Company can do to move the needle. “At the moment it’s a little bit of a shame. But the UK customer doesn’t yet care enough about the amount of plastic in packaging because they’re not requiring the retailers to do something about it,” he says.
That is not to say that Cibus itself is deaf to the need for sustainable plastic alternatives. The firm counts Aquapak Polymers in its venture portfolio, which is a company producing materials that can be used to create biodegradable packaging.
To some extent, it is difficult for Cibus to quantify the effect all these efforts have had on the value of The Summer Berry Company, given that the firm is yet to seek an exit. However, Sanclement is confident that the changes will prove attractive to any future buyer. The farm’s focus on sustainability has helped it develop relationships directly with retailers for which ESG is also a priority, rather than having to go through a middleman-style aggregator. “I strongly believe an investor at the exit of Cibus might be willing to pay a higher multiple of the company when you are not selling to an aggregator, but you’re selling to a retailer,” he explains.
Alun Jones is even more explicit about the relationship between ESG and company valuations. He concludes: “I think now you just won’t be financeable if you’re not focused on GHG emissions and the path to net zero. It won’t quite be binary, but I think companies that aren’t will trade at big discounts.”