The fate of indoor agriculture business AeroFarms remains unclear, after a December of competing messages about its Pittsylvania County facility.
Aerofarms had announced in letters to the state and to Danville’s mayor that it would close its doors on Dec. 19, after its largest investor pulled out of the operation. But on that Friday before Christmas, the New Jersey-based company announced in a news release that it would remain open with new funding.
The news release was missing information included in a second letter to the state, which left open the possibility that the indoor farm will close by Jan. 16.
In that letter, first reported by the Danville Register & Bee, an AeroFarms executive wrote that 18 “primarily remote” employees, including seven Virginia residents, were “temporarily furloughed” on Dec. 19. The new funding to continue “core operations” was only for the short term, however, and if the company does in fact close, its remaining 135 employees — 102 of whom are Virginia residents — would lose those jobs permanently.
AeroFarms is “pursuing strategic options,” Carlos Nunez, the company’s vice president for human resources, wrote in a notice to the Virginia Department of Workforce Development and Management.
Nunez, AeroFarms’ CEO Molly Montgomery and a company spokeswoman did not respond to emails sent Friday seeking more information.
Pittsylvania County economic development director Matt Rowe said Friday that the company’s lack of clarity in communication has been among the disappointments to the team of county and Danville city officials who have worked with AeroFarms.
“Obviously, that causes confusion, and as I’ve told everybody, our number one focus is on our community, and the impacts to the community and the workforce,” Rowe said. “We want to try to do everything we can to reduce confusion. … I’m hopeful that they will have an investor or somebody else step in.”
AeroFarms opened its vertical aeroponic operation in 2022, growing leafy greens and microgreens under LED lights in the 145,000-square-foot building in Ringgold. It was a $42 million investment and at the time was the world’s largest indoor farming operation.
The company filed for Chapter 11 bankruptcy in June 2023, emerging that September under new ownership that closed other facilities and continued producing microgreens including kale, bok choy, broccoli and wasabi. It has sold its products at such retail businesses as Walmart, Harris Teeter and Whole Foods.
Montgomery, the CEO, said in an interview last year that the farm’s operations as of October 2024 were profitable before interest, taxes, depreciation and amortization, marking “a huge milestone” for the company. Focusing on the Danville-area operation and leaving behind research and development facilities, including one in Abu Dhabi, was key.
“There’s been a lot of scrutiny around vertical farming,” she said. “I feel that we’ve now proven that vertical farming can indeed be sustainable, but it also can be profitable and deliver product at scale. So we’re very proud of that with our Danville farm.”
Company officials told Danville and Pittsylvania County officials during a meeting in March that the facility was profitable, Rowe said. Danville City Manager Ken Larking told Cardinal News on Dec. 16 that there had been no indication that the company could be closing.
In Nunez’ first letter to the state, dated Dec. 11, he wrote that the company’s largest investor had an “unannounced restructuring and change in priorities.” The letter was written to comply with the federal Worker Adjustment and Retraining Notification Act, which requires employers to give advance notice of mass layoffs.
By federal law, the company should have given a 60-day notice, but because the investor withdrew the funding unexpectedly, AeroFarms said it couldn’t meet that requirement. Unable to find a new source of funding, the company notified employees on Dec. 11 that their work there would end eight days later.
The company’s Dec. 19 news release stated that an existing stakeholder had agreed to provide more funds, enabling AeroFarms to “continue operations and explore strategic alternatives.”
In the Dec. 19 letter to the state, Nunez wrote that Aerofarms, after receiving short-term funding, notified its remaining employees that a facility closure “would now occur between Jan. 2 and Jan. 16.”
Rowe said Friday that he did not know whether the facility was open that day. He added that while he is hopeful that AeroFarms can remain in operation, a different group, Atlanta-based MDH Partners, owns the building.
“That’s important to us, because … if AeroFarms is to leave that facility …we have the asset that we could easily market in conjunction with that investment group, and it’s a very highly marketable building,” he said. “I have no concerns about getting another food manufacturer back into that space.”
Meanwhile, the focus is on working with the employees, most of whom live within 15 minutes of the facility in Danville, Pittsylvania County and just over the state line in North Carolina, Rowe said.
“I’m appreciative of the company keeping the doors open” longer than it originally planned, he said. “Hopefully they’ll be able to keep the doors open for an extended period of time.”
The extension “got everybody through the holidays” while providing time for the state workforce and development team to aid the employees.
“If you’re trying to find a silver lining, I guess that would kind of be it at this point in time,” Rowe said. “It gave folks a little bit more time to get those necessary resources in place.”