Farming indoors is not easy nor is it cheap. After raising a lot of investment capital on claims that vertical farms could solve sustainability issues in conventional agriculture, skepticism began to bubble up when early adopters fell short of promises. In April, Upward Farms abruptly shut down after raising over $140 million. New Jersey-based Aerofarms filed for Chapter 11 protections then emerged from bankruptcy months later. Yet, for one company, scaling its vertical farming operation and changing the agricultural system started with selling the “perfect” strawberry. Oishii, a New Jersey-based vertical farming operation, has closed today a $134 million to scale and build a new facility to supply customers in the Northeast. To date, the six-year-old ultra-premium fruit company has raised $189 million and has launched three products: the Rubī Tomato and two varieties of strawberries, the Koyo Berry and the Omakase Berry. The round was led by Japanese telecommunications company NTT and brought in a number of new food tech industry investors with expertise in vertically farming operations including Bloom8, McWin Capital Partners, Mitsubishi Shokuhin and industrial robotics company Yaskawa Electric Corporation, among others. Compared to other vertical and indoor farming operations, Oishii is doing something different with its branded produce strategy, focusing innovation on fruits pollinated with bees rather than leafy greens. Though the latter are much easier to grow, “it’s really hard to differentiate and the unit economics are really tough because there’s so much competition,” said founder and CEO Hiroki Koga. There are a few other success stories for companies selling salad greens and herbs from indoor operations. New York’s Gotham Greens has been on a tear, raising $310 million in 2022 and expanding its partnership with Kroger last year. Brightfarms (which was acquired by Cox Industries in 2021) has expanded its operations last year and Virginia-based Plenty Unlimited, Inc. is investing $300 million to build what it claims will be the world’s largest indoor vertical farming facility. When Oishii first launched its Omakase Berry in 2018, a clamshell of around 10 to 12 strawberries cost about $50. The company has been able to bring that price down to about $10 and the premiumization in flavor that has helped grow the brand. Though scarcity does help the virality of the brand, Koga said. “Our goal isn't to become a Ferrari. Our goal is to be Toyota.” With the new capital infusion, Oishii expects to release a new berry variety and a melon as well as build a significantly bigger facility that is 10 to 20 times bigger in scale so it can bring more of its premium berries to consumers in the Northeast. Currently, Oishii is selling in over 100 specialty and natural stores (about half are Whole Foods Market locations) in the New York area as well as in Washington D.C., Massachusetts and Connecticut. The brand has gotten a lot of inquiries from conventional grocery chains and sees that retail channel as a key to healthy expansion. “Our goal is to keep on making this more affordable and more accessible to a wider population,” Koga said. | 
