The Direct-to-Consumer Model of Montreal’s Lufa Farms

One of Canada’s largest urban farming projects, Lufa Farms is the brainchild of Mohamed Hage and Lauren Rathmell. In 2011, Hage and Rathmell opened the world’s first commercial rooftop greenhouse, a 31,000-square-foot space atop an old Montreal warehouse. They now oversee three hydroponic greenhouses, each placed on a sturdy, low-rise building, with a combined 138,000 square feet.

Whereas many urban farms sell to restaurants or grocery stores, or via farmer’s markets, Lufa has a key point of differentiation: its direct-to-consumer business model. On its website, shoppers can customize baskets of fresh food, which are then delivered to more than 300 pick-up points across the city, or to their homes for an added fee. It’s like community-supported agriculture (CSA) or a farm share merged with the personalization and convenience of Uber Eats or Amazon Prime.

Lufa Farms pulls in other partners, including more conventional farmers. This helps it prevent seasonal defection. Currently, Lufa supplies about 25 percent of the food it sells, although that proportion goes up in the middle of winter. The company grows lettuce, bok choy, tomatoes, cucumbers, peppers, eggplants, zucchini, and many kinds of greens. Lufa also offers foods from other growers that consumers are surprised to see in the middle of a Montreal winter, like locally-grown strawberries.

The idea of growing strawberries in Montreal in January may seem, to put it in produce terms, bananas. But Aaron Fox, an assistant professor of urban and community agriculture at California State Polytechnic University, Pomona, in California, said it makes good business sense to focus on these kinds of coveted items: “If you can grow a strawberry in January, you can charge whatever you want.” Urban farmers, he noted, often end up growing boutique crops because they offer a better financial return than cheaper staples like corn and potatoes, which are not cost-effective with a small yield.

Lufa Farms is shaping up to be a success. It now delivers more than 10,000 baskets of food every week in the Greater Montreal, Trois-Rivieres, and Quebec City corridor, feeding about 2 percent of the population in that area. Launched with some $1.6 million from the founders, it has since received $2.8 million in venture capital, and broke even in 2016.

Source: Is Personalized, Next-Day Delivery the Future of Urban Farming?