Lufa Farms: Where ESG factors are at the core of the business model

Lufa Farms is taking numerous measures to limit the environmental impact of the vegetables that come out of their greenhouses, whether it's recirculating water during cultivation, having a short distribution channel or using a fleet of electric trucks. But beyond these individual choices, sustainable practices are baked in to the Montreal-based company's very business model. 

As a growing number of companies are integrating environmental, social and governance (ESG) factors into their operations, Lufa Farms is ahead of the game. That's because these principles have always been the cornerstone of Lufa's urban agriculture model, even when Mohamed Hage co-founded the SMB over a decade ago. The inexperience of the young entrepreneurs behind Lufa allowed them, from the beginning, to do things differently.

"We'd never grown or sold tomatoes before, so we were able to start from square one. Since we didn't know how things worked, we could imagine a completely different model, a completely new way of doing things." 

– Mohamed Hage, CEO and co-founder, Lufa Farms

The startup's mission: building a more sustainable food system by feeding cities with what they grow. In other words, bringing people closer to where their food comes from. In 2011, Lufa Farms built the world's first commercial rooftop hydroponic greenhouse in Montreal's Ahuntsic-Cartierville borough. Since then, they've found success, and now operate 3 more technologically advanced greenhouses, as well as an indoor farm. 

Through the urban food ecosystem they've created, Lufa delivers about 30,000 food baskets every week. Far from sitting on that success, the team is always looking to reduce its environmental footprint. "Plastic packing is still a major challenge," Hage explains. 

But the SMB's scope allows them to invest in innovation, just like they did by developing their own environmentally-friendly ice packs. "Without the volume we're seeing today, we wouldn't have been able to invest in a project like this to make our baskets more sustainable," says Hage.  

Beyond environmental considerations, Lufa Farms is committed to giving back to the community. That's why they created a direct donation program to deliver fresh food baskets to nearly 1,000 people every week. "What makes us proud is that contributions are traceable and go 100% to people who need them, with no management fees," adds Hage.

Today, Lufa Farms estimates it serves approximately 2% of households in Montreal. However, Hage and his team are always looking to raise the bar higher. "Imagine if we could feed 10% of the population. Imagine the impact! That's our goal." 

But to get there, there's no compromise on the fundamental principles that guide the company's founders. For example, products should be pesticide-free and cut or prepared the same day as delivery, when possible. "It'll take a few decades to get there," says Hage, "but that's the advantage of being a multigenerational company."

"I would aim higher from the start. I think we'd build a larger greenhouse and start developing more infrastructure from the outset. If we'd thought 'big' then, we wouldn't have had to keep expanding bit by bit."

– Mohamed Hage, CEO and co-founder, Lufa Farms