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European Pension Managers Go Big For Indoor Ag as Equilibrium Closes $1.1bn CEA Fund

Equilibrium Capital, a US-based private sustainable finance and ESG funds manager, has closed its second indoor ag fund on just over $1 billion – well beyond its $500 million target.

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By Louisa Burwood-Taylor

July 8, 2021

Equilibrium Capital, a US-based private sustainable finance and ESG funds manager, has closed its second indoor ag fund on just over $1 billion – well beyond its $500 million target.

Controlled Environment Foods Fund II (CEFF II) raised $1.02 billion from a group of institutional investors, mostly pension funds, with a strong showing from Europe, according to Equilibrium CEO Dave Chen. Sweden’s AP4 was one of five anchor investors that took over half of the total fund alongside two large UK pension managers, he added.

CEFF II will invest in high-tech greenhouses, indoor, vertical farms, and other sectors that need controlled environment agriculture (CEA) facilities such as alternative proteins and aquaculture.

“The strong investor demand reflects a drive to real assets” and sustainability by large institutional investors, combined with an “interest in agriculture and food systems,” Chen told AFN.

“There is a sense that ag is going through several simultaneous disruptions and that creates an opportunity.”

A press release announcing the fund closing states that investors and retailers “are increasingly looking for more sustainable, and less volatile, ways to invest in and scale agriculture.

“CEA shifts agriculture from a land-centered industry where the land, geography, and weather determines what can grow, into a climate-resilient industry that can now focus on the consumer’s demand for the fresh, safe, and regional fruits and vegetables they want to eat,” it continues.

For Portland, Oregon-based Equilibrium — which has funds across environmental and sustainability verticals including ‘green’ real estate, water, wastewater, and outdoor agricultural production — CEA is a compelling investment opportunity for its ability to dramatically increase the productivity of food production “per unit of resource input [and] land use,” said Chen.

“The ability to ride a tech innovation curve, locate farms regionally for quality and resilience, adapt to climate change, and capture demand from retailers and food service” also make it attractive, he added.

Asked where he expects the market share for CEA-produced food to be in five years, he estimated upwards of 30-50%. “Tomatoes are already there,” he said.

Equilibrium is predominantly a real assets investor, owning or investing in indoor farming facilities and greenhouses, but it also buys equity stakes in operating companies. CEFF II will invest between $10 million and $125 million per deal, primarily across North America. It has made three investments to date — two in the US and one in Mexico — mostly in mature high-wire crops like tomatoes, peppers, and cucumbers, as well as the emerging categories of leafy greens and berries.

Equilibrium’s $336 million Fund I portfolio includes indoor ag companies such as AppHarvest — which went public earlier this year via a SPAC merger — Revol Greens, and Little Leaf Farms.

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"For Fruit To Be On The Water For 51 Days And Still Be Sold As A Premium Product Is Unheard Of"

United Exports recently announced that a container of fresh OZblu® blueberries transited the Pacific ocean – from the port of Manzanillo in Mexico to the port of Hong Kong – spending 51 days at sea and arriving fresh and ready for sale in Hong Kong, on 20 May 2021.

Roger Horak - OZblu®

United Exports recently announced that a container of fresh OZblu® blueberries transited the Pacific ocean – from the port of Manzanillo in Mexico to the port of Hong Kong – spending 51 days at sea and arriving fresh and ready for sale in Hong Kong, on 20 May 2021. This was one of several containers sent to Asia from OZblu-Sun Farms’ first harvest in Mexico.

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2013 saw the first commercial harvest of OZblu blueberries, the main production area back then was in South Africa with limited production in Australia. These days the blueberries are grown in Peru, Mexico, Chile, US, South Africa, Zambia, Zimbabwe, Morocco, Australia, Portugal and Spain.

The biggest production area is in South Africa followed by Peru then Mexico.

“We have used various productions models comprising both contracted growers and our own production with the expansion very much focused on our own production,” explains Roger Horak, Co-founder of OZblu.

“OZblu varieties are unusual in that they are very adaptable and produce the same fruit in different locations around the world, same yield, crunchiness and taste. South America, especially Mexico fits in well to supply the US and compliments our production there. Peru and Chile have access to China, which South Africa does not have, so it is a case of lining up production with markets to supply the markets 365 days a year. It also spreads risk, for example frost in northern South Africa last year caused a delay of 6-8 weeks in production which needed to be supplied from our other production sites.”

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The blueberry category has seen a massive growth in recent years but now according to Roger, it is individual varieties, all markets are differentiating by variety.

“Initially a blueberry was just a blueberry but now there is a huge demand for varietals that deliver flavour and crunch, anyone that thinks growing old open varieties is still an option is dreaming. China is a premium and very discerning market, the EU, UK and US are now all the same. We have not even scratched the surface of what is achievable with proprietary varieties.”

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“When we started on this journey, we had our varieties independently tested by Experico which showed that they all could handle 40 days sea freight in normal refrigerated containers, now 96.5% of OZBLU production from South African goes by sea in standard refrigerated containers, versus the rest of the industry only achieving around 60% for sea freight exports. We normally only use refrigerated containers, occasionally CA but nothing else, no modified atmosphere bags or other technology. For fruit to be on the water for 51 days and still be sold as a premium product is unheard of. In this Covid world the importance of being able to ship by sea is essential, as air freight space and rates are very challenging.”

Roger said they are planning a massive ramping up of acreage in the coming years, and intend to double production every two years.

“It is demand driven, the increase will be in the production areas which are stable and attractive for investors and where breeders IP is respected and protected.”

For more information:
Chole Middleton
United Exports
Tel: +27 21 879 2306
chloe@unitedexports.com.au 
www.united-exports.com 

Publication date: Wed 9 Jun 2021
Author: Nichola McGregor
© 
FreshPlaza.com

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Certhon Wraps Up 7th Raspberry Trial Successfully

After successfully growing strawberries in the Certhon Innovation Centre (CIC), the company has decided to take on another trial of growing fruits indoors.

“Raspberry isn’t the first crop that comes to mind when figuring out which crops to grow indoors,” Andrea Huegler, R&D Engineer and Agronomist at Certhon said. “However, we accepted the challenge and decided to go for it as there are a lot of benefits to growing it in a controlled environment.”

After successfully growing strawberries in the Certhon Innovation Centre (CIC), the company has decided to take on another trial of growing fruits indoors. Certhon has been doing lots of research on indoor farming for a long time now. This has allowed them to investigate how to grow more complex crops in a controlled environment without daylight.

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Andrea Huegler 

Trial results
The main advantage of growing this crop indoors is having higher yields and consistent quality year-round. Certhon sees great opportunities ahead for the crop, due to its premium status and short shelf life. “It makes it a perfect candidate to be grown indoors.” During this trial, common raspberry cultivars were chosen. Certhon used chilled raspberry canes from a propagator, pollination by bumblebees and top and interlighting was used to flourish the crops. The harvesting period comprises 10 weeks, out of a total cultivation cycle of 21 weeks and is expected to end in July 2021.

Cultivation risks
The research was mainly about investigating the right transition of the vegetative state of the crop to the generative state. Andrea says that balancing the climate and light with energy consumption is the trickiest part here. “Ever since the first raspberry trial we’ve been trying to balance out the reduction of energy use, having an X amount of yield at a great quality and extending the harvesting period. Throughout the trials, we have obtained nearly twice as much yield compared to the traditional Dutch polytunnel producers in the summer,” Andrea notes.

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However, raspberry cultivation isn’t without challenges. “One of the risks that could come up is growing grey mold,” explains Andrea. “If nectar isn’t removed well from the flower, the fruit can grow mold or have a grey undertone. However, if you manage your humidity wisely, the incidence is severely reduced. That’s the idea behind the CIC, optimizing growing recipes and eventually expanding the product portfolio because we want to provide a wide selection of product options to our clients.”

Greenhouse application 
The knowledge that is generated in the CIC can also be applied to the cultivation of raspberries in greenhouses. Growing these crops indoors allows Certhon to generate ideal growing conditions and maximum potential for raspberry cultivation. With this knowledge, Certhon generates a blueprint that growers can follow in greenhouse cultivation as well.

Andrea explains, “For instance, the blueprint can be followed when growers want to know when to: provide extra lighting, shading, or adjust the humidity. In this way, ideal growing conditions can be mimicked to achieve the highest quality and yield possible in a greenhouse.”

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Cane risk
Another, very important aspect is the quality of the raspberry canes. In order to have good production, your raspberry canes need to be of good quality and pest-free. “This cannot always be guaranteed, '' says Andrea, “since they are propagated outdoors and therefore bound to the pressures of external influences, such as climate. Although we have not tried it ourselves yet, we think the next step is to also propagate raspberry canes in a controlled environment without daylight.” 

For more information:
Andrea Huegler, R&D Engineer and Agronomist 
Certhon
andrea.huegler@certhon.com 
ABC Westland 555
P.O. Box 90
2685 ZH Poeldijk
The Netherlands
Tel: +31 174 22 50 80
www.certhon.com 

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Publication date: Mon 7 Jun 2021
Author: Rebekka Boekhout
© 
HortiDaily.com

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Inside Larry Ellison's Futuristic Indoor Farming Company, Whose Massive, Tesla Solar-Powered Hawaii Greenhouses Are The First Step Toward An Ambitious Goal of Feeding The World

Sensei Ag is an agriculture-tech firm bent on changing the way food is grown worldwide. The company's mission is to feed the world by making produce more nutrient-rich and accessible and lowering the barrier to entry for vertical or greenhouse farming

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Avery Hartmans

06-15-21

An employee at Sensei's farm in Lanai, Hawaii. Sensei Ag

  • Oracle billionaire Larry Ellison created an indoor farming company called Sensei Ag in 2018.

  • The goal of Sensei Ag is to feed the world by making produce more nutrient-rich and accessible.

  • Sensei Ag's Tesla solar-powered greenhouses grow produce that's distributed throughout Hawaii.

  • See more stories on Insider's business page.

Picture this: You're driving along the highway on the island of Lanai, Hawaii's smallest inhabited island. All of a sudden, the verdant landscape gives way to futuristic greenhouses powered by an array of solar panels. 

This is the first outpost of Larry Ellison's 3-year-old indoor farming company, Sensei Ag

Sensei Ag is an agriculture-tech firm bent on changing the way food is grown worldwide. The company's mission is to feed the world by making produce more nutrient-rich and accessible and lowering the barrier to entry for vertical or greenhouse farming.

And while the company is young, it has the backing of Ellison, the tech titan whose net worth hovers around $95 billion and whose aggressive bet on the future of database management turned Oracle into a $200 billion behemoth.

Read more: Leaked documents show just how much Oracle's cloud unit is modeling itself after Amazon by telling employees 'don't be a jerk' and 'put customers first'

Ellison's latest venture seems to have an equally ambitious outlook on the future.

"In the next three-to-five years, our goal is to feed the top three quintiles of the world with our products and employ the bottom two," Sensei Ag CEO Sonia Lo told Insider. "And then in the next eight-to-10 years, it is to feed everybody."

Here's how Sensei Ag is working to making indoor farming mainstream and use its Hawaiian homebase as a "lab for the world."

Sensei Ag is the brainchild of Ellison and Dr. David Agus, a cancer physician, and professor at the University of Southern California.

Larry Ellison, left, and Dr. David Agus. Sensei Ag

Ellison is the cofounder of cloud-computing firm Oracle. The 76-year-old billionaire, who announced last year that he moved to Lanai full time during the pandemic, is known for being something of an international playboy, as well as an outspoken advocate for health and wellness. 

Ellison and late Apple CEO Steve Jobs were close friends for 25 years and often spent time hiking together near their neighboring homes in Woodside, California, prior to Jobs' death from pancreatic cancer in 2011. Ellison gave a eulogy at Jobs's funeral.

Agus, 57, is a prominent physician who treats patients with advanced forms of cancer and leads the USC cancer institute funded by Ellison. 

Agus and Ellison became close friends while Agus was treating Jobs' cancer, according to Forbes.

Ellison and Agus founded Sensei in 2018, and recently split the company in two: A data-driven wellness spa called Sensei Retreats, and Sensei Ag.

A person receiving a massage at Sensei Retreats in Hawaii. Robb Aaron Gordon

A person receiving a massage at Sensei Retreats in Hawaii. Robb Aaron Gordon

Located at a Four Seasons resort known as Sensei Lanai, Sensei Retreats offers guests a customizable experience: They can set physical and mental goals for their stay, and the spa will track their sleep, nutrition, and blood flow.

Sensei's overarching goal is to help people live longer and healthier lives by improving sleep, movement, and nutrition, the company says. 

Sensei Ag's primary focus is to bring healthy, affordable food to the masses by making indoor farming more accessible and more sustainable.

Inside a Sensei Ag greenhouse on Lanai. Sensei Ag

"Larry's perspective and David's perspective is that indoor growing is revolutionary and that we can move the needle on feeding people globally and diminishing water use and land use," Lo said. 

This goal will come with significant costs and an ambitious technology rollout, she said but cited the environmental benefits of moving farming indoors, particularly when it comes to water use: Indoor farming is shown to use significantly less water than outdoor farming. Greenhouses use roughly 10% the amount of water used in an open field, and vertical farms use even less — closer to 3%, Lo said.

In addition to focusing on sustainability, Sensei employs a team of plant scientists who are working on maximizing the nutrients in the crops Sensei grows. 

 

What makes Sensei Ag different from other indoor farming companies, Lo said, is that it works as a franchise model.

An exterior view of Sensei's greenhouses. Sensei Ag

An exterior view of Sensei's greenhouses. Sensei Ag

For the average farmer, shifting to indoor production can be prohibitively expensive, which is what's held back the indoor farming movement up to this point, Lo said. 

Farmers who opt for traditional outdoor growing have "a whole infrastructure that supports you," Lo said. That includes the ability to lease a tractor, lease land, and borrow other growers' cold storage and packing infrastructure.

"Whereas if you want to be an indoor grower, you have to come up with several hundred thousand dollars, at a minimum, if not several tens of millions," Lo said. 

What Sensei Ag offers is the "whole franchise package." That includes helping a farmer identify the right indoor growing form factor for their farm, whether that's a glass greenhouse or an indoor farm; setting up a "cold chain," or refrigerated supply chain; and locking in transportation and logistics.

There's also a data component to what Sensei Ag is offering to farmers. Sensei tracks factors like crop selection and what type of light a grower users, then feed that information into a dataset to help inform future Sensei partners. 

The produce grown by Sensei's partners can carry the Sensei Farms branding, and Sensei will help with distribution.

Crops growing inside a Lanai greenhouse. Sensei Ag

Lo said that a benefit to being one of Sensei's franchisees is the ability to distribute your produce at major US retailers. 

"If you go to Walmart and you say, 'I have a 200,000-square-foot greenhouse and I want to deal directly with you,' Walmart will say, 'Oh gosh, you know, we really can't manage you as a vendor that's that small,'" Lo said. 

"Whereas if you go to Walmart and you say, 'We're Sensei, and we have 200 farms across the US,' that's a risk that Walmart is willing to take," she said. 

Not all types of crops are suited to growing indoors, and what's typically grown today meets a three-pronged threshold: good nutrition, reliability, and affordability.

Tomatoes growing inside one of the greenhouses on Lanai. Sensei Ag

Lo pointed to tomatoes as a good example of food that is almost entirely grown indoors, because growers can offer good value to customers.

"That's taken 15 years and it's taken a lot of technology, a lot of reliability of growing, a lot of just processes and procedures that have come into play," Lo said. 

Lo predicted that the next crops to move primarily indoors will be leafy greens and strawberries. Strawberries, in particular, are becoming harder to grow outdoors due to a change in pesticide laws

But there are downsides to indoor growing, particularly when it comes to energy use.

Tesla solar panels at Sensei's Lanai greenhouses. Sensei Ag

Indoor farms are often powered by coal, so they still have a carbon footprint.

And while there are vertical farms that are powered by solar energy, they require as many as 20 acres of solar panels, which means you're not really using less land. 

At Sensei's farm on Lanai, there are six greenhouses spanning 120,000 square feet that are capable of producing over a million pounds of food per year, according to Forbes.

The greenhouses have sensors and cameras that track data about the farms, including water usage and airflow, and are powered by Tesla solar panels. (Ellison sits on Tesla's board.) 

Lo called Sensei's farm on Lanai its "lab for the world."

Sensei's farm on Lanai. Sensei Ag

"Islands are incredibly tough," she said, citing water, land, and labor constraints that make farming challenging on Lanai. But she said that the company has already met its initial goal of feeding the Hawaiian islands.

Sensei had its first harvest in August 2020, and by December, its produce was sold on every Hawaiian island. The food is packed on Lanai, then taken by barge to central Honolulu — from there, its distributed to the other islands, Lo said. 

Food that's grown at Sensei Farms is distributed at the Nobu restaurant located inside the Sensei resort nearby, with the aim of measuring the effect the food has on people who visit the Sensei Wellness program.

"Now our goal is to not just make food an export of Lanai, but also to take the learnings from Lanai — the business processes, the franchising model on the island, the water conservation, the water reuse — and really make it an intellectual product and then export that intellectual product," she said.

She added: "If it works on an island in the middle of the Pacific, it will work anywhere." 

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CANADA: Salad Days Vertical Farming Company Growing Business With Microgreens Subscription Program

For Scott Hyndman and Adam Dudek, the entrepreneurial learning curve has been as steep as their vegetable farm is tall — that is to say, very

For Scott Hyndman and Adam Dudek, the entrepreneurial learning curve has been as steep as their vegetable farm is tall — that is to say, very.

Years ago, the friends were sitting on Dudek’s Osborne Village balcony on a sunny summer day, admiring his tomato plants and grumbling about how difficult it was to find high-quality local produce year-round. The conversation became the catalyst for 3 Guys Greens, an urban vertical farm founded by the duo in 2016.

"If we’re frustrated with it, I’m sure there’s a lot of people who are frustrated with this too," Dudek says of Manitoba’s short growing season. "So we started looking into: how can we do this? There’s gotta be a way to grow this stuff indoors year-round."

Adam Dudek, right, and Scott Hyndman of 3 Guys Greens, a local vertical farming company, are offering a mixed greens subscription program. RUTH BONNEVILLE / WINNIPEG FREE PRESS

They rented warehouse space and started experimenting with vertical gardening and aquaponic systems to grow microgreens for local restaurants. Dudek is a plumber by trade and Hyndman is a trained chef — backgrounds that made up for what they lacked in business and agricultural experience. "This sort of farming is pretty much all plumbing," Dudek says with a laugh. "We’re consistently learning and consistently growing."

Until the COVID-19 pandemic hit, 3 Guys Greens sold microgreens — young, nutrient-packed vegetable sprouts — directly to restaurants as a garnish. The public health crisis has thrown the industry into turmoil and cut off a major revenue stream for the entrepreneurs.

Nutrient-rich micro greens can be used on a sandwich, in salads or cooked as a side dish.

RUTH BONNEVILLE / WINNIPEG FREE PRESS

"With the restaurants being shut down, there’s no real desire for them to have the added cost of garnish when they’re just putting it in a takeout box," Hyndman says. "That’s kind of why we wanted to go towards (selling) direct to the consumer."

This month, the company launched a salad subscription program that will see Winnipeggers getting greens and dressing delivered to their door once a week. The salads include a base of sunflower and pea shoots and a rotating blend of garnish mixes made from micro arugula, radish shoots, brassicas and mustard greens. They’ve also partnered with local catering company Loaf and Honey to create specialty salad dressings.

A monthly subscription costs $80 and each salad kit is expected to be enough greens for three to five days worth of meals, depending on how customers use the product. The microgreens can be eaten solo, added to other dishes or cooked as a side.

"The greens on wraps and sandwiches are absolutely amazing," Dudek says. "The pea shoots and sunflower I like to sauté with a little bit of lemon juice and some garlic."

Hyndman is a big proponent of the nutrient value of microgreens. One 2017 study out of Idaho State University found that broccoli sprouts had larger quantities of certain beneficial nutrients compared with their fully grown counterparts.

"You can eat your whole entire (microgreen) salad and you’ve eaten your 30 pounds of greens for the week," Hyndman says. "(Or) you can replace your normal lettuce on your burgers and in your tacos or whatever, and you still get to eat what you love, but now you’re incorporating these highly nutritious, nutrient-dense microgreens into your diet."

Operations manager Michelle Lecnik checks the status of the towers of basil.

RUTH BONNEVILLE / WINNIPEG FREE PRESS

The microgreens take 10 days to mature and are grown to order.

Since 2016, 3 Guys Greens — which was named when there was in fact a third business partner — has moved three times and now operates out of 26,000-square-foot building with rows upon rows of heavy-duty growing racks and four staff members. The system uses energy-efficient LED grow lights and minimal water, which gives traditional agriculture a run for its money, according to Hyndman.

"One of our towers grows roughly 50 plants on it, so basically in one square foot of our growing space we’re able to do roughly 100 feet of row farming," he says.

The company started growing basil last year and hopes to raise different kinds of produce in the future. They’re also working to develop vertical farming systems within northern Manitoba communities.

Visit 3guysgreens.com for more information and to sign up for their salad subscription program.

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Twitter: @evawasney

eva.wasney@freepress.mb.ca

Eva Wasney
Arts Reporter

Eva Wasney is a reporter for the Winnipeg Free Press.

   Read full biography

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Vertical Farming Startup Oishii Raises $50m In Series A Funding

“We aim to be the largest strawberry producer in the world, and this capital allows us to bring the best-tasting, healthiest berry to everyone.”

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By Sian Yates

03/11/2021

Oishii, a vertical farming startup based in New Jersey, has raised $50 million during a Series A funding round led by Sparx Group’s Mirai Creation Fund II.

The funds will enable Oishii to open vertical strawberry farms in new markets, expand its flagship farm outside of Manhattan, and accelerate its investment in R&D.

“Our mission is to change the way we grow food. We set out to deliver exceptionally delicious and sustainable produce,” said Oishii CEO Hiroki Koga. “We started with the strawberry – a fruit that routinely tops the dirty dozen of most pesticide-riddled crops – as it has long been considered the ‘holy grail’ of vertical farming.”

“We aim to be the largest strawberry producer in the world, and this capital allows us to bring the best-tasting, healthiest berry to everyone. From there, we’ll quickly expand into new fruits and produce,” he added.

Oishii is already known for its innovative farming techniques that have enabled the company to “perfect the strawberry,” while its proprietary and first-of-its-kind pollination method is conducted naturally with bees.

The company’s vertical farms feature zero pesticides and produce ripe fruit all year round, using less water and land than traditional agricultural methods.

“Oishii is the farm of the future,” said Sparx Group president and Group CEO Shuhei Abe. “The cultivation and pollination techniques the company has developed set them well apart from the industry, positioning Oishii to quickly revolutionise agriculture as we know it.”

The company has raised a total of $55 million since its founding in 2016.

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The Stock Market Discovers Indoor Ag In A Big Way

Special purpose acquisition companies are a faster cheaper way to raise company funds than the traditional IPO process. What role may they play in our ever growing vertical farming industry?

Robinhood antics aside, there’s no hotter topic in finance right now than SPACs (special purpose acquisition companies), and even indoor agriculture has become caught up in the buzz.

SPACs, or special purpose acquisition corporations, are a shell company that lists itself on a stock exchange and then uses the listing proceeds to acquire or merge with another company. It’s an attractive route to raising funds for companies looking for a faster and cheaper way to list than the rigours of the traditional IPO process. 

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Though SPACs have been around since the 1990s, they have had a reputation for being “the buyer of last resort”, primarily owing to a spate of failures in the early 2000s. The approach has once more taken off in recent years. There was nearly 8x as much raised in 2020 as in 2018, and 2021’s total has already surpassed last year’s[1]. The approach has become so hot that even Goldman Sachs junior investment bankers recently complained that they were burned out by the sheer volume of SPACs they’re working on[2]. 

This newfound enthusiasm is generally traced to a combination of tighter SEC regulations, efforts by cash-rich private equity companies to exit portfolio companies and fewer traditional IPO listings. Higher quality sponsors, such as 40-year old private equity firm Thoma Bravo, lead some to believe that things are different this time around.  The lustre of famous SPAC participants – such as baseball player A-Rod and basketball legend Shaquille O’Neal – has helped things along.  

Detractors point to post-listing underperformance by SPACs, high fees to sponsors and opaqueness around the acquisition of companies.  SPAC rules mean that institutional investors sometimes get to see information on potential acquisitions ahead of retail investors.[3] On a recent Clubhouse chat, one investor compared SPACs to the risky no-revenue internet listings of the late 1990s. Another questioned whether retail investors’ appetite for such vehicles would cause greater market volatility[4].

Dan Bienvenue, the interim CEO of mega public pension fund CALPERs, recently described SPACs as “fraught with potential misalignment, potential governance issues”.[5] That said, similar dire warnings have accompanied the rise of many a new approach in finance, most recently equity crowdfunding, and have proven wrong as often as right.

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As is so often the case in indoor agriculture, cannabis companies have led the way when it comes to SPACs, generally listing in Canada owing to the US federal prohibition on the crop. One example is Choice Consolidation Corp, which raised $150mm in February, and says that it plans to acquire “existing strong single-state operators”[6].

Historically, food-focused indoor agriculture companies have sourced little of their capital from public markets, preferring instead to work with private equity and strategic investors. To be sure, there is a small cadre of listed CEA firms, such as Canadian greenhouse operator Village Farms (TSE: VFF) and Canadian grow system tech company CubicFarm Systems Corp (TSXV: CUB) are exceptions to this rule.

All of that changed last month when Kentucky-based greenhouse company AppHarvest raised $475mm through NASDAQ listed SPAC Novus Capital. The funds will fuel the expansion of up to a dozen new farms through 2025.

Naturally, the move has led to speculation that vertical farms and greenhouses will follow suit, though it’s worth noting that the rules that govern SPACs aren’t necessarily friendly to CEA companies. They favour large, highly valued companies that easily capture the attention of retail investors, and those are not plentiful in CEA.  

Regardless of whether the SPAC trend becomes a permanent feature of the indoor farm fundraising landscape, one more method of accessing capital for CEA can only be a good thing. For the moment at least.

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For more information:
Contain
www.contain.ag

Note: None of the above constitutes investment advice.

Sources:
[1] SPACInsider figures
[2] “Goldman’s junior bankers complain of crushing workload amid SPAC-fueled boom in Wall Street deals”, CNBC, March 18, 2021
[3] For instance, where a PIPE is being considered by the SPAC
[4] “SPACS: IPO 2.0 & Agrifoodtech Exits”, March 4, 2021
[5] “CalPERS’ Bienvenue: SPACs are fraught with potential misalignment”, Private Equity International, March 16, 2021
[6] “New cannabis SPAC raises $150 million in IPO for US acquisitions”, Marijuana Business Daily, February 19, 2021

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Publication date: Wed 24 Mar 2021
Author: Rebekka Boekhout
© VerticalFarmDaily.com

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How Vertical Farms Are Revolutionizing Agribusiness

What is vertical farming and why does it matter?

William Ramstein ・ 1 March 2021 ・ Vertical Farming

Urban planners are tasked with answering some pressing inquiries: how can farming be brought closer to consumers; is digital agriculture an essential ingredient for making cities smarter; and can vertical farming improve socio-economic disparities?

Key Takeaways:

  • Vertical farming uses LED, Robotics and AI to bring vegetables closer to city dwellers.

  • The total addressable market for vertical farming is estimated at around $700 billion.

  • Spread, a Japanese vertical farm is profitable but most firms fail.

  • Vertical farming is a great way to produce controlled supplies of a customized plant.

  • Vertical farming struggles with electricity costs despite reducing carbon emissions.

What is vertical farming and why does it matter?
The bedrock characteristic of cryptocurrency technology is called decentralization, a sovereign and flexible organizational system led by a commune, and today other industries like farming are catching the bug. Farming needs to change its practices in order to meet ecological objectives set up by governments and decentralization could open the door to increasing food access and reducing carbon emissions from food transportation. Smart decentralized vertical farming implies using technology like digital platforms, robotics and artificial intelligence to bring food closer to the growing demand seen in cities.

Despite the difficulty of competing against the cost structure of traditional farming, vertical farming offers numerous advantages. It grants more yield per square meter and reduces waste in both carbon and water usage. The production of vegetables is made in large and often times un-used warehouses close to city centers thus cutting transportation costs and middlemen expenses. The supply is more easily controlled, protected, and priced regardless of global weather and plants are customized to local consumer preferences. Consumers are already paying a premium on farmer’s market products, so why not vertical farm products too?

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Cases of vertical farming: Nigeria is one of the most promising African nations because of its age pyramid. But with a large young population comes questions around food and water access and today, more than 170 million Nigerians need prolonged and sustainable access to these resources. Nigeria currently imports $3.5 billion worth of food products while exporting only 1/7 of that figure. Fresh Direct is Nigeria’s first Hydroponics Company (growing crops without standard soil) that combines vertical farming to its business model to reduce the distance between cities and rural farming regions.

The firm is able to produce seven to 10 times the yields because of its stackable shipping containers, which use technologies such as drip irrigation, and cold storage. Direct Farming operates with a community mindset, with the goal to inspire more young farmers to set up shop in urban centers and become urban farmers. The company also trains and finances low-skilled workers into urban farmers and increases economic productivity in unemployed youth groups.

In Japan, a company called Spread is one of the world’s most sophisticated examples of vertical farming. Their factory mainly produces lettuce. Large robotic arms transplant lettuce seedlings into pots where they are left to grow under LED lights. Believe it or not, but the factory can produce 30,000 lettuce heads a day. CEO Shinji Inada boasts of being the only large-scale vertical farm that is profitable and hopes that more widespread adoption continues growing.

However, companies like Spread and A-Plus (another similar farm in Fukushima) struggle to lower unit economics because of their low-scale operations, and they find it hard to penetrate the traditional downstream sellers. When producing high-priced lettuce by the tonne, trucking goods to the local wholesaler does not work partly because vertical farming offers customized products for specific local needs, not necessarily for broad demand. These players have thus geared their focus towards international buyers like UAE to export their goods.

Is vertical farming there yet?
Most vertical farms have failed because of the high initial costs and high operational expenses of running robotic equipment. While sunlight is free, the energy cost of running LEDs is not. The solution could be to install renewable energies like solar panels and wind turbines. However, the fixed cost of that installation would inevitably factor into the end-product, or at least on the balance sheet as a liability assuming they keep prices reasonable for consumers.

While Mr. Inada can rightly boast of turning profits, most firms toss lettuce at a loss. The industry should see more growth ahead, however, with research group IDTechEx forecasting that annual sales of $700 million could more than double to $1.5 billion in 2030. There remain technological challenges though. While many competitors boast of successfully leveraging AI and robotics and filtration, new entrants have seen problems with watering automation systems, mold, and infestations (most players do not use pesticides).

Some analysts suggest that while the excitement around vertical farms makes sense, the farming style might just end up becoming just another way of farming amongst greenhouse and open sky farms. More specifically, vertical farming will focus on high-margin crops rather than commodities like bulk grains.

While the challenges of vertical farming are clear, every country has different needs and constraints. There is a large interest from smaller island countries like Singapore or Iceland, rich economies, and countries that have a higher propensity to import due to less arable lands. Britain is a good example of a country that meets the criteria and in the context of Brexit, it makes all the more sense because of import costs and independence constraints. A potential labor crisis could soon loom too assuming seasonal workers are denied entry into the country. Vertical farms only require one-third of the manpower to run and could therefore alleviate the industry.

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 The market opportunity…According to research by Barclays Investment Bank, the market opportunity for vertical farms is large. Analysts estimate the size of the global fruit and vegetable market to be $1.2 trillion and the total addressable market for vertical farms to be $700 billion. The purchased energy use to produce 1kg of lettuce is 247-kilowatt hours far exceeding Netherland greenhouses’ 70-kilowatt hours consumption. With retailers being asked to meet more carbon-neutral objectives, some vertical farms believe they will be able to overcome their expense through increased demand and scale.

The pandemic has imposed many supply chains disruptions and labor shortages threatening food security in regions around the world relying heavily on imports. Vertical farming is recognized lately and since 2014, has seen a flow of funds equal to $1.8 billion according to data group Dealroom. SoftBank fundraised $140 million into Plenty, a start-up, and countries like Abu Dhabi want to build farms in deserts.

Some of the top players in the global farming market include Vertical Farm Systems (Australia), American Hydroponics (US), Agrilution (Germany), Green Sense Farms (US), Everlight Electronics (Taiwan), Koninklijke Philips (Netherlands), Sky Greens (Singapore), Illumitex (US), Urban Crop (Belgium), Aerofarms (US) and InFarm (Germany).

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Little Leaf Farms Raises $90M to Grow Its Greenhouse Network

Massachusetts-based Little Leaf Farms has raised $90 million in a debt and equity financing round to expand its network of hydroponic greenhouses on the East Coast. The round was led by Equilibrium Capital as well as founding investors Bill Helman and Pilot House Associates. Bank of America also participated.

by Jennifer Marston

Image from: Little Leaf Farms

Image from: Little Leaf Farms

Massachusetts-based Little Leaf Farms has raised $90 million in a debt and equity financing round to expand its network of hydroponic greenhouses on the East Coast. The round was led by Equilibrium Capital as well as founding investors Bill Helman and Pilot House Associates. Bank of America also participated.

Little Leaf Farms says the capital is “earmarked” to build new greenhouse sites along the East Coast, where its lettuce is currently available in about 2,500 stores. 

The company already operates one 10-acre greenhouse in Devins, Massachusetts. Its facility grows leafy greens using hydroponics and a mixture of sunlight supplemented by LED-powered grow lights. Rainwater captured from the facility’s roof provides most of the water used on the farm. 

According to a press release, Little Leaf Farms has doubled its retail sales to $38 million since 2019. And last year, the company bought180 acres of land in Pennsylvania on which to build an additional facility. Still another greenhouse, slated for North Carolina, will serve the Southeast region of the U.S. 

Little Leaf Farms joins the likes of Revol GreensGotham GreensAppHarvest, and others in bringing local(ish) greens to a greater percentage of the population. These facilities generally pack and ship their greens on the day of or day after harvesting, and only supply retailers within a certain radius. Little Leaf Farms, for example, currently servers only parts of Massachusetts, Pennsylvania, New York, and New Jersey. 

The list of regions the company serves will no doubt lengthen as the company builds up its greenhouse network in the coming months.

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Agritech: Precision Farming With AI, IoT and 5G

For a company that grows and delivers vegetables, Boomgrow Productions Sdn Bhd’s office is nothing like a farm, or even a vertical farm. Where farms are bedecked with wheelbarrows, spades and hoes, Boomgrow’s floor plan is akin to a co-working space with a communal island table, several cubicles, comfortable armchairs, a cosy hanging rattan chair and a glass-walled conference room in the middle

Image from: Photo by Mohd Izwan Mohd Nazam/The Edge

Image from: Photo by Mohd Izwan Mohd Nazam/The Edge

For a company that grows and delivers vegetables, Boomgrow Productions Sdn Bhd’s office is nothing like a farm, or even a vertical farm.

Where farms are bedecked with wheelbarrows, spades and hoes, Boomgrow’s floor plan is akin to a co-working space with a communal island table, several cubicles, comfortable armchairs, a cosy hanging rattan chair and a glass-walled conference room in the middle.

At a corner, propped up along a walkway leading to a rectangular chamber fitted with grow lights, are rows of support stilts with hydroponic planters developed in-house and an agricultural technologist perched on a chair, perusing data. “This is where some of the R&D work happens,” says Jay Dasen, co-founder of the agritech start-up.

But there is a larger farm where most of the work behind this high-tech initiative is executed. Located a stone’s throw from the city centre in Ampang is a 40ft repurposed shipping container outfitted with perception technologies and artificial intelligence (AI) capabilities that mimic the ideal environment to produce more than 50,000kg of vegetables a year.

Stacked in vertical layers, Boomgrow’s vegetables are grown under artificial lights with Internet of Things (IoT) sensors to detect everything from leaf discolouration to nitrate composition. This is coupled with AI and machine learning algorithms.

Boomgrow is the country’s first 5G-connected vertical farm. With the low latency and larger bandwidth technology, the start-up is able to monitor production in real time as well as maintain key para­meters, such as temperature and humidity, to ensure optimal growth conditions.

When Jay and her co-founders, K Muralidesan and Shan Palani, embarked on this initiative six years ago, Boomgrow was nowhere near what it is today.

The three founders got together hoping to do their part in building a more sustainable future. “I’ve spent years advising small and large companies on sustainability, environmental and social governance disclosures. I even embarked on a doctorate in sustainability disclosure and governance,” says Jay.

“But I felt a deep sense of disconnect because while I saw companies evolving in terms of policies, processes and procedures towards sustainability, the people in those organisations were not transforming. Sustainability is almost like this white noise in the background. We know it’s important and we know it needs to be done, but we don’t really know how to integrate it into our lives.

“That disconnect really troubled me. When we started Boomgrow, it wasn’t a linear journey. Boomgrow is something that came out of meaningful conversations and many years of research.”

Shan, on the other hand, was an architect who developed a taste for sustainable designs when he was designing modular structures with minimal impact on their surroundings between regular projects. “It was great doing that kind of work. But I was getting very dissatisfied because the projects were customer-driven, which meant I would end up having debates about trivial stuff such as the colour of wall tiles,” he says.

As for Murali, the impetus to start Boomgrow came from having lived overseas — while working in capital markets and financial services — where quality and nutritious produce was easily available.

Ultimately, they concluded that the best way to work towards their shared sustainability goals was to address the imminent problem of food shortage.

“By 2050, the world’s population is expected to grow to 9.7 billion people, two-thirds of whom will be in Asia-Pacific. Feeding all those people will definitely be a huge challenge,” says Jay. 

“The current agricultural practice is not built for resilience, but efficiency. So, when you think of farming, you think of vast tracts of land located far away from where you live or shop.

“The only way we could reimagine or rethink that was to make sure the food is located closer to consumers, with a hyperlocal strategy that is traceable and transparent, and also free of pesticides.”

Having little experience in growing anything, it took them a while to figure out the best mechanism to achieve their goal. “After we started working on prototypes, we realised that the tropics are not designed for certain types of farming,” says Jay. 

“And then, there is the problem of harmful chemicals and pesticides everywhere, which has become a necessity for farmers to protect their crops because of the unpredictable climate. We went through many iterations … when we started, we used to farm in little boxes, but that didn’t quite work out.”

They explored different methodologies, from hydroponics to aquaponics, and even started growing outdoors. But they lost a lot of crops when a heat wave struck.

That was when they started exploring more effective ways to farm. “How can we protect the farm from terrible torrential rains, plant 365 days a year and keep prices affordable? It took us five years to answer these questions,” says Jay.

Even though farmers all over the world currently produce more than enough food to feed everyone, 820 million people — roughly 11% of the global population — did not have enough to eat in 2018, according to the World Health Organization. Concurrently, food safety and quality concerns are rising, with more consumers opting for organically produced food as well as safe foods, out of fear of harmful synthetic fertilisers, pesticides, herbicides and fungicides.

According to ResearchAndMarkets.com, consumer demand for global organic fruit and vegetables was valued at US$19.16 billion in 2019 and is anticipated to expand at a compound annual growth rate (CAGR) of 6.5% by 2026.

Meanwhile, the precision farming market was estimated to be US$7 billion in 2020 and is projected to reach US$12.8 billion by 2025, at a CAGR of 12.7% between 2020 and 2025, states MarketsandMarkets Research Pte Ltd.

Malaysia currently imports RM1 billion worth of leafy vegetables from countries such as Australia, China and Japan. Sourcing good and safe food from local suppliers not only benefits the country from a food security standpoint but also improves Malaysia’s competitive advantage, says Jay.

Unlike organic farming — which is still a soil-based method — tech-enabled precision farming has the advantage of catering for increasing demand and optimum crop production with the limited resources available. Moreover, changing weather patterns due to global warming encourage the adoption of advanced farming technologies to enhance farm productivity and crop yield.

Boomgrow’s model does not require the acres of land that traditional farms need, Jay emphasises. With indoor farms, the company promises a year-round harvest, undisturbed by climate and which uses 95% less water, land and fuel to operate.

Traditional farming is back-breaking labour. But with precision technology, farmers can spend less time on the farm and more on doing other things to develop their business, she says.

Boomgrow has secured more than RM300,000 in funding via technology and innovation grants from SME Corporation Malaysia, PlaTCOM Ventures and Malaysia Digital Economy Corporation, and is on track to build the country’s largest indoor farms.

Image from: Boomgrow

Image from: Boomgrow

The company got its chance to showcase the strength of its smart technology when Telekom Malaysia Bhd (TM) approached it to be a part of the telco’s Smart Agriculture cluster in Langkawi last October.

“5G makes it faster for us to process the multiple data streams that we need because we collect data for machine learning, and then AI helps us to make decisions faster,” Jay explains.

“We manage the farm using machines to study inputs like water and electricity and even measure humidity. All the farm’s produce is lab-tested and we can keep our promise that there are no pesticides, herbicides or any preserving chemicals. We follow the food safety standards set by the EU, where nitrate accumulation in plant tissues is a big issue.”

With TM’s 5G technology and Boomgrow’s patent-pending technology, the latter is able to grow vegetables like the staple Asian greens and highland crops such as butterhead and romaine lettuce as well as kale and mint. While the company is able to grow more than 30 varieties of leafy greens, it has decided to stick to a selection of crops that is most in demand to reduce waste, says Jay.

As it stands, shipping containers are the best fit for the company’s current endeavour as containerised modular farms are the simplest means of bringing better food to local communities. However, it is also developing a blueprint to house farms in buildings, she says.

Since the showcase, Boomgrow has started to supply its crops to various hotels in Langkawi. It rolled out its e-commerce platform last year after the Movement Control Order was imposed. 

“On our website, we promise to deliver the greens within six hours of harvest. But actually, you could get them way earlier. We harvest the morning after the orders come in and the vegetables are delivered on the same day,” says Jay.

Being mindful of Boomgrow’s carbon footprint, orders are organised and scheduled according to consumers’ localities, she points out. “We don’t want our delivery partners zipping everywhere, so we stagger the orders based on where consumers live. 

“For example, all deliveries to Petaling Jaya happen on Thursdays, but the vegetables are harvested that morning. They are not harvested a week before, three days before or the night before. This is what it means to be hyperlocal. We want to deliver produce at its freshest and most nutritious state.”

Plans to expand regionally are also underway, once Boomgrow’s fundraising exercise is complete, says Jay. “Most probably, this will only happen when the Covid-19 pandemic ends.”

To gain the knowledge they have today, the team had to “unlearn” everything they knew and take up new skills to figure what would work best for their business, says Jay. “All this wouldn’t have been possible if we had not experimented with smart cameras to monitor the condition of our produce,” she laughs.

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How This Vertical Farm Grows 80,000 Pounds of Produce per Week

To some, the pristine growing conditions and perceived mechanical interference of a vertical farm can seem unnatural, but at Bowery Farming “interference” is actually not the goal at all. “We don’t really think about how people are involved in the growing process, but how to take people out of the growing process”

Bowery Farming uses technology to prioritize accessibility and sustainability in their produce growing operations

To some, the pristine growing conditions and perceived mechanical interference of a vertical farm can seem unnatural, but at Bowery Farming “interference” is actually not the goal at all. “We don’t really think about how people are involved in the growing process, but how to take people out of the growing process” says chief science officer Henry Sztul. “Our goal is actually to have as few people walking around our plants as possible.”

Bowery Farming is a network of vertical farms working to reengineer the growing process. Using a system of light and watering technology, Bowery is able to use 95 percent less water than a traditional outdoor farm, zero pesticides and chemicals, and grow food that tastes as good as anyone else’s. 

Bowery Farming uses vertical farm-specific seeds that are optimized for flavor instead of insect resistance and durability. Seeds are mechanically pressed into trays of soil, and sent out into growing positions, or racks within the building that have their own lighting and watering systems. Each tray gets its own QR code so that they can be monitored and assigned a customized plan for water and light until they’re ready to be harvested.

Irving Fain, Bowery Farming’s founder and CEO contemplates the prediction from the United Nations that 70 to 80 percent of the world’s population will be living in and around cities in the next 30 years. “Figuring out ‘how do you feed and how do you provide fresh food to urban environments both more efficiently as well as more sustainably?’ is a very important question today, and an even more important question in the years to come.”

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Bringing The Future To life In Abu Dhabi

A cluster of shipping containers in a city centre is about the last place you’d expect to find salad growing. Yet for the past year, vertical farming startup Madar Farms has been using this site in Masdar City, Abu Dhabi, to grow leafy green vegetables using 95 per cent less water than traditional agriculture

Amid the deserts of Abu Dhabi, a new wave of entrepreneurs and innovators are sowing the seeds of a more sustainable future.

Image from: Wired

Image from: Wired

A cluster of shipping containers in a city centre is about the last place you’d expect to find salad growing. Yet for the past year, vertical farming startup Madar Farms has been using this site in Masdar City, Abu Dhabi, to grow leafy green vegetables using 95 per cent less water than traditional agriculture. 

Madar Farms is one of a number of agtech startups benefitting from a package of incentives from the Abu Dhabi Investment Office (ADIO) aimed at spurring the development of innovative solutions for sustainable desert farming. The partnership is part of ADIO’s $545 million Innovation Programme dedicated to supporting companies in high-growth areas.

“Abu Dhabi is pressing ahead with our mission to ‘turn the desert green’,” explained H.E. Dr. Tariq Bin Hendi, Director General of ADIO, in November 2020. “We have created an environment where innovative ideas can flourish and the companies we partnered with earlier this year are already propelling the growth of Abu Dhabi’s 24,000 farms.”

The pandemic has made food supply a critical concern across the entire world, combined with the effects of population growth and climate change, which are stretching the capacity of less efficient traditional farming methods. Abu Dhabi’s pioneering efforts to drive agricultural innovation have been gathering pace and look set to produce cutting-edge solutions addressing food security challenges.

Beyond work supporting the application of novel agricultural technologies, Abu Dhabi is also investing in foundational research and development to tackle this growing problem. 

In December, the emirate’s recently created Advanced Technology Research Council [ATRC], responsible for defining Abu Dhabi’s R&D strategy and establishing the emirate and the wider UAE as a desired home for advanced technology talent, announced a four-year competition with a $15 million prize for food security research. Launched through ATRC’s project management arm, ASPIRE, in partnership with the XPRIZE Foundation, the award will support the development of environmentally-friendly protein alternatives with the aim to "feed the next billion".

Image from: Madar Farms

Image from: Madar Farms

Global Challenges, Local Solutions

Food security is far from the only global challenge on the emirate’s R&D menu. In November 2020, the ATRC announced the launch of the Technology Innovation Institute (TII), created to support applied research on the key priorities of quantum research, autonomous robotics, cryptography, advanced materials, digital security, directed energy and secure systems.

“The technologies under development at TII are not randomly selected,” explains the centre’s secretary general Faisal Al Bannai. “This research will complement fields that are of national importance. Quantum technologies and cryptography are crucial for protecting critical infrastructure, for example, while directed energy research has use-cases in healthcare. But beyond this, the technologies and research of TII will have global impact.”

Future research directions will be developed by the ATRC’s ASPIRE pillar, in collaboration with stakeholders from across a diverse range of industry sectors.

“ASPIRE defines the problem, sets milestones, and monitors the progress of the projects,” Al Bannai says. “It will also make impactful decisions related to the selection of research partners and the allocation of funding, to ensure that their R&D priorities align with Abu Dhabi and the UAE's broader development goals.”

Image from: Agritecture

Image from: Agritecture

Nurturing Next-Generation Talent

To address these challenges, ATRC’s first initiative is a talent development programme, NexTech, which has begun the recruitment of 125 local researchers, who will work across 31 projects in collaboration with 23 world-leading research centres.

Alongside universities and research institutes from across the US, the UK, Europe and South America, these partners include Abu Dhabi’s own Khalifa University, and Mohamed bin Zayed University of Artificial Intelligence, the world’s first graduate-level institute focused on artificial intelligence. 

“Our aim is to up skill the researchers by allowing them to work across various disciplines in collaboration with world-renowned experts,” Al Bannai says. 

Beyond academic collaborators, TII is also working with a number of industry partners, such as hyperloop technology company, Virgin Hyperloop. Such industry collaborations, Al Bannai points out, are essential to ensuring that TII research directly tackles relevant problems and has a smooth path to commercial impact in order to fuel job creation across the UAE.

“By engaging with top global talent, universities and research institutions and industry players, TII connects an intellectual community,” he says. “This reinforces Abu Dhabi and the UAE’s status as a global hub for innovation and contributes to the broader development of the knowledge-based economy.”

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“Autonomy Will Not Happen Until We Start Sharing Data”

In an emerging industry with companies eager to prove their technologies’ worth, Sensei Ag remains form-factor agnostic, meaning that the agtech company remains unbiased towards different farm hardware solutions – focusing more on software and plant biology. Sensei Ag is a market-changing agtech company that develops agile growing solutions through a highly iterative approach to farming, focused on improving the nutritional quality of fruits and vegetables while also reducing production costs. The company combines plant science, computer vision, machine learning, automation and artificial intelligence into its growing systems

In an emerging industry with companies eager to prove their technologies’ worth, Sensei Ag remains form-factor agnostic, meaning that the agtech company remains unbiased towards different farm hardware solutions – focusing more on software and plant biology.

Sensei Ag is a market-changing agtech company that develops agile growing solutions through a highly iterative approach to farming, focused on improving the nutritional quality of fruits and vegetables while also reducing production costs. The company combines plant science, computer vision, machine learning, automation and artificial intelligence into its growing systems.

According to Sensei Ag CEO Sonia Lo, remaining form factor agnostic is key to the company’s mission of providing hyper-nutritious food to as large a consumer base as possible, which it achieves through both vertical farms and greenhouses.

Image from: Sensei Ag

Image from: Sensei Ag

“We believe that the most robust data comes from operating farms of multiple types. So, not just vertical farms, but also low-tech and high-tech greenhouses. And with vertical farms, we are looking at a number of form factors. Our end goal is to be  a grower’s resource and know more about growing at scale with different form factors than anyone else.”

The company is also a strong advocate for open data in the vertical farming industry, which is currently lacking, as evidenced by the siloed development of multiple systems and products, some of which cannot be easily integrated into third-party systems.

“There are lots of data flows and increasingly inexpensive farm management systems. The question, then, is the organization of data into intelligence. Intelligence facilitates autonomy, and as we manage data flows, more farms can become autonomous. But I don’t think autonomy will happen until we start sharing data. For example, we saw an automation supplier with a great robot.

The problem was the robot only works in their ecosystem, so you have to buy the whole farming solution in order for the one robot to work. Ideally, that robot would be plug and play and be able to work in greenhouses and vertical farms,” says Sonia.

Image from: Sensei Ag

Image from: Sensei Ag

According to Sonia, open data in the vertical farming industry may currently be restricted by the dominance of venture financing, which has its own return mandates to fulfill and sometimes wants a “winner takes it all” mentality for the ventures it chooses to back. While such financing has allowed the vertical farming industry to emerge, it may ultimately hinder the industry’s scalability and information sharing.

“There is definitely a capital model in Silicon Valley and in venture capital world in general which is not focused on profitability but is focused on technological achievement and market penetration. We saw this in solar and in the renewables industry when multiple venture capital funds invested in solar assets. Then, the bottom fell out because government subsidies fell away in certain jurisdictions.

I hope that agricultural infrastructure currently financed by venture capital will not necessarily follow the same pathway as solar, but will instead find a public-private partnership model. At some point, these farms need to demonstrate a profit for the debt capital markets to allow scale to occur.”

Image from: Sensei Ag

Image from: Sensei Ag

By embracing open data and transparency, Sonia explains that the vertical farming industry can further mature and iterate with technology to continue lowering costs. By continuously collecting and sharing data from different farm forms, the vertical farming industry would have better insights into the true costs which, according to Sonia, “helps drive scale because it enables the finance community to understand how the farms can be risk assessed and financed.”

Looking ahead, Sensei Ag hopes to form partnerships around the world to bring its innovative, data-driven growing systems across the globe. Taking the Middle East, China and Japan as examples, Sonia explained that the goal would be to choose strategic partners in each region whose local knowledge and business prowess would allow Sensei Ag to iterate its technologies appropriately and serve local markets, bringing cost-competitive farming techniques and nutritious, local produce around the world.

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Is AppHarvest the Future of Farming?

In this video from Motley Fool Live, recorded on Jan. 28, Industry Focus host Nick Sciple and Motley Fool contributor Lou Whiteman discuss AppHarvest, one such SPAC that is looking to disrupt the agriculture industry. Here are the details on what AppHarvest wants to do, and a look at whether the company represents the future of farming.

Special purpose acquisition companies, or SPACs, are red-hot right now, with investors clamoring to get into promising young companies.

In this video from Motley Fool Liverecorded on Jan. 28, Industry Focus host Nick Sciple and Motley Fool contributor Lou Whiteman discuss AppHarvest, one such SPAC that is looking to disrupt the agriculture industry. Here are the details on what AppHarvest wants to do, and a look at whether the company represents the future of farming.

Nick Sciple: One last company I wanted to talk about, Lou, and this is one I think it's -- you pay attention to, but not one I'm super excited to run in and buy. It was a company called AppHarvest. It's coming public via a [SPAC] this year. This vertical farming space. We talked about Gladstone Land buying traditional farmland. AppHarvest is taking a very different approach, trying to lean into some of the ESG-type movements.

Lou Whiteman: Yeah. Let's look at this. It probably wouldn't surprise you that the U.S. is the biggest global farm exporter as we said, but it might surprise you that the Netherlands, the tiny little country, is No. 2. The way they do that is tech: Greenhouse farm structure. AppHarvest has taken that model and brought it to the U.S. They have, I believe, three farms in Appalachia. The pitches can produce 30x the yields using 90% less water. Right now, it's mostly tomatoes and it is early-stage. I don't own this stock either. I love this idea. There's some reasons that I'm not buying in right now that we can get into. But this is fascinating to me. We talked about making the world a better place. This is the company that we need to be successful to make the world a better place. The warning on it is that it is a SPAC. So it's not public yet. Right now, I believe N-O-V-S. That deal should close soon. [Editor's note: The deal has since closed.] I'm not the only one excited about it. I tend not to like to buy IPOs and new companies anyway. I think the caution around buying into the excitement applies here. There is a Martha Stewart video on their website talking up the company, which I love Martha Stewart, but that's a hype level that makes me want to just watch and see what they produce. This is just three little farms in Appalachia right now and a great idea. This was all over my watchlist. I would imagine I would love to hold it at some point, but just be careful because this is, as we saw SPACs last year in other areas, people are very excited about this.

Sciple: Yeah. I think, like we've said, for a lot of these companies, the prospects are great. I think when you look at the reduced water usage, better, environmentally friendly, all those sorts of things. I like that they are in Appalachia. As someone who is from the South, I like it when more rural areas get some people actually investing money there. But again, there's a lot of execution between now and really getting to a place where this is the future of farming and they're going to reach scale and all those sorts of things. But this is a company I'm definitely going to have my radar on and pay attention to as they continue to report earnings. Because you can tell yourself a story about how this type of vertical farming, indoor farming disrupts this traditional model, can be more efficient, cleaner, etc. Something to continue paying attention to as we have more information, because this company, like you said, Lou, isn't all the way public yet. We still got to have this SPAC deal finalized and then we get all our fun SEC filings and quarterly calls and all those sorts of things. Once we have that, I will be very much looking forward to seeing what the company has to say.

Whiteman: Right. Just to finish up along too, the interesting thing here is that it is a proven concept because it has worked elsewhere. The downside of that is that it needed to work there. Netherlands just doesn't have -- and this is an expensive proposition to get started, to get going. There's potential there, but in a country blessed with almost seemingly unlimited farmland for now, for long term it makes sense. But in the short term, it could be a hard thing to really get up and running. I think you're right, just one to watch.

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Advice For New Vertical Farmers: Grower Spotlight on Andrew Worrall

Andrew is LettUs Grow’s Farm Manager, he manages two of our sites across Bristol and has brought a wealth of knowledge into the company through his previous experience in indoor farming roles across the UK including at Grow Up, Raynor Foods & RootLabs. In this three part interview, we explore what it’s been like to move from animal husbandry to indoor farming, the lessons he’s learned along the way, what it’s like working at LettUs Grow and his advice for those new to indoor growing.

LettUs Grow Image 1.png

Last week we spoke about running a farm at LettUs Grow. What excites you about vertical farming? 

It’s the future of the industry. Also, the amount of salad that these farms can produce for their local community. We want to be able to eat salad all year round and we import to make that happen. However, just a small farm can easily provide for its local community, very efficiently and all year round. The sustainability element is also exciting: with our salad there’s no food miles, it’s very minimalistic. You could use an electric van or bike to distribute this crop if you wanted to. It’s a step forward in terms of what we need to do to take care of our planet. 

What do you think are the biggest downsides to vertical farming?

It’s still a new technology and it can be expensive. The biggest roadblock facing the industry is that we need more people and companies to collaborate together to make sure we can build these farms at a sensible rate, so we can provide farms to anyone. We want to be able to provide farms to people, communities and countries that don’t have a lot of money, so that they can provide affordable fresh produce to local people. 

How has vertical farming impacted your life?

Massively!  I wanted to find my passion, a job that I loved - that was very important to me. It’s satisfying to be in a position now where I’m very happy to be doing what I do and I look forward to going into work. I was happy to make the move from London to Bristol. I would have moved even further if it meant being able to continue working within this industry.

LettUs Grow Pic 2.jpg

Image from: LettUs Grow

How do you see vertical farming playing a part in the future? 

When indoor farming first came about, it had a reputation of being competition for outdoor farming, which just isn’t the case. There’s so much we can’t grow that outdoor farming can provide, such as cereal crops. I’m glad we’re at a stage where indoor and outdoor farms can start to work together to optimise both methods. With these new relationships, there should be a good increase in the amount of indoor farms you’ll be seeing. What LettUs Grow offers with DROP & GROW™ is an exciting project because that’s a 40ft shipping container which can be placed pretty much anywhere. It’s not that big - it could go in a car park or behind a restaurant, but actually provide quite a lot of salad to that area. 

How much of our food should be grown this way? 

Good question. If you had asked me a while back I would have just said salad, but now I’ve changed my mind. Indoor farming can have a massive impact on propagation, especially aeroponics, because of how we aerate and nourish our roots. We could start lettuce for greenhouse projects and we can also propagate tomatoes, strawberries and tree whips. Propagating trees in this way could potentially be hugely beneficial and it’s something we want to do more of. 

We can also quickly grow large amounts of microgreens, baby leafs, herbs and we can grow fruiting crops like strawberries. We are slowly chipping away and it’s really exciting. I’m waiting to see if I can ever say I’ve grown or propagated every crop that can be grown in these farms! 

What do you think are the biggest benefits of vertical farming? 

How fast these crops can grow! The turnover can be as short as 5 days from seed, depending on the crop. Also how clean it can be - I’m very dedicated to making sure these farms are built to ensure they are easy to be maintained and clean. The most exciting part is the crop growth rate though - it’s incredible how fast our crop grows from seed to plate. In a very well maintained growing calendar, which Ostara® is great for supporting, you can optimise your beds so that the day you harvest can also be the day you germinate onto that same bed. Your farms can be forever providing salad at very fast rates. 

Image from: LettUs Grow

Image from: LettUs Grow

What was the biggest change you encountered during your years indoor farming?

Moving from being a production grower to an R&D grower. It has been a great change! As a production grower I knew what I needed to know about growing the plant safely and getting it onto a plate so it was good for the consumer. Now I’m fully optimising, learning and understanding the plants completely, so that I can help the grower that I used to be. We spend a lot of time on crop recipes to make sure that whoever we sell our farms to can start up very quickly and they won’t have to spend months developing their crops. If they have the customers and clients behind them, they can buy DROP & GROW and start producing salad as soon as it's been commissioned. 

What was the biggest change you encountered in the industry?

More and more people are speaking about what’s going on in the industry and getting involved. I get so many messages on LinkedIn with people who want to get into this career. It’s exciting to see that indoor growing is a career people can access now. When I was developing my skills I didn’t know I would end up in indoor farming. There are more opportunities than ever before. For example, our Crop Technician is doing a placement here for 2 years. The aim is that they can gain the skill sets and knowledge they need to then go off and do the same practice in any farm they want. 

What advice do you have for people who are looking to start a career in growing? 

Reach out to companies who are already out there. You could start off part-time or as an assistant. If you are patient and dedicated then it’s a journey I promise you won’t regret. It takes a lot of work, but the outcome is amazing - you’ll be learning so much about this new technology. You’ll also build great relationships: there are so many amazing people in this industry who are so interesting, with different backgrounds, who are willing to share their knowledge. You can always learn more and other people are a great source of that. 

What about for those looking to start a vertical farming business?

Do your homework.  There are people out there who you can reach out to and it’s very easy to get information. It’s very easy to get excited about the idea and jump straight into it, because it is exciting and can be very rewarding, but it’s really important to do it step by step. Know how to scale properly, learning the differences between a small and larger farm. Understand how many people you’ll need and the logistics. I’d also advise people to get some practical work experience before you buy. You want to start the company knowing the tricks of the trade. 

Image from: LettUs Grow

Image from: LettUs Grow

LettUs Grow Blog: www.lettusgrow.com/blog/advice-for-vertical-farmers

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Understanding The Key Tech Required In Vertical Farming

Staff Reporter Jan 25, 2021

Vertical farming involves; growing crops indoors under artificial temperature and lighting conditions. This technology focuses on increasing productivity in small places. It utilizes soil-free methods like aeroponics, aquaponics, and hydroponics. Read on to understand the main tech you need for your vertical farm. 

(Photo : Valcenteu Wikimedia Commons)

(Photo : Valcenteu Wikimedia Commons)

Lighting systems

Covered agriculture, which is the traditional method of farming uses HPS (High-Pressure Sodium) vapor lamps. These units generate a warm light, which appears as an orange-yellow glow in areas with many glasshouses. LED technologies have evolved, becoming more energy-efficient and cheaper. 

LED vertical farming lighting dictates the next generation controlled environment agriculture (CEA). While HPS lamps generate orangey-yellow light, LEDs can be designed to generate light in any color or combination of choice. Today, more LED lights are specially designed for the CEA industry. 

Researchers are working with manufacturers to manufacture crop-specific lights to enhance photosynthesis, guarantee crop quality, and boost yield production. When growing crops in an indoor environment without a natural or external light source, the quality and quantity of artificial vertical farming lighting for your crops is critical. 

Heating, Ventilation and Air Conditioning (HVAC)

Controlling the heating, ventilation, and air conditioning is crucial in managing a vertical farm. Remember, the HVAC can influence the yield, health, and quality of your crops. Smart regulating systems are crucial for the management and maintenance of ventilation, temperature, and humidity. Installing smart enabled HVAC systems that can be incorporated into a general control system is critical.

Nutrients

Controlled environment agriculture allows farmers to regulate the frequency, levels, and nutrients they use on the crops. Commercial nutrient mixes are not only readily available but are also easy to use for your vertical farm. However, you can improve the quality of your crops and increase production with a crop-specific nutrient mix. Research and knowledge help you produce efficient nutrient mixtures for your vertical farm. 

Control Systems

Control systems audit, and manage all elements of a controlled environment. Doing so allows the farmer to make proper decisions for crop-specific growing conditions. Advanced control systems give farmers crucial data on crop health, development, and the environment. 

With this data, the farmer can develop different features of the growing conditions. Further, control systems facilitate the implementation of nutrient mixes and light that can change throughout growing, light intensity, and delivery of supplementary C02 (carbon dioxide). 

Future vertical farms should come with integrated control systems and inline crop monitoring systems to facilitate disease management. These components will help boost conditions, enhance energy-efficiency, and increase yield. 

Growing Systems

Vertical farming involves various hydroponic systems, making soil and other growing media unnecessary. Farmers can use different substrates, as seen below. 

  • NTF (Nutrient Film Technique)

The NTF comprises narrow troughs or channels where flowing small amounts of nutrient and water solution drains to the bottom of the troughs. This process creates a thin film. Plants are hanged over the trough in net containers. They receive small amounts of the nutrient solution often per day. 

The fine nutrient film solution facilitates watering of the rear of the roots without getting soaked. The top part of the roots stays dry and consumes oxygen. The nutrient film technique is ideal for baby greens, salads, leaves, strawberries, and herbs. 

  • Flood and Ebb System

The flood and ebb system is also known as drain and flood. It involves the use of trays filled with a nutrient solution for a few minutes before the water drains. The plant roots are swayed around the nutrient solution. Using flood like circumstances allows the plants to consume nutrients and oxygen, making them healthy and strong. The flood and ebb system is ideal for producing microgreens. 

Finally

Vertical farming allows farmers to grow crops throughout the year, and this facilitates maximum crop production. This technology does not rely on the weather. You can grow your crops with the help of LED lighting. Apart from being eco-friendly, vertical farming allows you to farm within limited spaces, as is the case in cities. 

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Combining Hydroponic And Aeroponic In Vertical Farming

Growers are finding new ways to drive the efficiency up and the cost down, and one of these solutions is vertical farming.

Generally speaking, horticulture operations can be quite expensive to operate; yet, growers can rely on hundreds of years of knowledge to improve the efficiency, so that those costs go down. At the same time, indoor farming cannot rely on such knowledge, and it is not uncommon to see cultivation facilities with huge bills at the end of the month. As the industry matures, growers are finding new ways to drive the efficiency up and the cost down, and one of these solutions is vertical farming.

Screen Shot 2021-01-26 at 11.38.38 AM.png

LED technology

Nowadays, LED technology has made a huge leap forward, and Alvis Ma, the CEO of GrowSpec claims they are the industry standard. “Growers generally make the switch from HPS to LED for three reasons: increased yield, improved cannabinoid, and terpene content, and energy efficiency,” he explains. Thus, LEDs allow for vertical cultivation, which has a host of benefits, especially when it comes to space optimization.

“The VetriAero Planter system uses a mobile planting rack that reduces the ‘required’ indoor grow space area and extends the plant cultivation space by multiple tiers, maximizing growth space, increasing the yield and thus the profit,” Alvis Ma points out. “And if a grower wants to use one rack only initially, other tiers can be added later on: the helves can be connected to one another so that growers can modify the VetriAero Planter system length according to the size of the room.”

Grow Spec-1.jpg

A very peculiar feature of this system is the integration of both aeroponic and hydroponic methods. “Instead of growing in soil, the roots are suspended in mid-air and surrounded by oxygen,” he adds. “The plant roots get misted directly with a nutrient-dense solution that gets sprayed to the roots every 3-5 minutes. At the same time, the remaining liquid at the bottom of our container ensures that, in the event of an emergency, there is still enough nutrient-dense liquid to sustain your plants for up to 48 hours.”

“Commercial indoor cultivation operations can be very expensive,” says Alvis Ma with GrowSpec. “And if you look at the cost of the real estate, added on top of substantial

power bills and staffing requirements, it becomes critical to find a way to increase profit and reduce overhead costs.” Exactly to respond to such a demand, GrowSpec has developed the VertiAero Planter system, a new vertical growing system. “One of the primary reasons why vertical farming is so attractive for growers is the improved performance of current LEDs,” Alvis Ma continues. “This is something that could not happen back in the day, as HPS has been the go-to lights for decades, and they produce a lot of heat; generally speaking, the plants have to be placed a couple of feet away from light to stay safe and healthy.”

Controlling the environment

Indoor growing, especially vertical growing, requires a particularly efficient airflow system to guarantee healthy growth for the plants. This has direct consequences on the growing environment. “Maintaining optimum temperature, humidity, and air circulation is challenging for all cannabis operations,” Alvis Ma remarks. “But in vertical growing, there is even more variability in macro and micro environmental conditions, because more plants make control more difficult.

That’s why the GrowSpec VertiAero’s multi-layer airflow solution improves the airflow rate in the micro-environment of the plant canopy by maintaining consistent plant canopy temperature and humidity, reducing the cultivation potential of harmful pathogens, and increasing the rate of photosynthesis by evenly distributing CO2 over the plant canopy. The system utilizes various sensors to detect crucial data points such as moisture change, for instance.”

Although such a system might sound complicated to use, user-friendliness and easiness of use are very well implemented. “The VertiAero Planter system integrates intelligent control and touchscreen control system so that your business can save up exponentially on overhead costs,” Alvis Ma points out. “At our core, we operate according to the highest standard, combining this with technology that respects our planet.”

For more information:

GrowSpec

Yuxin Industry Zone, Shishan Town, Nanhai, Foshan, Guangdong, China

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Indoor Agtech, Vertical Farming, Urban Farming IGrow PreOwned Indoor Agtech, Vertical Farming, Urban Farming IGrow PreOwned

Indoor Agtech :: Innovation Summit :: iGrow News Partner Discount

By sharing best practice from around the globe, and facilitating new connections and collaborations, the summit offers an invaluable platform to develop new business and accelerate projects across the Indoor AgTech ecosystem

Hear From And Connect With International Thought Leaders Including:

Strapline: 

Connecting Technology & Business to Create Healthy, Resilient Food Systems

Mission Statement

The Indoor AgTech Innovation Summit is going virtual!  This year’s summit will be live online on July 23, 2020, providing an essential opportunity for the industry to meet, network, and exchange ideas at this critical time for our industry.

The world’s leading farm operators, food retailers, and investors will present live, before hosting virtual discussion groups on the emerging trends and technologies that will shape your business as we emerge from the current crisis into a redesigned food system:

Key Themes:

  • Finding Growth in Crisis: Responding to a Rapidly Changing Food Landscape

  • Scaling Up: Co-locating Food Production and Distribution Centers

  • Enhancing Nutritional Value: Towards a Perfect Plant Recipe

  • Optimizing Seeds for Indoor Agriculture: Breeding a Competitive Advantage

  • Analytics and the Cloud: Digital Integration to Optimize Indoor Agriculture

  • Robotics: Developing a Contactless Food System

  • Energy Consumption: Driving Efficiency and Economic Viability

  • Financing Growth: Can Capital Keep Pace with Industry Demand?

  • Consumer Awareness: How to Build a “Holistic” Indoor Brand

All participants can schedule video 1-1 meetings with potential partners and clients throughout the summit, and for an extended period before and after the sessions.

By sharing best practice from around the globe, and facilitating new connections and collaborations, the summit offers an invaluable platform to develop new business and accelerate projects across the Indoor AgTech ecosystem.

We Are Proud To Be A Marketing Partner For Indoor AgTech
Save 10% With Our Discount Code UAN10

Summit website: https://indooragtechnyc.com/

Registration:

  • One summit pass Indoor AgTech: $195.00

  • Start-Up pass: $95.00 / Please contact alexander@rethinkevents.com to enquire about the criteria to qualify for special rates.

https://indooragtechnyc.com/register/

Thursday, July 23rd, 2020

10:00 a.m. to 4:00 p.m.

© 2020 Rethink Events Ltd

THANKS TO OUR PARTNERS

Platinum Partner:


Silver Partner: 

Marketing and Media Partners: 

Food Production Will Be Part of

Daily Urban Life Again!

iGrow.News, partner of indoor agtech innovation summit, wishes you an unforgettable event

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