Green Sense Farms to Expand Its Vertical Farming Operations In The U.S. and China
Green Sense Farms to Expand Its Vertical Farming Operations In The U.S. and China
OCTOBER 24, 2017 URBAN AG NEWS
Originally published in Issue 13, April 2016
To meet the increasing demand for clean, safe produce in both the U.S. and China, Green Sense Farms looks to open additional vertical farming operations along with a training facility to create job-ready graduates to grow in controlled environments.
Robert Colangelo, founding farmer and CEO at Green Sense Farms, in Portage, Ind., knows what it takes to be successful in emerging markets.
“I have been very fortuitous in my career,” Colangelo said. “I have been at the forefront of three emerging markets. In the 1990s I operated one of the first companies in the Soviet Union and rode that wave of democratization and privatization of state-owned Russian businesses.
“I was at the forefront of the brownfield industry. Redeveloping contaminated properties, repositioning them for new and productive use. And now I have been lucky to be at the forefront of the emerging vertical farming market.”
Colangelo said all of the new markets he has been involved with have very similar patterns.
“They all require tenacity as the early phase of the market ebbs and flows until it reaches a critical mass,” he said. “They require flexibility and the ability to manage technology. It’s the culmination of my previous experiences that have allowed me to have a diverse amount of skills required to make vertical farming work. This is probably one of the more complex ventures I have ever undertaken, but I love it. I also have a great partner, Carl Wenz, who is a CPA and has complementary skills to mine.
“To be successful in vertical farming, you really have to understand the produce business, have a good understanding of fundamental business operations and be able to integrate many different technologies into a working system. You have to understand plant physiology, packing and post-harvest processes. And you have to have marketing and sales skills and be able to raise capital. That is a unique skill set for one person and requires an experienced team. If you’re not good at all of those areas of expertise, then you’re going to have a real challenge succeeding in the vertical farming market.”
Starting out with “big” partners
Even though Green Sense Farms has only been producing crops since 2014, the company was formed in 2012 and has been doing research and development since 2009. The company’s vertical farm operation is located in a 120,000-square-foot industrial warehouse building. It leases 20,000 square feet in a multi-tenant building.
“We have two grow rooms,” Colangelo said. “Each room measures 60- by 60- by 25-feet tall. One room is dedicated to lettuce. It has nine vertical towers that are 14 levels high. The second room has seven towers with 10 levels in which we produce baby greens, including kale, arugula, bok choy, watercress, upland cress and culinary herbs. About 80 percent of the product goes to grocery stores and 20 percent goes to produce companies, which service restaurants and institutions.”
Colangelo said in order for his company to be a major player in the vertical farming industry required picking “big” partners.
“We looked at lighting and picked a lighting partner,” he said. “This allowed us to focus on building the best vertical farm and our lighting partner can provide us with constant R&D on LED lights. We picked a fertigation partner that could take a well-defined fertigator from the greenhouse industry and customize and tweak it so that it would work in an indoor vertical farm and create the automation controls that link all the different systems together. We formed a partnership with a climate control company so that we just don’t treat our air and filter it and cool it, but we also adjust the humidity because plants transpire and put a lot of moisture in the air. Lastly, we are working with a seed company that together with our LED company can breed non-GMO seeds that grow best under LED lights in indoor controlled environments. This enables us to not only maximize our yields, but through using the right seed with the right LED light recipe, we can double our yields and productivity. This is complex stuff and you have to pay attention to the details. And you have to be at a scale that is big enough to make this economical.”
Expansion in the U.S.
Green Sense Farms is in the process of building additional farms in the U.S.
“We have formed a partnership with Ivy Tech Community College in South Bend, Ind., to build a hands-on training center on the campus,” Colangelo said. “This will be a working commercial farm.
“One of the challenges in this industry is that there are not enough trained people. So we are creating our own “farm team” to mine talent. The training center will be similar to McDonald’s Hamburger U. in Oak Brook, Ill. We plan to train 15 students every six months. At the end of the six months the students are job-ready to work in the ag industry and to also work in vertical farms. We call it “earn to learn.” The students will be paid to work at the farm. This facility will be larger than the one we are operating in Portage.”
Green Sense Farms produces lettuce, baby greens, including kale, arugula, bok choy, watercress, upland cress, and culinary herbs. About 80 percent of the product goes to grocery stores and 20 percent goes to produce companies, which service restaurants and institutions.
Green Sense Farms is also in discussion to put a vertical farm at distribution centers in the Indianapolis area operated by grocery store chains.
“Our goal is to blanket the Midwest,” Colangelo said. “Our strategy is to put these vertical farms at the points of consumption and distribution. We are planning to build farms at perishable food distribution centers and at institutional campuses, including hospitals, colleges, corporate campuses and military bases.
“After Chicago, Indianapolis is the next up-and-coming Midwest city. There is a great food scene. It is also an entrance to the South. The Midwest is a good location because of its short growing season and its cold winters. With the vertical farms we can grow indoors 24/7 and harvest 365 days a year.”
Expansion in China
At the same time that Green Sense Farms is expanding its vertical farms in the U.S., it is also building a network of farms in China. The company’s goal is to build 100 farms in China with its local operating partner Star Global Agriculture. It began work on its first China facility in March 2015. Located in the city of Shenzhen, the vertical farm is expected to start growing produce in June.
“Shenzhen is located right across the border from Hong Kong,” Colangelo said. “There are 48 million people within 50 miles of our farm. Our plan is to build 10 farms in the city in the next 24 months. They would serve Hong Kong and Macau, which is considered the Las Vegas of the East.
“China has 1.4 billion people. The country is transforming from a manufacturing economy into the largest consumer economy. In a very short time China is going to have incredible buying power. As a middle class emerges, Chinese consumers are demanding higher quality food.”
Colangelo said China’s transformation over the last 25 years into one of largest industrial manufacturing economies ate up a lot of farm land and produced heavy pollution.
“A lot of the food supply has been affected by the industrialization,” he said. “There is heavy air pollution, ground water has been contaminated in the large cities and there are terrible traffic jams. Putting vertical farms in the cities close to the people reduces congestion, controls the cleanliness of the food, and supplies emerging markets that want to eat healthy, fresh greens.
“There is a tremendous amount of capital available. In China there aren’t as many rules and regulations as we have had to deal with in the states so we can move much more quickly. Even though we started in the U.S. and we will continue to build our network here, with the availability of capital and less regulations to deal with in China, we feel that we can build a network of farms much more rapidly there.”
Colangelo said the company’s goal in China is to pioneer the lettuce market.
“We know there is an emerging lettuce market. We feel that we can dominate that,” he said “But we also know that we have to grow different greens for the Chinese palette. Some of the crops include Chinese onions, baby bok choy and mustard greens. Some of the herbs will also be different such as coriander.”
Colangelo said with China’s population the potential market is immense.
“Initially we will put as many farms as we can in Shenzhen,” he said. “Then we’ll blanket Shanghai, Beijing and Chengdu. Those cities have large population centers (20 million plus) where we can build a circle of farms around the cities.
“The traffic congestion is so bad in China that it would be better to build smaller farms closer to consumers. Even in a small area it takes a long time to go a short distance during rush hour. It’s better to have several small farms then to have a big farm in a central location.”
The future of vertical farming
Colangelo said the indoor vertical farming market in the U.S. is a rapidly emerging market.
“There are a lot people rushing into vertical farming either because they see it as a way to stop world hunger, as a lifestyle change or they see it as a responsible and sustainable way to grow,” he said. “All those things are great. Vertical farming can help those things, but it is not a panacea.”
He said vertical farming has raised the bar for sustainable farming.
“You are seeing some field farmers becoming much more sustainable, as they use precision farming techniques to conserve water, fertilizer and pesticides,” he said. “Greenhouse growers are also becoming much more responsible on how they minimize water and fertilizer use.
“Each of those methods of farming are targeted to grow different crop types better. Field farming is fantastic for commodity crops like corn, wheat and soybeans. Greenhouses are great for tomatoes, cucumbers and peppers. Vertical farming is a great way to grow leafy greens. Vertical farming really takes a skilled practitioner with a good management team, a good understanding of the produce business and good understanding of controlled environment agriculture and patient capital.”
Colangelo sees more people rushing into vertical farming which will result in a high failure rate.
“I expect that eventually a few companies will emerge in the long run that will be large scale companies,” he said. “Internationally I see vertical farming growing in constrained markets where produce travels great distances. There is either a lack of water, a lack of land or heavy pollution that drive the creation of farms.”
Colangelo said the vertical farming market is rapidly expanding at the same time it is maturing quickly.
“When I started in this industry in 2009, it was a cottage industry,” he said. “Today you really need to bring your A team to start a vertical farm. You have to have a strong management team. You have to be well capitalized. You have to be strategically focused with a cogent business plan. You have to have an experienced growing team in place. You have to have a good command of the technology that’s ever changing. And you have to be willing to constantly innovate and be agnostic towards your current technology.
“Our first grow room is going on three years old and it’s already a museum. We have already retrofitted it with new technology. We have farm designs that go way beyond where we’re at now and we’re just getting started. The only constant in life is change, either be the catalyst for change, be changed or die.”