The Business Of Vertical Farming: What It Is And What It Isn’t

“Vertical farming is a tremendous opportunity,” says Glenn Behrman, founder and President of CEA Advisors, consultants and advisors to the global vertical farming industry and a 50-year veteran of the horticulture industry. It’s definitely the future of agriculture but it’s also an opportunity for people to choose where they fit in and where they can make their most meaningful and important contribution”.

Over the years, CEA Advisors has provided services for the development of indoor farming projects locally and internationally. They’ve worked on projects for growers, investors, universities, schools, food processors, vertical farm developers, pharmaceutical manufacturers and government agencies.  

Fundraising business model
According to Glenn, many people enter the market without really doing their homework. They want to be in vertical farming, but they don’t know that there are many different industry entry points that are available that can really satisfy their interests. No questions are asked, no networking is done, and they do not drill down to a deeper level to see where their interest really is.

“Today, I see that many are only motivated with raising money but funding is not a business model. If money is your main motivation, you’re probably going to fail. There’s too much of a focus on raising money and not enough focus on making money. I believe a business should be cash flow positive, but we also need to be innovating and improving, not marketing concept systems to investors. New growers should first consider where they can make a difference in the market," says Glenn. 

‘Go out there and start networking’
This highlights another big issue with vertical farming. According to Glenn, people don’t realize the relationship between the start-up vertical farmer and end-user, which is unbelievably important but fragile at the same time. A new farm cannot expect for institutional buyers to place orders just because they exist. When wanting to sell to retailers, Glenn says that it’s very unlikely for them to switch suppliers after being in business with them for many years. “Many growers overestimate their marketing capabilities because they don’t think the whole operational process out. The same problem with receivables, make sure you put away enough money to finance your receivables."

Glenn Behrmann

Glenn advises starting growers to first get involved with vertical farming by doing a lot of research. “Meaning, not only on the internet but go out there and talk to growers, visit farms, talk to produce buyers, restaurants and other end-users and get to know the industry. Get out in the field, visit trade shows, they’re thought-provoking, get active and do some networking. I also advise people to become a part of farming, grow things at home and get a better idea of what it’s all about. Then start focusing on the systems, machinery and equipment. But remember all growers need to look at the end result: the product.

Finding a balance
Every component, says Glenn, from seeds to sales involves many different processes. Every single process, every single link in the chain has room for improvement. “There are discussions about achieving a maximum yield in a sustainable manner. What isn’t realized is that maximum yield doesn’t only mean how much basil is grown in a specific time period, but it also dictates how less input should generate more output. Costs that are not controlled can render the most innovative system completely unsustainable.  

It’s like an Excel spreadsheet, says Glenn. “Take every variable that goes into growing a crop, then continue to tweak, improve and change. At some point growers need to come up with the optimum result.” Glenn says that some might have the right component but not be in balance. Therefore, growers need to be always aware of all processes and keep them in balance. Too much light, too little light, wrong PH, bad air circulation, wrong fertilizer mix, high labor costs, wrong crop, humidity too high or too low? All need to be in balance to achieve success.  

Don’t be afraid to ask
Glenn has more than 50 years of industry experience with a broad view of the market. “I don’t let myself get stuck in a corner, because I’m not afraid to ask when I don’t know or I’m not sure. During my early career in the foliage business, I asked a million questions, I watched how things were done, I took advice, I was like a sponge soaking up knowledge from those that came before me. Although I’ve been laser-focused on Vertical Farming for the past ten years, my attitude about acquiring knowledge hasn’t changed. Be curious and ask a lot of questions!"

“Nowadays, I see a lack of curiosity and a lot of over-confidence. Vertical farming needs to be taken one step at a time, meaning you cannot graduate college on the first day of high school, it’s a journey. Going into business is a risk and then there are more risks every day. Growers need to evaluate where they want to be in this equation. Nobody today promotes their vertical farming project as an R&D opportunity, but rather as the game-changing food supply of the future. The truth is with a technology that is constantly evolving, every single vertical farm operating today is still a work in progress."

Inside the Growtainer® 

In addition to consulting and advising vertical farming CEA Advisors designs and builds custom Growtainers. “Each build is always interesting and challenging as they’re always built for a specific unique use and objective,” Glenn states. “I don’t believe that one size fits all in container farming and I don’t believe that plants were meant to grow sideways.

However, it is obvious that technology is constantly evolving and improving and each Growtainer must always provide what the end-user needs, whether it is for research or food production etc. Every unit must always be optimized. But Growtainers are technology-based and the end-user is always the most important part of the equation. And whether production takes place in a Growtainer or a Vertical Farm, it is always about balance.

For more information:
CEA Advisors LLC
Glenn Behrman, Founder and President 
gb@cea-advisors.com
www.cea-advisors.com 

Author: Rebekka Boekhout
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