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US: Vacant For Five Years, A Former Target in Calumet City Gets New Life As An Indoor Vertical Farm Growing Greens For The Chicago Area
The 135,000-square-foot building in the River Oaks shopping center will house stacks of trays growing kale, arugula and other leafy greens under artificial lights. A retail shop on-site will sell the produce to the community and invite people in to learn about how indoor farming works
CHICAGO TRIBUNE | JUL 15, 2020
Jake Counne, founder of Wilder Fields, is seen July 14, 2020, inside an empty Target he plans to convert to an indoor farm, in Calumet City. (Brian Cassella / Chicago Tribune)
A former Target that’s been sitting vacant in Calumet City for five years will be reborn as an indoor vertical farm producing locally grown greens for the Chicago area.
The 135,000-square-foot building in the River Oaks shopping center will house stacks of trays growing kale, arugula and other leafy greens under artificial lights. A retail shop on-site will sell the produce to the community and invite people in to learn about how indoor farming works.
Once at full capacity, Wilder Fields will employ 80 people and produce 25 million heads of lettuce a year that will be available in grocery stores across the region, said founder Jake Counne. Wilder Fields is the new name of the company, which previously was called Backyard Fresh Farms.
The property was exactly what Counne envisioned when he set out to repurpose existing buildings as indoor farms to supply fresh produce to cities far from the growing fields of California and Arizona.
An empty Target that Jake Counne, founder of Wilder Fields, plans to convert to an indoor farm in Calumet City. (Brian Cassella / Chicago Tribune)
As retail giants close stores, a trend that’s been exacerbated by the COVID-19 pandemic, Counne hopes to put the buildings they leave behind to sustainable use.
“We think this is very repeatable,” said Counne, who was a real estate investor before he became an agricultural entrepreneur. “There is a huge amount of vacant anchor retail space.”
Calumet City, which borders Chicago’s southern edge, acquired the building from Target and will lease it to Wilder Fields for 12 months, Counne said. After that, he plans to purchase the property from the city.
Counne expects to break ground by the end of this year and have the first phase of the redevelopment completed by early next year. After operating at a smaller scale to work out the kinks, Counne plans to finish developing the site by 2023. A group of investors is funding the first phase of the project. He declined to say how much funding he has received.
Produce grown locally indoors has gained popularity with consumers in recent years for environmental and quality reasons. It uses less land and water than traditional agriculture and travels far shorter distances, so the product is fresher and lasts longer when it gets into consumers’ hands. Growing year-round in controlled environments also cuts down on waste and contamination and avoids the challenges of unpredictable weather.
The Chicago area is home to several greenhouses that sell greens commercially, including Gotham Greens in Chicago’s Pullman neighborhood and BrightFarms in Rochelle, both of which have recently expanded. But vertical farms, which use artificial light rather than sunlight, have struggled to succeed at a large scale.
Counne believes he can make it profitable with lower-cost automation, which he has been testing at a small pilot facility at The Plant, a food business incubator in Chicago’s Back of the Yards neighborhood.
He’s developed robotics to reduce the amount of time workers spend climbing ladders to tend to plants. For example, an automated lift collects trays of ready plants and brings them to an assembly line of workers for harvest. He’s also developed a system of cameras and artificial intelligence software that prompts the environment to automatically adjust to optimize growing conditions.
Jake Counne, founder of Wilder Fields, on July 14, 2020. (Brian Cassella / Chicago Tribune)
Wilder Fields’ pricing will be in line with greenhouse-grown lettuces, which typically retail at $2.99 to $3.99 for a clamshell.
Though its first products will be standards like spring mix, spinach and basil, the plan is to also sell more unique varieties that people may not have tasted before. Among those Counne tested during his pilot were spicy wasabi arugula, tart red sorrel and horseradish-tinged red mizuna.
Counne is proud that his first farm is bringing fresh vegetables and jobs to an area that needs both. Parts of Calumet City are in a food desert.
Counne will be hiring for a variety of positions, from harvesters to software engineers to executives. He plans to implement a training program that will allow people to move from entry-level roles to positions managing the computer algorithms.
Alexia Elejalde-Ruiz
Alexia Elejalde-Ruiz covers the food industry for the Chicago Tribune's business section. Prior beats include workplace issues, the retail sector and lifestyle features, plus stints at RedEye, the Daily Herald and the City News Service. Alexia grew up in Washington, D.C., and has her degree in international relations from Brown University.
Last Chance For Tickets! - Pioneering Forum For Sustainability In Agriculture
SDLN: The Leading AgTech Networking Forum | Connecting Global High-Level Value-Chain Leaders In Miami, Oct 22 - 24
International scientists, investors, directors, and advisors come together to share global initiatives and spur innovation.
(Miami, Fl., October) - This month’s Sustainability & Digitalization Leaders forum is the exclusive, comprehensive conversation every thought leader in agtech should be a part of. The SDL agenda demonstrates critical awareness of the most relevant sustainability issues across the agtech landscape, from regenerative agriculture to carbon sequestration and soil health; responsibly investing in the latest innovations to ensuring a traceable, transparent food system for consumers.
The Miami forum, 22-24 October, also sees the introduction of breakout workshops tackling issues in a collaborative, discussion-based format led by industry seniors. Delegates will be invited to drop in on the 30-minute sessions and engage with topics such as global warming in relation to food systems, and corporate strategy for urban agriculture.
Alongside SDL speakers including Wells Fargo, Rabobank, AeroFarms and Microsoft, the next round of international thought leaders have been confirmed:
Claire Kinlaw - Director Innovation & Commercialization, Donald Danforth Plant Science Center
Andy Knepp - VP, Environmental Strategy & Industry Activation, Bayer Crop Science Cristina Rohr - Vice President, S 2G Ventures
Kenneth Zuckerberg - Senior Partner, Carlan Advisors
Wayne Honeycutt - President & CEO, Soil Health Institute
Pipa Elias - Director of Agriculture North America, The Nature Conservancy Erica Riel-Carden - Principal, Global Capital Markets
Paco Vélez - President & CEO, Feeding South Florida
Kasper Vesth - General Manager USA, The Meatless Farm Co.
Chiara Cecchini - Executive Director, Future Food Americas
For a full list of speakers visit: https://www.sdleaders.com/speakers
Occupancy for the forum is near capacity and organizers urge attendees to secure their ticket before registration closes.
For more information on SDL and to purchase tickets visit: https://www.sdleaders.com/
About Sustainability & Digitalization Leaders
SDL is a series of events that address our planet’s most pressing issues, bringing together the decision-makers who directly impact global change and can implement the necessary strategies to move the conversation forward.
A core advisory board oversees and advises on partnerships. For enquiries please email lyndsey@sdleaders.com.
About Keynote
Hosting international events since 2012 across Europe, North America and the Middle East, Keynote has curated forums for emerging technology industries, launching high profile fintech projects and acting as a platform to raise significant funds, connecting and enabling companies to reach their potential.
For more information about Keynote’s upcoming conferences visit
www.keynote.ae
For media partnership enquiries: moe@sdleaders.com
For partner and sponsorship enquiries: amy@sdleaders.com
SDLN: The Leading AgTech Networking Forum | Connecting Global High-Level Value-Chain Leaders In Miami, Oct 22 - 24
MIAMI, FL – Keynote, a global leading event company for emerging technology, announced today the Company’s next strategic decision to expand into the AgriTech industry through a new event: Sustainability and Digitalization Leadership Network (SDLN) - Miami Forum.
SDL Miami Speakers
The 2019 SDLN Miami Forum connects AgriTech’s investors with innovators and their ideas, moving the most critical conversations forward to improve the planet’s future in sustainable agriculture and emerging tech. SDLN is dedicated to addressing today’s food supply challenges by creating a platform for collaborative, open dialogue and high- level networking between industry experts from across the globe.
The three-day event at the James L Knight Center in downtown Miami will cater to AgTech seniors with an international attendance of company executives, investors and market consultants. Alongside presentations covering current world projects and tech advances, the forum will feature panels focusing on innovation vs implementation, long term sustainability and investment in the food ecosystem. This carefully curated agenda will feature entrepreneurs and established investors alongside agriculture’s international leaders, intended to provide strategic, tactical skills and knowledge for those attending.
SEE FULL SCHEDULE
As a hub connecting agriculture across the Americas and beyond, Miami sets the stage for the rapidly expanding industry. Attendees will meet with innovators throughout the supply chain at the SDLN Official Launch, Wednesday 22nd October, as well as a second evening of networking on Thursday 23rd. Further opportunities for breakout sessions led by industry heads, facilitated networking and 1:1 business meetings will follow.
The first round of presenters announced last week includes Howard Yana Shapiro, Chief Agricultural Officer at Mars; Claudia Rössler, Agriculture Strategic Partnerships at Microsoft; David Friedman, CEO at VividGro.
A core advisory board will oversee and advise on partnerships to ensure quality of connections and sustainable business strategy. For enquiries please email lyndsey@sdlnetwork.com
About Keynote:
Hosting international events since 2012 across Europe, North America and the Middle East, Keynote has curated forums for emerging technology industries, launching high profile fintech projects and acting as a platform to raise significant funds, connecting and enabling companies to reach their potential.
Event Website: https://sdlnetwork.com/
For media partnership enquiries: amandah@sdlnetwork.com
For partner and sponsorship enquiries: amy@sdlnetwork.com
Sustainability In Agriculture’s Pioneering Forum
International Professionals Leading The Agtech Supply Chain Come
Together To Share Initiatives And Spur Innovation
September 3, 2019
(Miami, Fl., October) - The 2019 Sustainability & Digitalization Leaders forum is fast becoming the exclusive conversation series every thought leader in agtech should be a part of. Announcing the next cohort of speakers to present this October 22-24, the agenda demonstrates an awareness of the most relevant sustainability issues across the current landscape, from land degradation to carbon sequestering; cell cultured meats to regenerative urban food systems.
Featured presentations from global innovators include: impact and long term predictability of extreme weather patterns; regenerative practice of soil and land masses; the role and security of ground level farmers in a fast moving agricultural landscape. As companies continue to develop at the intersection of agriculture and emerging innovation, harnessing and deploying new technologies sustainably remains a roadblock.
Alongside SDL speakers including Mars, Rabobank, AeroFarms and Microsoft, the next round of international thought leaders have been confirmed:
Adam Bergman - SVP, Head of AgTech Practice, Wells Fargo Jasmine Crowe - CEO, G oodr
Ed Smith - Head of Indigo Carbon, Indigo
Lloyd Day - Deputy Director General, IICA
Kraig Westerbeek - Senior Director, S mithfield Renewables
Ingrid Fung - Investment Associate, Finistere Ventures
Kevin Krueger - Procurement & Sustainability, St Jude Children’s Research Hospital Michelle Adelman - CEO, Infinite Foods
For a full list of speakers visit: https://www.sdleaders.com/speakers
Occupancy for the event is limited and organizers urge attendees to secure their registration.
For more information on SDL or to purchase tickets visit: https://www.sdleaders.com/
About Sustainability & Digitalization Leaders
SDL is a program of events that address our planet’s most pressing issues, bringing together the decision makers who directly impact global change and can implement the necessary strategies to move the conversation forward.
A core advisory board oversees and advises on partnerships. For enquiries please email lyndsey@sdleaders.com.
About Keynote
Hosting international events since 2012 across Europe, North America and the Middle East, Keynote has curated forums for emerging technology industries, launching high profile fintech projects and acting as a platform to raise significant funds, connecting and enabling companies to reach their potential.
For more information about Keynote’s upcoming conferences visit
www.keynote.ae
For media partnership enquiries: moe@sdleaders.com
For partner and sponsorship enquiries: amy@sdleaders.com
Growing Up: Inside Infarm’s Plans To Feed The World
It is projected that by 2050 two-thirds of humanity – or 6.5 billion people – will be living in urban spaces. The challenge will be building and managing urban spaces to sustain such a massive population. In theory, industrial agricultural produces enough food to feed the world as a whole, but the current model is unsustainable
September 3, 2019
Infarm founders Osnat Michaelli and Erez and Guy Galonska
Editor’s note: This is the first installment of a series focusing on social impact startups. Stay tuned for more.
It is projected that by 2050 two-thirds of humanity – or 6.5 billion people – will be living in urban spaces. The challenge will be building and managing urban spaces to sustain such a massive population. In theory, industrial agricultural produces enough food to feed the world as a whole, but the current model is unsustainable.
Large-scale agriculture has led to deforestation on a mass scale – as we are currently seeing in the Amazon – along with soil degradation, water waste, and plant diseases that require the use of pesticides (and are constantly mutating). Moreover, due to energy use and lengthy transportation routes, the CO2 footprint of food currently represents 17% of total global emissions. Climate change will, in turn, have an increasing impact on agriculture – with changes in rainfall, rising temperatures, an increase in pests, and extreme events such as heatwaves, droughts, storms, and floods affecting our ability to provide food for a growing global population.
These challenges have been the driving force behind the global agtech movement. For two straight years, agtech startups have received $2 billion in funding and 2019 is set to be another banner year for agtech.
Leading the pack in Europe is Berlin-based agtech startup Infarm, which recently closed an €88 million Series B investment led by Atomico.
From concept to reality
Founded in 2013 by Osnat Michaelli and brothers Erez and Guy Galonska, Infarm pioneered putting ‘indoor vertical farms’ in city locations such as supermarkets, shopping malls, restaurants, schools, hospitals and similar spaces where the produce can directly reach the end customer.
“My two co-founders and I came together around the idea that being close to the land and particularly its produce is vital to our health and creativity as a society. And from the beginning we began to explore – through travel, growing and experimentation – ways to bring natural vitality of the local farm into the city and the freshness and flavour back into our lives,” explained Infarm CEO and co-founder Erez Galonska.
“We also realised that our current food system’s biggest deficiency is that it is too far removed from the people it is trying to feed. At infarm, rather than asking ourselves how to fix these deficiencies in the current supply chain, we looked to redefining the entire chain from start to finish; Instead of building large-scale farms outside of the city, optimising on a specific yield, and then distributing the produce, we decided it would be more effective to distribute the farms themselves throughout the city.
“In 2013 we converted a 1955 Airstream trailer into our first vertical farm in one of Berlin’s most well-known urban farm spaces, ‘Prinzessinengarten’. This trailer became a hub for our early experimentation, where visitors could harvest herbs and microgreens and we could welcome a vibrant community of urban planners, designers, food activists, bio-dynamic farmers, architects, chefs, biologists, and hackers to explore the diverse challenges behind making urban farming a reality. This research station and lab would form the beginnings of what we today call Infarm.”
Today, ‘infarms’ can be stacked to fit any space and size, and are designed to easily plug into the city’s existing infrastructure. Infarm controls the farms remotely using sensors and a centralised, cloud-based platform that adjusts and improves itself continuously, so each plant grows better than the one before – providing plant seedlings with an ideal combination of light spectrums, temperature, pH, and nutrients for optimal growth.
The concept was further refined with inputs from biologists and cooks. The startup’s farms use no pesticides, 95% less water than traditional farms, and reduce transportation by 90%. Infarm’s largest module can grow up to 680,000 plants each year on only 25 square metres, making it 420x more efficient than soil-based agriculture.
In 2016, Infarm received a grant of €2 million from Horizon 2020, Europe’s biggest research and innovation programme. The grant was awarded on the basis of Infarm providing sustainable agriculture using hydroponics, proprietary lighting algorithms combined with indoor vertical farming, along with its patented modular ‘growth trays’ to create an incredibly efficient growing environment. The same year Infarm partnered with Metro Group, one of Europe’s biggest wholesalers, and in 2017, the startup received an early VC investment of €4 million.
2018 was a banner year for Infarm – both in terms of increased presence and funding. It secured a partnership with supermarket chains EDEKA and REWE in addition to partnering with several restaurants including Tim Raue and Good Bank. It also raised a Series A funding round of €20 million led by Balderton Capital. By mid-2018, Infarm was present in more than 50 customer-facing locations and launched its first Infarm in France via Metro Nanterre in November 2018.
Infarm has been rapidly growing and scaling since, and with its impressive €88 million round. Today, Infarm has over 200 in-store farms, over 150 farms in distribution centres and harvests more than 150,000 plants every month. In addition to its early partners Metro and Edeka, Infarm has partnered with major food retailers including Migros, Casino, Intermarche, Auchan, Selgros, and Amazon Fresh in Germany, Switzerland, and France.
Infarm’s team has grown from 40 people in 2016, to 150 in 2018, and the startup now employs over 250 people in several locations across Germany, as well as in Denmark, France, Switzerland, UK, and the US.
Today the total market for fruit and vegetables is €2.2 trillion worldwide, with an average of 10 kilos of salad per year, per person. This market is expected to grow to €5 trillion by 2030 as people’s diets are shifting to healthier and fresher food.
With this growing market size, Infarm sees a great opportunity for expansion while filling a societal need. The startup is planning to land in the UK this month, and is setting its sights on foreign markets; the startup is already in advanced discussions with retailers in the US and Japan. Its ultimate vision is to feed the 10 billion people living in urban centers by 2050.
Agriculture-as-a-Service
What makes Infarm attractive to supermarkets and other similar establishments is its ‘Agriculture-as-a-Service’ business model. The modular ‘farms’ themselves remain the property of Infarm, which receives income per harvested plant. Infarm coordinates with retailers and takes care of the farm including installation, cultivation, harvesting, and maintenance. Its farm unit becomes part of the retailer’s vegetable department. Aside from the regular visits by a service personnel to plant new plants, the farms are controlled remotely. This modular, data-driven and distributed approach — a combination of big data, IoT, and cloud analytics — sets Infarm apart from competitors.
From a price point, Infarm is attractive for supermarkets, which get a better product at the same price. In addition, the plants, especially herbs, are harvested fresh; preserving color, smell, flavour, and nutrients.
Sustainable cities with responsible production
Before there was agtech and its cousin foodtech, it was all under one banner: agrifood tech. This vertical is now split in two: upstream or agtech is closer to the farmer, while downstream is foodtech, closer to the consumer. Infarm sits perfectly at the intersection, innovating in farming while at the same time drastically reducing or even eliminating the farm to market supply chain and bringing its produce directly to consumers. In effect, Infarm addresses two United Nations sustainable development goals: impacting both building sustainable cities (SDG #11) and communities and responsible production (SDG #12).
Infarm is redesigning the entire food supply chain from start to finish by distributing the ‘farms’; farming directly where people live and eat. It claims to be 400x more efficient than traditional agriculture.
The impact of its instore farms is best illustrated by the following numbers:
2 square metres of instore farms is equivalent to 400 square metres of traditional farmland
Only 0.5% space usage for each instore farm
95% less water than traditional agriculture
90% less transportation
75% less fertilizers, 0 pesticides
150,000+ plants per month harvested
The future of farming
Infarm’s goal for the future is to gain an even deeper understanding of the optimal conditions for plants, and for supermarkets to source all their needs for herbs from Infarm alone. With its data collected from sensors that measure and control plant growth, Infarm possess a unique plant database and may well be on track to achieving this goal.
Although experts agree that feeding a rapidly burgeoning urban population cannot be solved by vertical urban farming alone, Infarm and similar agtech startups are hailed as trailblazers. They form part of the solution, while appealing to people who care about what they eat and where it comes from.
The signs are clear that in the near future, Infarm and similar companies will become the norm and not a novelty.
Maricel Sanchez has over 10 years of experience in various fields including trading, supply chain management, logistics and manufacturing. As well as helping startups to raise funds, she is an award-winning public speaker and the current President of Toastmasters Nice, a bilingual club that promotes public speaking and leadership.
SDLN: The Leading AgTech Networking Forum | Connecting Global High-Level Value-Chain Leaders in Miami, Oct 22 - 24
7/9/2019
Press Release – Keynote, a global leading event company for emerging technology, announced today the Company’s next strategic decision to expand into the AgriTech industry through a new event: Sustainability and Digitalization Leadership Network (SDLN) - Miami Forum.
The 2019 SDLN Miami Forum connects AgriTech’s investors with innovators and their ideas, moving the most critical conversations forward to improve the planet’s future in sustainable agriculture and emerging tech. SDLN is dedicated to addressing today’s food supply challenges by creating a platform for collaborative, open dialogue and high- level networking between industry experts from across the globe.
The three-day event at the James L Knight Center in downtown Miami will cater to AgTech seniors with an international attendance of company executives, investors and market consultants. Alongside presentations covering current world projects and tech advances, the forum will feature panels focusing on innovation vs implementation, long term sustainability and investment in the food ecosystem. This carefully curated agenda will feature entrepreneurs and established investors alongside agriculture’s international leaders, intended to provide strategic, tactical skills and knowledge for those attending.
As a hub connecting agriculture across the Americas and beyond, Miami sets the stage for the rapidly expanding industry. Attendees will meet with innovators throughout the supply chain at the SDLN Official Launch, Wednesday 22nd October, as well as a second evening of networking on Thursday 23rd. Further opportunities for breakout sessions led by industry heads, facilitated networking and 1:1 business meetings will follow.
The first round of presenters announced last week includes Howard Yana Shapiro, Chief Agricultural Officer at Mars; Claudia Rössler, Agriculture Strategic Partnerships at Microsoft; David Friedman, CEO at VividGro.
A core advisory board will oversee and advise on partnerships to ensure quality of connections and sustainable business strategy. For enquiries please email lyndsey@sdlnetwork.com
About Keynote:
Hosting international events since 2012 across Europe, North America and the Middle East, Keynote has curated forums for emerging technology industries, launching high profile fintech projects and acting as a platform to raise significant funds, connecting and enabling companies to reach their potential.
Event Website: https://sdlnetwork.com/
Early bird tickets available until 1st August at sdlnetwork.com
For media partnership enquiries: amandah@sdlnetwork.com
For partner and sponsorship enquiries: amy@sdlnetwork.com
Vertical Farming Systems Raises $1M For Automated Agtech
April 30, 2019
Image via VFS
Australian agtech company Vertical Farming Systems (VFS) has raised $1 million for its automated indoor farming technology. Terms of the deal were not disclosed, although company co-owner Ashley Thompson told StartupSmart the investment comes from someone with “significant experience in the agriculture industry.”
Based in Queensland, Australia, VFS says its system can take plants from seedling stage to fully grown in just 28 days. Thompson, along with co-owner John Leslie, run the farm out of a warehouse facility divided into three climate cells, or insulated environments where computers control the lighting, water, and humidity levels, to give plants optimal growing conditions. The system automatically plants the seeds in trays of clay pods, then loads those trays onto stackable racks equipped with LEDs, where the plants will grow. Currently, the facility houses about eight acres’ worth of crops.
You can watch a video of the system in action here.
VFS isn’t just growing greens, however. Running with the idea that vertical farming needs to be fully automated to offset labor costs, Thompson and Leslie spent nine years developing their patented XA Series warehouse system to sell to customers around the world. The system comes in 28 different configurations, which can be matched to a customer’s business needs and expanded if need be in the future.
They’re not alone in bringing indoor farming into the spotlight of the agtech space in Australia. A company called Modular Farms sells a variety of expandable container farms, though these require a little more hands-on work from humans than VFS’ system (think Freight Farms in the U.S.) Invertigro, meanwhile, sells a modular system the company says can grow everything from leafy greens to berries.
In addition to further developing the XA system, VFS is also using the new funds to develop other technologies, including an automated fodder machine, which can feed livestock for 14 days without human intervention, and a mealworm farm system.
Earth Notes: Urban Agriculture
Vertically stacked growing shelves, closely spaced plantings, and covered beds are helping farms fit in where space is often restricted.
By DIANE HOPE • FEB 13, 2019
In backyards and vacant lots, urban farming is on the rise in towns and cities across the Colorado Plateau. Vertically stacked growing shelves, closely spaced plantings, and covered beds are helping farms fit in where space is often restricted.
Roots Micro Farm
CREDIT MADELYN CHANCE
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Warehouse farming operations grow crops in sterile atmospheres that need costly nutrient inputs and energy for lighting. But small-scale urban farms offer lots of sustainable advantages.
These farms use natural sunlight and moisture, and make great use of local food waste, says Josh Chance. He and his wife Maddy established Roots Micro Farm on a neighborhood lot in downtown Flagstaff two and half years ago.
They mix organic waste from Northern Arizona University and local breweries with horse manure from nearby barns, creating deep fertile growing beds. Hoop houses let them extend the growing season from late April through December. They raise everything from kale to kohlrabi and tomatoes to edible flowers.
Such small urban farms can’t achieve the economies of scale that massive modern farming can – so their produce may cost a bit more than at large grocery chains. But, since they’re often located just a mile or two from consumers, local growers deliver fresh, healthy produce requiring little or no energy for transportation.
There are some extra benefits too--these farms provide pleasant green spaces within a city. And they can give young people the chance to see where food comes from, and how it’s grown. Some even provide training workshops for locals to learn - and trade - skills.
All in all, urban agriculture appears to be an idea ripe for the picking.
Agriculture Is Broken; AgTech Can Fix It
Nov 28, 2018
Erik Kobayashi-Solomon Contributor
Chimneys are seen releasing vapour at the ammonia processing area at the OAO Phosagro plant in Cherepovets, Russia, on Friday, Feb. 21, 2014. OAO Phosagro, Europe's largest phosphate-fertilizer maker, is posting back-to-back weekly gains, pushing the stock above levels it traded at before the collapse of the world's biggest potash venture roiled the industry. Photographer: Andrey Rudakov/BloombergBLOOMBERG NEWS
Imagine that you need to break a $10 bill. You hand the cashier the $10 note and, rather than a $5 bill and five $1 bills, he hands back a single $1 bill.
Certainly, you would be upset. And if you couldn’t extract another $9 from the cashier on that occasion, chances are next to nil that you would ever try to get that shop to make change for you again.
Believe it or not, this transaction – where a consumer offers 10 units and receives only one unit in return – happens literally every second of the day in developed countries. It is not dollars we are exchanging, though, it is calories.
According to a research paper published in 2009, it takes 10 calories of petroleum-based energy to create a single consumable food calorie. The reason for the imbalance is twofold: production methods and distribution networks.
Regarding production methods, the synthetic fertilizers used in crop production are manufactured through the Haber-Bosch process, which relies upon a petroleum resource – natural gas – as a primary input. Natural gas is needed to manufacture the ammonia that forms a crucial building block for synthetic fertilizers.
Grains are used to feed meat animals, so in a real sense, we are feeding natural gas to our chickens, hogs, and cattle as well. Energy is also used in the irrigation, sowing, and reaping processes. Altogether, scientists estimate that it takes a little over eight calories of petroleum-based energy to “manufacture” one food calorie.
The remaining two or so energy calories necessary for us to consume a single food calorie come in the transportation process. I live in Chicago and can drive to my local supermarket to buy a tomato any time of the year – even during the dead of winter. Those winter tomatoes must be shipped in from somewhere!
This photo was taken by author during a blizzard in the Northwest Suburbs of Chicago, IL. Watsonville, CA, where these tomatoes were farmed, is over 2,200 miles from the author's grocery store.ERIK KOBAYASHI-SOLOMON
As an investor, if you showed me a company whose revenue increases were tied to gradual population rise but which was paying $10 in costs to produce a profit of $1, I would show you the best short idea in the world!
Believe it or not, this is the equation on which our modern system of agriculture is based.
AgTech – an industry about which I have written before – is focused on changing this upside-down energy cost equation and rationalizing the process of producing food. It is hard for me to imagine a better area in which to invest.
While my previous AgTech article highlighted mainly American firms, the best example of the advances in this industry is not to be found in the US – the leading agricultural exporter globally – but in the Netherlands – the second largest.
According to this article in National Geographic (which contains some striking photographs and videos of Dutch farms), the Netherlands boasts only 1/270th the land mass of the U.S. located at roughly the same latitude as Saskatchewan, Canada, but exports a comparable amount of food.
Commercial glass greenhouses in Westland. Westland is a region in of the Netherlands. It lies in the western part of the country. High tech industrial production of vegetables and flowers. GETTY
One potato farmer highlighted in the Nat Geo article has reduced his water use by 90% but generates crop yields more than twice as high as the global average; his results are not atypical of the Dutch industry at large. Chemical pesticide use has dropped to nearly nothing and livestock antibiotic use has dropped by around 60%.
Fertilizer use is higher than that in the US per hectare of cultivated crop, but because Dutch farms produce so much more per hectare than American ones, the fertilizer use per food item is much lower. In addition, fertilizer use in the Netherlands has been falling since 2002, rather than rising, as in the US.
Figure 1. Source: World Bank (data), Framework Investing Analysis FRAMEWORKINVESTING.COM
These incredible efficiency improvements have come about because the Dutch government set clear policy objectives, supported by tax and development incentives, then let the free market do what it does best – develop innovative solutions. These policies have allowed the Netherlands to move beyond the technology paradigms of the last two centuries and create intellectual property and jobs suited for the present one.
While Dutch farms have already embraced a new paradigm and are moving forward to take the innovations even further, opportunities exist now in the United States as well. Over the past several weeks, I have been talking to the founders of several innovative AgTech start-ups focused on the local production and packaging of greens and vegetables.
Smart money is pouring into these types of businesses – in 2017, Plenty, a high-efficiency, IoT-enabled vertical farming start-up received a $200 million round B investment from the Softbank Vision Fund and an investment vehicle for Jeff Bezos’s billions.
Matt Barnard, co-founder and chief executive officer of Plenty Inc., speaks at the SoftBank World 2018 event in Tokyo, Japan, on Friday, July 20, 2018. SoftBank World, the company’s annual two-day event for customers and suppliers, ends Friday. Photographer: Kiyoshi Ota/Bloomberg© 2018 BLOOMBERG FINANCE LP
If you think back to Whole Foods Markets in the early 1980s, it qualified as a niche business. Thanks to the vision of its founders and its niche status, it sported nearly a 40-year run with huge revenue growth rates and profit margins 10 times higher than that of other grocery chains. I believe vertical farming firms will experience a trajectory similar to the organic food market, though probably the uptake will be much more rapid.
Elimination of pesticide use, reduction of water wastage, greater efficiency of fertilizer use, much greater food safety and traceability, and hugely decreased petroleum product usage in transportation are all features of vertical farming that will be good for the environment and the society.
The fact that vertical farms’ cost structures mean that, for at least a few years, they will be wildly more profitable than conventional farms will be good for intelligent investors. No wonder the smart money is pouring in.
I am the Director of Training and Research at Framework Investing, a company that teaches institutional and individual investors to close the gap between their investing skills and their investing responsibilities. My expertise in valuing private and publicly-traded companies...
Cover Crop Powers First Transatlantic Flight Using Sustainable Biojet
A United Airlines plane powered by biojet fuel made a landmark non-stop voyage from San Francisco to Zurich.
SEPTEMBER 24, 2018 LAUREN MANNING
On Monday, a United Airlines plane powered by biojet fuel made a landmark non-stop voyage from San Francisco to Zurich. Agrisoma Biosciences, a Canadian agtech company that develops Carinata seeds to produce aviation biojet fuel, partnered with United Airlines and French oil and proteins sector company Avril Group to accomplish the second international commercial flight using the company’s seed oil.
As with any startup, proof of concept is a key milestone.
“We are creating a new industry,” Hank Krakowski, Agrisoma’s Director of Sustainable Aviation, told AgFunderNews. “The question was whether the fuel is ready, and it is. Until we got through the approval process, we couldn’t talk to people about investing in contracts with us to create the feedstock for the biojet fuel.” Krakowski has deep ties to the aviation industry after working as a commercial pilot for United Airlines for 30 years. After hanging up his wings, he served as chief operating officer of the Federal Aviation Administration’s Air Traffic Organization for a few years before transitioning into aerospace investment banking. It was through this endeavor that biojet fuel and a sustainable future for aviation captured his focus.
Earlier this year, Agrisoma and Australia’s Qantas Airways partnered on a transpacific flight from Los Angeles to Melbourne that used biojet fuel produced from Carinata, which is a member of the mustard seed family.
“Qantas came to us over a year ago curious about whether we could be the source for their biofuel needs in Australia,” Krakowski explains. “Something happened that surprised us in a wonderful way: when the flight ended, over the next few months Australian farmers called us and Qantas to see how they could work with us.”
Since launching in 2001, Agrisoma has captured over $27 million in venture capital from Canadian investors, with its most recent Series C in March 2018 raising roughly $12 million. Its four investors – fund manager DesJardins Capital, impact investors Cycle Capital, Quebec-focused funders LuneRouge, and multi-stage investor BDC – all hail from Canada and seek out sustainable technologies. Krakowski hints at more financing activity for Agrisoma in the near future, but could not share more details at this time.
A Seed Company at Heart
While many might assume that Agrisoma brands itself as a biofuel company, it’s better categorized as a seed company. Agrisoma’s proprietary Carinata seed, currently being cultivated by growers in both the Americas and Australia, is a non-food, mustard-like oilseed that produces a grain that is roughly 50% oil and 50% protein. Carinata biojet fuel is made by harvesting tons of Carinata crop, crushing the grain to recover the oil, and refining that oil into jet fuel by the same process used for petroleum-derived jet fuel.
Agrisoma sells its Carinata seeds to farmers or agricultural cooperatives who then grow the seed as a cover crop and sell it back to Agrisoma. It has developed 20,000 lines of germplasm so that it can select the precise variation for different geographical locations and holds numerous patents for the germplasms.
“We have to go into different locations, do trials, sort out the right seed varieties and germplasms for that area, and then we put a two-to-five-year scale-up plan in place where we increase the acreage every year. We have to get farmers to plant and grow the seed and to harvest it correctly,” he explains. The company currently reports 50,000 acres of commercial crop growing across the Americas and Europe with the hope of doubling this acreage every year. It’s started the trial process for Carinata cultivation in Australia, New Zealand, and France.
While biojet fuel is a relatively new product in the jet fuel market, Agrisoma has found a way to slip into the existing supply chain: the company sells directly to existing refineries with biofuel production capabilities, aiming to avoid adding additional layers of complexity to the process and the existing supply chain, says Krakowski.
The biojet fuel typically replaces 10% to 30% of the petroleum jet fuel needed for a flight, making for a cleaner fuel blend that reduces greenhouse gas emissions, according to Agrisoma. Carinata is the first oilseed to be certified as sustainable by the Roundtable on Sustainable Biomaterials, an independent global standard, and certification program for sustainable biomaterials.
Competing with Conventional Jet Fuel
When it comes to industry acceptance, Agrisoma is banking on recent agreements from United Nations International Civil Aviation Organization (ICAO) encouraging airlines to achieve carbon neutral status by 2021 with the goal of claiming a 50% reduction of CO2 emissions by 2050. Carinata and the way in which the company goes about cultivating the crop offers certain environmental benefits that play directly into the ICAO’s aims.
“When you grow it, it sequesters carbon out of the atmosphere like any plant and puts it into the ground. Then, you harvest the plant, and you have a biomass that you leave behind on the ground that does a number of things: it prevents carbon from escaping and provides nutrients for the next crop growing.”
Farmers have been largely receptive to cultivating Carinata, which is used as a cover crop. This means that it doesn’t compete with traditional food growing cycles. And while other cover crops commonly don’t have a dollar value, Carinata cultivation offers farmers an additional stream of income during the off-season.
As an added bonus, Agrisoma sells the spent meal that’s leftover after the seed-crushing process for livestock feed. Because Carinata is a non-GMO seed, the meal sells at a premium to dairies producing organic products.
With some estimates suggesting that airline travel will double from current demand levels by 2040, Krakowski thinks that airlines will have no choice but to seek out sustainable fuel sources that allow them to keep pace with demand while satisfying the ICAO agreement. In fact, Agrisoma is in active discussions with a handful of oil companies about using its oil as a feedstock for biofuel production, says Krakowski.
The Sky’s the Limit
With a few successful flights under its belt, the company is focusing on increasing its acres of production and scaling up in the Americas and France, as well as Australia, New Zealand and perhaps Asia. Most startups keep a close eye on the competition, but for Agrisoma and Krakowski there is plenty of room in the biojet fuel space for additional players.
“If you look at the numbers the industry needs to meet a doubling of air commerce against biofuel availability, they will need every drop they can get from anybody who can produce biofuel regardless of where it comes from.”
Avoiding GMO Food Might Be Tougher Than You Think
Labels are about to become mandatory, but what does that really mean?
Photo: Scott Warman
By Sara Chodosh
While there’s currently no evidence that genetically modified organisms harm human health, that isn’t to say there aren’t legitimate reasons to avoid them.
Perhaps the most common is a simple preference for that which is natural and a general aversion to that which technology — especially technology developed by Big Ag — has meddled in. Others worry about long-term effects that haven’t appeared in scientific studies yet or ecosystem-level impacts that we haven’t picked up on. A comprehensive 2016 report from the National Academies of Science, Engineering, and Medicine found no evidence that would support those concerns, but it also noted that caution is generally a good idea.
GM experts and proponents also have legitimate concerns that adding a label identifying GMOs gives the impression that there are scientifically proven risks to worry about. Studies on the perception of GM food suggests that the public has a baseline aversion, and a label may increase wariness. Labeling advocates, of course, argue that if Americans want to avoid GMOs, they have a right to do so.
But really, a lot of the research on public opinion of GM food suggests that Americans don’t so much think negatively of it as that they don’t think much about it at all. Yes, there’s a baseline aversion, but the opinion of study subjects seems to vary wildly depending on the information provided. One study following up on that 2016 report found that the entire American public shifted their opinion measurably in the positive, likely because the report was well-publicized in its findings that GMOs are, as far as we can tell, perfectly safe for the human body.
So, it’s unclear how many Americans will actually be looking to avoid GM food in the future. But even if you want to keep your pantry GMO-free, doing so could prove challenging.
“Can people avoid them? The answer is certainly yes. Especially in the last few years, there have been more products on the market that are non-GMO or organic,” says Jayson Lusk, an economist at Purdue University who studies the consumer side of GMOs. “Now, those products are more expensive — no one ever said you can avoid them for free. But they can if they’re willing and able to pay, and one way they’ll pay is in the time to find the products.”
Though very few fruits and vegetables are genetically engineered, he points out that almost anything with corn or soybeans will be difficult to get without a GM component. More than 90 percent of both crops are bioengineered in the U.S., and corn and soy derivatives go into many processed foods. Much of the sugar produced derives from sugar beets, nearly all of which are genetically engineered. Somewhere between 60 and 70 percent of processed foods on the market today have a GM ingredient, but many of those foods may not require a label according to the proposed rules.
Highly processed ingredients like high fructose corn syrup have little to no traceable DNA in them, and so the U.S. Department of Agriculture (which regulates food labels) doesn’t require manufacturers to add a label to indicate those bioengineered foods.
And then there’s that word — ”bioengineered.” The USDA only just announced how they would require manufacturers to disclose GM ingredients, though the law was enacted back in 2016, and the new rules don’t use the term “GMO” or even “GM.” Instead, they opt for “BE” or “bioengineered,” perhaps to avoid using loaded terminology. “I’m not sure how much people will know that term,” says Dominique Brossard, a communications professor at University of Wisconsin-Madison specializing in life science issues like GMOs. “I don’t think it’s going to be very easy for people to find out [which foods are genetically modified].”
“I think this was actually the intent of the 2016 law,” says Glenn Stone, an environmental anthropologist who studies the GMO debate. “[It] was passed just in time to overrule a state-level law was taking effect requiring that GMO foods have clear labels.” Vermont had previously passed legislation that would have fined companies for failing to label food containing GM ingredients, including highly processed ones like corn syrup (though it excluded cheese, which often relies on a genetically engineered enzyme called chymosin). It also specified that the labels would include the phrase “genetic engineering,” not “bioengineered.”
In contrast, the USDA regulations allow companies to choose between three options: write out the warning (as in “contains a bioengineered food ingredient”), include a BE label, or use a QR code that would link the consumer to a page disclosing all the information.
Stone, along with other labeling proponents, argue that these options will make it harder for people to actually get the information the legislation is supposed to mandate. “This rule claims to label GMO foods, but it exempts the most common GMO food ingredients like soy oil and corn syrup while allowing the use of QR codes,” he says, “knowing perfectly well that few shoppers have the time or inclination to get out their phone, scan a code, and read a website over and over while shopping.”
Unless those regulations change, though, it could be quite hard to figure out exactly which foods contain GM ingredients and which do not. Many of the top GM crops grown for human consumption — maize, soybeans, canola, sugar beet, papaya, squash, eggplant, potato, and apples — get processed first, and wouldn’t require a label. The rest, if sold whole or as part of another food, would necessitate one. A recent overview of attitudes towards GM foods, published in the journal Annual Reviews, commented that “Since soybeans and corn (the most widely planted GE crops) are common ingredients in many food products (corn starch, corn syrup, corn oil, and soybean oil), it is likely that foods in the United States listing soybeans and corn as ingredients contain some GE ingredients unless it is specifically stated that they do not.”
Avoiding GM foods entirely could mean quite a drastic shift away from any processed food at all. Corn syrup and soybean oil are in a surprising number of foods, and they won’t carry a BE label. It’ll be up to you as the consumer to navigate those grocery store aisles on your own.
NL: Innovations Theatre Showcases Smart Food Production - June 20-21, Utrecht
The Innovations Theatre, an initiative by GFIA, Europe’s largest showcase of sustainable agtech, will introduce over 40 technologies through talks and demonstrations from companies leading the way with new techniques and trends in sustainable agriculture and food production
June 20-21, Utrecht
NL: Innovations Theatre Showcases Smart Food Production
Technology innovations and solutions from start-ups and entrepreneurs from across the world that will drive the future of sustainable agriculture and smart food production will be showcased in Europe next month during the Global Forum for Innovations in Agriculture (GFIA) at Jaarbeurs Expo Center, Utrecht, The Netherlands from 20th to 21st June 2018.
The Innovations Theatre, an initiative by GFIA, Europe’s largest showcase of sustainable agtech, will introduce over 40 technologies through talks and demonstrations from companies leading the way with new techniques and trends in sustainable agriculture and food production.
Innovations confirmed will include: Vito Remote Sensing that use state of the art drones for developments in phenotyping for plant breeding; Trapview’s pest monitoring solution that utilizes AI for enhancement in pest control; Bo Mill that uses infra-red analysis for grain sorting and advanced digital technology revolutionizing precision irrigation; Cerescon’s selective asparagus harvester only previously achievable manually; Netafim NetBeat’s revolutionary irrigation system that combines real-time data for crop, soil, weather and irrigation to build a personalised irrigation strategy; Agricultural Natural Biostimulants that boost yields and profits whilst sustaining the fragile soil ecosystem; smatrix a voice-based software for mobile data collection designed for use in demanding conditions such as test fields, greenhouses and climatic chambers; and many more.
GFIA Europe, takes place during the International Week for Smart Food Production (IWSFP) alongside other major B2B agriculture expos such as VIV Europe and the European Halal Expo. European leaders and thousands of agribusinesses, innovators, food industry professionals, farmers, NGOs and development experts from around the world will share ideas, actions and debate in responding to the most significant challenges needed to drive sustainable agriculture for increased productivity and food security.
Nicola Davison, GFIA Show Director, said: “GFIA was born on the belief that continuous innovation in agriculture is the only way to support a food secure future. GFIA Europe as partners of International Week for Smart Food Production will continue this momentum with the vast number of new innovations being showcased for the first time in Utrecht. For businesses looking to remain competitive and profitable, GFIA Europe provides hundreds of products and solutions to improve yields, combat pests, save water, improve animal health or decrease inefficiencies.”
This year’s exhibition will focus on key sectors including indoor farming and hydroponics; aquatech; and crop production. Entry into the exhibition and Innovations Theatre is free and tickets for the main conference start at €399 +VAT and include entry into the International Exhibition, Opening Ceremony, Main Conference, Innovations Theatre, Proagrica Future Farming Theatre, partner workshops, daily delegate lunch, refreshments during networking breaks, plus access to an online meeting system and app to facilitate networking with exhibitors and other attendees. For further information on GFIA Europe and to register visit www.gfiaeurope.com
Publication date: 6/4/2018
"50% Higher Clone Production With New AEtrium-2.1 SmartFarm-72"
"50% Higher Clone Production With New AEtrium-2.1 SmartFarm-72"
In advance of next week's MJBizConNEXT conference, AEssenseGrows introduced last Monday the AEtrium-2.1 SmartFarm-72, enabling 50 percent higher clone production than prior versions of the aeroponics system. The new 72-tray configuration increases yield to 13,500 per month from the prior version's 9,000 per month.
AEssenseGrows is an ag-tech company specializing in automated aeroponic platforms for high-yield plant production. The company has developed advanced grow systems featuring sensor-driven software that monitors and automatically adjusts the ingredients for specific grow recipes. The four-layer high-density AEtrium-2.1 SmartFarms are designed for high-volume cultivators and come in 24-, 48-, and now 72-tray configurations.
"The pressure on growers in the burgeoning cannabis industry is intense and will only increase as laws evolve and the market grows," said Phil Gibson, vice president of Marketing at AEssenseGrows. "AEssenseGrows' latest version of its SmartFarm cloning product helps give growers greater control over their fates by delivering fast, safe and reliable clones in volume."
AEssenseGrows will showcase its grow systems at MJBizConNEXT, May 9-11, at the New Orleans Morial Convention Center. The company will also participate in the National Cannabis Industry Association annual Lobby Days, May 21 to 23 in Washington, D.C.
And in mid-June, AEssenseGrows will co-sponsor the 2018 International Indoor Plant Factory Symposium with the Shanghai Academy of Agricultural Sciences (SAAS). The symposium, running June 12-15 at the Blue Palace Hotel in Jiading, Shanghai, brings together some of the world's leading experts in commercial indoor cultivation for an exchange of ideas and information about the latest innovations, technologies and research in the field.
More information:
www.aessensegrows.com
Publication date: 5/2/2018
Iowa AgriTech Accelerator Opens Applications for 2018 Cohort
Iowa AgriTech Accelerator Opens Applications for 2018 Cohort
The Iowa AgriTech Accelerator has opened applications for AgTech startups wishing to participate in its 2018 cohort. Early-stage AgTech companies from around the world that have an idea, intellectual property or prototype for agricultural innovation are encouraged to apply at www.agiowa.com/apply.php.
Six startups will be selected to participate in The Accelerator’s Class of 2018, which will gather in Des Moines, Iowa, to embark on a 94-day journey to accelerate their businesses. Throughout the incubator period, startup companies will each receive $40,000 in seed funding, subsidized housing throughout the incubator period, time with mentors and investors and opportunities to build strategic partnerships. This year’s class will be held May 29 through August 30.
The Accelerator is once again excited to have support from some of the largest and well-known AgTech companies in Iowa, including DuPont Pioneer, Farmers Mutual Hail Insurance Company, Grinnell Mutual, Kent Corporation, John Deere, Peoples Company and Sukup Manufacturing, in addition to more than 100 mentors. Investor companies and mentors will provide intensive professional and personal mentoring to each of the six startups, offering the companies a wide range of resources to help get their businesses and ideas off the ground running. Receiving financial, tech, legal, HR, marketing and design advice, the startups will benefit from each investor company relationship, and in return, the agriculture industry will benefit from their innovations.
About the Iowa AgriTech Accelerator
The Iowa AgriTech Accelerator, based in Des Moines, Iowa, is a mentor-led accelerator focused on AgTech innovations. Led by innovators and leaders in several areas of agriculture, The Accelerator seeks startups ready to change the status quo. For more information about the Iowa AgriTech Accelerator, visit AgIowa.com.
If someone you know has a great AgTech idea or business looking to grow, please refer them to The Accelerator’s website, www.agiowa.com, to learn more about the program.
You're Invited
Ag Tech Investor Conference
Des Moines, Iowa
About the Conference
Prairie Crest Capital invites you to its Agricultural Technology Investor Conference, to be held Thursday, November 9, in the lower level of Hy-Vee Hall at the Iowa Events Center in Des Moines, Iowa. The conference will highlight the opportunities, challenges and successful deployment methods in investment in emerging companies in the Ag Tech sector.
About Prairie Crest Capital
Prairie Crest Capital is a venture capital firm in Des Moines focused on early-stage investments in promising agricultural and breakthrough technology firms. Leveraging their experience and Midwest location, Prairie Crest Capital connects investors to underserved and compelling opportunities in the Ag Tech sector in order to deliver superior returns.
Agenda and speaker bios are available at
prairiecrestcapital.com
9 AgTech Startups Using AI to Grow Smarter
We won’t spend too much time belaboring some obvious points when it comes to feeding future Earth. Basically, we’re pretty well screwed. Estimates from just a few years ago said we would need to increase agricultural production by 70 percent to feed nine billion people. A more recent estimate says we can expect closer to 10 billion mouths to feed by mid-century.
9 AgTech Startups Using AI to Grow Smarter
SEPTEMBER 9, 2017 BY NANALYZE
We won’t spend too much time belaboring some obvious points when it comes to feeding future Earth. Basically, we’re pretty well screwed. Estimates from just a few years ago said we would need to increase agricultural production by 70 percent to feed nine billion people. A more recent estimate says we can expect closer to 10 billion mouths to feed by mid-century. You do the math (mainly because our MBAs flunked their pre-algebra classes). Throw in a few record-setting storms every year for the next few decades, and soylent green is starting to taste pretty good. Still, we’re an optimistic bunch at Nanalyze (a lucrative opioid addiction will do that for you), and we have found plenty of reasons to be excited about agriculture technology—or, in the parlance of our times, agtech—and its use of artificial intelligence to grow some smart solutions.
AgTech Grows Up
One of the big reasons we’re rooting for the future is that the world’s biggest tech fund, the SoftBank Vision Fund, planted $200 million in the biggest agtech funding round ever for San Francisco-based Plenty. That brought total funding for the three-year-old company up to $226 million. SoftBank basically bought a farm. A vertical farm. Plenty employs the latest tech like IoT sensors and machine learning to grow crops vertically indoors using only light, water and nutrients. Its system reputedly uses only 1 percent of the water guzzled down by conventional farming techniques. Plenty also maintains it can grow up to 350 times as much produce per square foot as Old MacDonald.
This woman at Plenty looks so happy you’d think she was growing a wall of marijuana. Credit: Plenty
Only a month before, Plenty had made its first acquisition: Bright Agrotech, an indoor agtech hardware company for indoor growers. All the new green from the Series B round will see the company open urban farms outside of its one 52,000-square-foot facility, as well as invest in hiring staff in computer science, machine learning, mechanical engineering, crop science, biology among others, according to AgFunder News.
The SoftBank investment certainly catapulted Plenty to the head of the class among agtech vertical farming systems, but it still faces some stiff competition against the likes of Bowery Farming and AeroFarms.
Founded in 2015, New York City-based Bowery Farming has raised a total of $31 million in disclosed funding, following a $20 million Series A in June. It has a long list of investors behind it, including Google. The company’s BoweryOS platform uses computer vision, automation and machine learning to monitor plants to get more out of less. It claims to use 95 percent less water than conventional farming while producing 100 times more against the same footprint of agricultural land.
Founded way back in 2004, Newark-based AeroFarms has compiled nearly $96 million in disclosed funding after a $34.3 million Series D in May. This agtech startup doesn’t outright say that it uses machine learning, only “predictive analytics”, to crunch big data for optimizing its system. AeroFarms boasts similar yields and water efficiencies as its competitors.
Yielding Better Results
Conventional farming certainly isn’t being left out of the agtech space when it comes to applying AI for solving the problem of boosting yields without increasing inputs like fertilizer and water. For Benson Hill BioSystems, founded in 2012, the way forward is to identify genetic traits in crops that will produce the most bang for the buck. That approach has brought the Raleigh, North Carolina some big bucks of its own, with $34.5 million in disclosed funding, including a $25 million Series B in May.
Credit: Benson Hill Biosystems
Its CropOS platform uses big data and AI to predict crop outcomes from certain traits, starting with photosynthesis. The system is hitting the mark about 10 percent of the time, which doesn’t sound so impressive until you learn that the best you can do otherwise is about 1 percent. The company recently revealed that it is developing a gene-editing tool it calls CRISPR 2.0 that it claims is better than CRISPR/Cas-9. Benson Hill plans to make its new CRISPR technology openly available, as it already has with CropOS. Sounds like this startup might be one company truly interested in feeding the planet and not just its bottom line.
Without a Trace
A community of good and bad microorganisms inhabit soils just like they do the human gut, which is called the microbiome. San Francisco-based Trace Genomics, founded in 2015, produces kits for farmers so they can test the health of their soil microbiome. The agtech startup has raised $4 million in one early stage round to date. The company says it applies AI techniques similar to those used in fraud detection to ID the good microbes from the bad. Its screening products retail at $199 and up.
Credit: Trace Genomics
Trace Genomics is part of a growing sector in agtech microbiology. For instance, we profiled a Massachusetts company earlier this year called Indigo that uses the beneficial microbes to help plants grow better. The company scooped up $156 million in VC funds last year to lead all agtech startups.
Seeing a Difference
Even the healthiest soils and the best genes won’t always protect your farm or garden from the scourge of pests or disease. If only there was a way to ID the culprit quickly. Why, yes, there’s an app for that. Founded in 2015, Germany’s PEAT has developed a free app called Plantix that uses machine learning and computer vision, technologies within the broader AI umbrella, to identify the problem with a plant from just a picture. It also offers solutions and preventive measures.
Credit: PEAT
The company is giving the tech away for free with the hopes it can bank on all of the anonymized data Plantix collects over time. We’ve seen the benefits of AI and computer vision on agriculture with another company called Blue River Technology, which has developed a system that can actually “see” weeds so that farmers can dramatically reduce the use of pesticides. Deere and Company just snapped up Blue River for $305 million this month. The California company, one of CB Insights’ AI 100 in 2017, had raised about $30 million prior to exiting the startup scene.
Agricultural Intelligence
Agtech meets fintech with Colorado-based aWhere, which has raised about$14.45 million since it was founded in 1999, with almost all of the disclosed funding coming 15 years later in 2014. The company has developed a global weather data platform keyed onto the agricultural landscape. It has turned more than a billion daily data points into what it calls agricultural intelligence.
The insights it can provide from all that data target a number of different sectors, from the farms themselves to agribusiness and commodity risk to food security for government customers. As John Corbett, CEO of aWhere, told AgFunder News (AgFunder being one of two of the company’s primary investors): “Anyone with commodity risk exposure should be looking at this: these data have greater fidelity in space and time than anyone else.”
Founded in 2017, Spanish company ec2ec (easy to see) has raised $1 million, according to CB Insights, for its AI platform that supports several solutions similar to aWhere. These include farm management, supply chain insights and market forecasts. Information is sparse on how it does this or what datasets its machine learning system mines for predictive analytics.
A Smart Camera
Swiss agtech startup Gamaya straddles the worlds of drones and AI. Founded in 2015, the company has raised about $4 million. The startup has developed a specialized hyperspectral camera designed to fly on a drone. Whereas the human eye or your typical digital camera can use three bands of the electromagnetic spectrum, hyperspectral cameras can use many narrow bands to create images that provide details unavailable to the naked eye. The Gamaya camera has 40 spectral channels. Algorithms then process the data, providing insights on crop health that could be affected by such things as disease or drought. Below you can see it identifies gaps in a field of sugarcane.
Credit: Gayama
The company claims the data acquired from its cameras are 10 times more information than any other monitoring solution currently on the market.
Conclusion
Investors poured more than $3.2 billion into agtech in 2016. This year’s $200 million mega-round to Plenty and $305 million exit by Blue River show that the sector is drawing serious attention. You can build all of the cool VR headsets in the world, but the biggest disruption on the planet will always be hunger. Remember the Arab Spring? That was driven, in part, from high commodity pricescaused by agricultural failures and the diversion of crops for biofuels. These agtech startups, applying AI solutions, are showing they can not only feed more people but even predict when those times of instability might arise again. That’s something to chew on.
The Good, The Bad, And The Ugly of Container Farms
The Good, The Bad, And The Ugly of Container Farms
Chris MichaelFollow
Chris is the CEO at Bright Agrotech — The global leaders in vertical farming equipment design and technology. Creators of ZipGrow. www.zipgrow.com
It’s time to have an honest conversation about container farming.
There’s almost nothing that rouses more cheering here at the Bright Agrotech office than seeing new farmers make their first sale.
We love seeing photos of our farmers slinging salad at a farmers’ market or selfies with their cilantro.
At the end of the day, those moments are what power us to keep doing what we do. We love it. We revel in it.
And when it doesn’t work out, we mourn just as strongly as we cheered.
When a farmer decides to quit, or when they overestimate their market, or when their equipment fails — we feel that. It’s disheartening to see someone with so much passion give up their dream.
Over the last five years, we’ve seen a lot of new growers start farms of all kinds only to shut them down a few months or a few years later. Not only is this disappointing for the farmer, but it hampers the industry through the loss of valuable farms that were helping increase access to food.
An unfortunate trend we’ve seen recently is that too many of these losses are happening in one type of farming in particular: shipping container farms.
The common killer of container farms (or any modern farm that leverages technology) is unrealistic expectations about what the tech will do for them, how much their farms can produce, and what kind of labor is required to make it all work.
Don’t forget, even technologically advanced farming is still farming!
Leveraging the modularity of containerized farms can be a very powerful way to bring better food to local communities all around the world. There’s some serious potential here and it’s exciting stuff!
However, like any new venture, modern farmers need to know what goes into being successful and what challenges they need to prepare for in the process.
To help create realistic expectations, we need to talk honestly about the potential benefits and drawbacks of shipping container farms.
In this article, we’re going to cover the main pros and cons of the (used) container form factor.
By speaking honestly about the good, the bad, and the ugly of container farms, we can help more aspiring farmers start businesses that positively impact their communities, now and in the future.
The good: What are the benefits of shipping container farms?
As of this writing, there are several hundred container farms parked in cities and backyards, parking lots and warehouses around the world.
They’ve been featured on TV, in newspapers, and by the internet’s top bloggers. Without a doubt, this type of farming has captured the interest of millions of people enchanted by the transformation of discarded containers into futuristic farms.
But does this farming form factor makes sense for farmers — those starting businesses growing and selling food?
The biggest “pros” of repurposed container farms are:
- They’re modular and easy to ship.
- They’re compact and self-contained.
- Used containers are cheap and available.
- Prices will continue to be driven down as competition increases.
Let’s dig into more details on the good side of shipping container farms.
Container farms are easy to transport
Farms built from used shipping containers are — as the name implies — easy to ship. Ideal, in fact.
The primary benefit of easy shipping is that manufacturers can set up shop where it’s cheap, then ship them directly to the farm site fully loaded and ready to grow.
There’s some serious potential there for setting up your farm quickly and starting to grow without having to worry about building a greenhouse or finding warehouse space.
Most of the benefit, however, stays with the manufacturer.
After all, why would a farmer who is establishing a farm to serve a local market need to move their farm that often? You could technically hire a crew with a crane to put in on a semi and move it across town if you felt so inclined, but why would you want to do that?
While the container farm is technically easier to move due to its form factor, we don’t advise planning a farm to be moved often.
Container farmers have a compact footprint
One benefit of growing in a container farm is that you don’t need a lot of land or a dedicated building to start.
That means modern farmers or program directors can now drop one of these behind a restaurant or in a school parking lot. In the end, the compact form opens up a lot of doors for producing food closer to where it’s consumed.
Keep in mind, however, that most container farms require a perfectly level platform to function (drainage lines need to flow in the right direction after all) and can require a cement pad.
Being able to park a farm anywhere you need food is an amazing achievement and therefore a big benefit of this form factor.
Containers are readily available
Used shipping containers are everywhere. Shipping companies have been using them for decades to ship all sorts of goods overseas, so millions of them are made.
When containers like refrigeration shipping containers break, they are often easier (and less expensive) to “retire” than to fix.
This still represents a loss for the shipping company, however, so they’re usually eager to sell whatever retired containers they can. Altogether, this makes used containers very inexpensive.
The good part for farmers is that these types of containers are cheap and available! That means for a few thousand bucks you can get the shell of your new farm to build out.
Future container farmers gain through value-based competition
Because the cost of acquiring used shipping containers is very low, there are more and more value-added companies getting into the space. The more companies there are, the more the price will decrease over time.
Obviously, a lower price point helps more aspiring farmers launch new businesses which will help to increase the supply of locally grown food around the world, which is good for everyone.
That said, investing your life savings into an inexpensive container farm may be a poor decision if you haven’t examined all the variables.
(Read on for more about the potential drawbacks of growing in a container.)
These four exciting benefits have never combined so well as in container farming. They represent an exciting area of development and accessibility to farming for people that were limited before.
The bad: What are the drawbacks of shipping container farms?
But while there are a lot of benefits to growing in a container, there are just as many drawbacks that aspiring modern farmers need to be aware of before applying for a loan or risking their 401k.
The core problem behind every drawback below is that shipping containers were not designed to grow food. And this puts growers at a disadvantage.
Because the intended purpose is absent in the fundamental design, everything required to outfit a container is a compromise.
The biggest potential drawbacks of container farms are:
- Environmental controls or lack thereof
- Structural integrity
- Antagonism between light, layout, and heat
- People and workflow issues (ergonomics)
- Misbalanced operational expense
- Low comparative output
Controlling the growing environment can be difficult in repurposed shipping containers
If managed well, there are many benefits to a controlled environment (year-round growing, more control over pests, etc.).
However, if environmental control is difficult in the facility, the same benefits become curses; conditions get out of control, humidity and heat accumulate, and pests thrive.
At any given time in an indoor farm…
- lights are generating heat.
- water is evaporating.
- plants are transpiring.
- gasses are accumulating and being exchanged.
- crop populations are fluctuating.
All the heat, humidity, and pests that result from these processes are amplified in a denser growing environment.
To make sure that controlled environment ag remains a blessing instead of a curse, environmental control must be understood and prioritized in the design of the farm.
But many container farms underestimate the complexity of controlling a growing environment consistently enough to produce a healthy crop reliably.
We’ve helped support dozens of farmers growing in repurposed containers who struggle with low productivity caused by poor environmental controls.
One farmer in particular has two containers less than a year old but have yet to reach even close to full production potential, or at least what was promised, because of humidity issues.
Insufficient lighting (constrained by heat as you’ll see below) and high humidity have resulted in low growth rates and rotting issues that are hard to compensate in the cramped space.
He’s in a very tough situation and we hate seeing this happen. Even though he’s added three new dehumidification devices, he still struggles to lower his humidity. As a result, his farm is vulnerable to disease like root rot which in a more purposefully-designed farm wouldn’t have been a problem.
That’s why it’s crucial that container farms purposefully provide adequate airflow, temperature controls, dehumidification, CO2, etc. to their units.
That’s a challenge for most repurposed shipping container farms simply because of the extreme constraints the structure provides.
Repurposed shipping containers can have structural integrity issues
An often overlooked danger of repurposed containers is the limits of their structural lifespan.
Remember, these things have been around the world a few times and battered by corrosive salt water, high winds, and many a forklift operator.
That means they were worn out well before they were made into farms.
This limits the life of the farm significantly. In extreme cases, the quality of the container can be so low that we’ve known farmers whose farms were condemned by the city — an enormous and painful blow when you’ve spent tens of thousands to start a farm.
If you go this route, please be sure you carefully inspect the structural integrity of your container! This industry will not move forward if passionate, local farmers like yourself are investing in farms that fail to function in a year or two.
Light, heat, and layout must be balanced appropriately in any indoor farm
The relationship between light and heat is a largely antagonist one.
Because light and heat are “coupled”, supplying the quality (i.e. intensity of light) needed for plants to grow to their full potential also increases the amount of heat in the growing environment.
Simply put: when light goes up, heat goes up with it. The problem is that plants like light, but they don’t like heat.
As we saw in the previous section on the importance of environmental controls, this delicate balance between light and heat is amplified in dense environments.
Because of their tight spacing, container farms face an interesting conundrum when it comes to this messy triangle. They need high-intensity lighting to grow their crops but don’t often have the space required to install adequate HVAC units to deal with the heat created by these lights.
The result? Many container farms sacrifice productivity by being forced to use less than adequate LED lights to avoid adversely affecting their plants with heat and humidity.
Thankfully, there are some container farms out there mitigating this antagonistic relationship with intent-informed design.
By building a container that’s intentionally designed and equipped to grow plants, companies like Modular Farms in Canada and several Chinese and Japanese container farm companies can manage their growing environments effectively (among other things like moving around and inspecting plants easily).
When doing your due diligence on any future indoor farming equipment, be sure to carefully inspect how the system deals with the antagonistic relationship between light and heat. If you provide the plants the proper light intensity, you’re going to be producing heat and this heat can throw your system into a tailspin if not managed effectively. Make sure you have a way to deal with it!
Remember, if you want to produce high quality crops consistently, you need high quality light. You are replacing the sun after all.
Ignoring human workflows is never a good idea
Farm environments aren’t just designed for plants. They also need to be designed for people. The problem with shipping containers is that they’re not designed for people and that poses some real issues for farmers.
There are two reasons to keep your farm labor-friendly: the first is that labor is money, and the second is that there’s nothing worse than working in a cramped, confined space for dozens of hours each week. It can be enough to drive you insane, or at the very least make you dread coming to work.
Ergonomics — or how efficiently your workplace is set up for workers — is also important, yet this isn’t something you really think about when shopping around for a farm. Our advice? Don’t neglect it!
With those two goals in mind, container farmers must ask and answer important questions about how people will interact with the container farm.
Can I see all my crops easily?”
“Could I work in here happily for several hours each day?”
“Can more than one person work comfortably in this farm?”
These are all questions to answer before making such a large investment.
The most practical way to feel out the workflow in your future farm is to visit a variety of container farms before buying one and see how they feel.
Talk to other farmers who’ve been farming for a while and get their feedback. You won’t regret it!
OPEX and CAPEX should be appropriately balanced
When it comes to starting a business, ignoring your market research or failing to fully understand your financial projections is just rolling the dice.
If you want to stay in business, you have to know you can earn a profit. (That’s why it’s critical every aspiring farmer conducts a feasibility study to assess the financial potential of your farm!)
And a major part of this research phase is understanding the right balance of capital expense and operating expense. Unfortunately, this is also where many new farmers can fall prey to being a little too frugal.
With roots in farming ourselves, we know the temptation to do things on the cheap. There’s something so seductive about scrapping a farm together with inexpensive components. But we also know that skimping on your initial investment may actually come back to bite you when it comes to the cost of running the farm.
Just remember that most of the time when you pay less upfront (CAPEX), you end up having higher costs as you run the business (OPEX). Pay more upfront, and the investment will keep operating costs lower in the future. Again, this isn’t always the case, but 9 times out of 10 it holds true.
The same goes for container farms, or any indoor farming equipment for that matter.
Container farms can be less expensive to set up than many other farms like greenhouse or warehouse operations, but the constraints of the container can drastically increase the cost of running your farm. Especially when you have to add or replace equipment that fails, and your labor costs go up because of the increased time spent performing daily tasks like inspections and harvesting.
Don’t forget you’re starting a commercial farm here, not a backyard garden, and your goal is to grow and sell good food.
If you’re starting a system that hinders productivity (both for plants and workers) and requires upgrades or expensive maintenance to operate, you’re actually hurting your ability to accomplish your goals.
At the end of the day, cheap is not actually that cheap.
Beware vanity metrics
Farmers almost always make money by selling pounds (or ounces) of produce. Rarely do they sell a number of plants rather than a weight.
That’s why it’s so dangerous to measure a system’s economic potential with metrics like “plant sites.” You may be able to grow an incredible number of plants per square foot, but if they’re small and unsalable then it’s a metric that at best is useless, and at worst is intentionally misleading. An example of this could be a microgreen tray with “1000 plant sites in 1.5 square feet!”
This means that biomass is the only truthful and non-subjective metric.
Remember, vertical farming is not about how much production you can possibly cram into a space. It’s about growing better food closer to market and maximizing your production as a function of the resources you invest, such as capital, light, water, energy, and labor.
The best way to measure the productive and economic potential of your future farm is to compare the capital expense divided by the pounds of produce. That will not only give you an idea of how much your system will yield, but will also allow you to conduct appropriate market research based on weight, not plant sites.
Again, while it’s possible some chefs or farmers’ market customers may buy a head of lettuce, the majority of your markets will want to know your price per pound or your price per ounce.
Like the simplified example used in the video above, imagine that one farm offers 2,000 lb/year of greens and costs $90k in capital expenses (i.e the price you pay for the farm, delivery, installation, and any modifications needed for it to perform when you plug it all in).
Another offers 4,000 lb/year of greens but costs $135k. The second option might take a little longer to pay off, but will be more profitable in the long run. (This is overly simplified so please do a feasibility study to get specific numbers!)
Remember, vertical farming is not about how much production you can possibly cram into a space. It’s about growing better food closer to market and maximizing your production as a function of the resources you invest, such as capital, light, water, energy, and labor.
The bottom line: Container farms can play a significant role in the future of our food system.
The world is begging for better food.
People have lost faith in labels and they’re sick of low quality food they see at the grocery store. They’re demanding fresher food, but can only get it if they have local farmers near them to supply it.
Container farms can play a significant role in solving this supply problem by helping more local farmers get started growing food much closer to market.
But not all container farms are created equal.
Repurposed containers, while a prize of pop culture, require too much compromise to be truly productive modern farming machines in the long run.
We have much more faith in custom built containers that practice intent-informed design and take a ground-up approach to environmental controls, labor workflows, and much more. They’re just much more efficient and effective at helping farmers accomplish their goals.
So while container farms have the potential to fundamentally change the game when it comes to growing better food closer to the markets that want it, these farms must survive to be impactful.
Why did we write this?
Our goal with this piece, like most of the articles we write, is to move the industry forward. Everything we do here at Bright is about helping the local farmer succeed and it pains us to see the opposite happen.
We believe that by being honest about the benefits and challenges, more farmers will start sustainable businesses and help supply the increasing demand for better food.
Do you have experience growing in a container? Do you have questions for those who do?
Note: Repurposed shipping containers and containers designed specifically for growing crops are fundamentally different. In most cases, the latter have mitigated the majority of these issues in the design phase.