The Enemy Is The Value Chain
A stream of observations while attending the Vertical Farming Conference in Venlo, June 2018
Today Jens Schmelzle and I got up in the middle of the night, took a train to Venlo and followed some very interesting presentations on vertical farming. We also had the chance to finally see the BrightBox research facility. I took some photos there and will use these images as random visual relief to make all this text a little less annoying.
A banker’s perspective
Lambert van Horen, Analyst Horticulture RaboResearch
What is a vertical farm, anyway? According to RaboBank it is soil-less, uses only artificial lighting, full climate control and is vertically stacked. Lambert also compared investment costs of vertical farms (about 1300 €/m2) versus greenhouses (100–350 €/m2). He also provided some insights into customers behaviour (no love for local production, they only care about price).
The whole presentation felt like a big giant reminder what GreenTech also showed:
- As long as energy prices are as high as today, vertical farms are not economically viable (compared to other cultivation methods)
- Vertical farms are probably not the solution to feed 10 billion people, as they are mostly suited for fresh, low-calorie produce
But, he also said there are viable case studies out there that already work today, among them are, for example:
- R&D facilities, breeding
- Propagation, seedlings
- Local initiatives offering additional benefits justifying higher prices
- Production of high-value crops
- Integrated farming and food services
- Medical and pharmaceutical plants
- Locations with very scarce resources (e.g. Abu Dhabi)
He closed the session with a gentle but clear reminder for those with high hopes:
While vertical farms might be constantly getting better, the benchmark system (=greenhouses) does not stand still either.
An architect’s perspective
Daniel Podmirsek, Vertical Farming Institute Vienna
Daniel is an architect with a purpose: prove his own dissertation wrong. He is a strong believer in urban farming, but his own research showed dramatic results in terms of energy consumption when cultivating crops in vertical urban farms. Should that keep us from innovating in that space?
Daniel doesn‘t think so! And the reason for that is simple: we don’t have a real choice. The alternatives would be increasing yields (which is very energy intensive as well), land conversion (essentially cutting down rain forests) or changing diets (ha, ha).
He proposed a new typology for urban farms, just like airports or shopping malls have been invented in the last decades. His vision of an urban farm is an interdisciplinary endeavour involving architects, city planners, engineers and farming professionals, of course. It is part of the cities eco-system and able to re-use waste products like heat and CO2 from other sources. I really liked Daniels vision and will closely follow the Vertical Farming Institute to learn more about their plans!
An entrepreneurs perspective
Mark Korzilius, Farmer’s Cut
This is the second time I’ve seen Mark speak about vertical farming since GreenTech and while he presented almost exactly the same content, I was equally impressed with his determination. He clearly has a lot of valuable professional experience from his time in gastronomy and the concept of Farmer’s Cut might be the most sophisticated I’ve seen so far.
He made some really bold statements:
- Don’t go retail, “these guys will suck you dry”
- Focus on the customer experience and add additional value
For Mark, the enemy is the value chain. If retailers take more than half the amount customers pay for the crop, then producers are in trouble. If producers can get rid of these middlemen, then the situation is completely different. He made it very clear that he thinks vertical farms can be economically viable — but not by supplying retailers, but rather supplying to customers themselves.
Mark also presented some facts about their patented substrate and cultivation method called Dryponics. The roots don’t grow into the substrate, but rather lie on top of it. He claims this method results in extremely good quality products containing less water and with great taste. Someone from the audience asked if claims were true that it grows slower than other cultivation methods? Mark’s answer goes something like this: No, but if you’re into the kilo-game, then Dryponics is not for you. He claims that Dryponics produces the best product and chefs would need to use a lot less of it (55g per portion compared to 130g per portion for lettuce). It is sold as a living plant, so none of it is wasted and it’s always harvested totally fresh.
What I liked most of Mark’s presentation is the honesty: controlled environments? Well, do you really have a clue about what’s going on in your nutrient solution? Open structures for CEA? Forget it, you can never control the climate in open structures. It’s all solved from a technical standpoint? Well, nobody could deliver, so we had to invent everything from scratch.
And to wrap it up, a quote that really stuck in my head:
The problem is not the way you (the traditional greenhouse industry) grow, the problem is the way you ship. It destroys all the quality.
A startup’s perspective
Felipe Hernandez Villa-Roel, Founder of Hexagro
Hexagro designs a bee-hive like indoor growing device. It’s modular and focuses on design aspects. I won’t go into much detail, but there were some aspects of Felipe’s presentation that caught my attention. He was talking about a hyper-local food network, for example, which is something we at farmee have been discussing with a lot of people before. Hexagro’s vision for this food network is a bit different from ours, but I think it’s great that different people are trying to solve this problem.
The problem, to begin with, is how can we turn ordinary people into food producers? Obviously, we need to give them the tools to produce food in the first place and a platform to find customers on top of that. There are all kinds of issues coming with such a vision, most importantly rules and regulations regarding food safety (in my opinion).
Felipe’s presentation used a lot of hyped buzzwords like A.I., blockchain, etc. While I do think there is a lot of potential in technologies like these, in the end it will be more about adding value for the customer. I must admit I didn’t really understand how these technologies are really helping anyone at the moment and if Hexagro is already using them today.
At the moment, Hexagro seems to offer a design-focused device in a farming-as-a-service model for restaurants and other companies, which is also addressing a pretty common problem: new farmers, as we like to call them, are people who do not necessarily want to become farmers, but need to. For restaurants, for example, the thought of adding a lot of complexity to their daily life is not so appealing, they would rather book some kind of service to take care of everything for them. All they want is fresh produce growing in their restaurants, bars and stores.
I’m wondering how we will overcome this hurdle, because in the end, we’ll need these new farmers pretty badly. We need to make it as easy for them as possible, show them the power of becoming producers themselves. Farming-as-a-service is a good first step, but I would prefer having a lot of new farmers actually growing food themselves.
A consultant’s perspective
Henry Gordon-Smith, Founder & CEO of Agritecture Consulting
Henry is one of the most interesting people in AgTech today. Why? Because he is not focusing on technology at all, but rather on the biggest problems we as urban communities have and how to overcome them. He always keeps the big picture in mind and is interested in more complex systems. Everytime I talk to him or read something on the Agritecture blog, it sparks other ideas in me that might be worthwhile to explore.
This time, this one struck me the most: What if anyone could go to a website and see all the data related to food in a city. How many cucumbers come into the city every day? Which routes do they take? Where do they come from? Imagine google analytics for food. A tool like this would be so powerful for everyone involved. It might give cities the insights they need to design more resilient systems, consumers the transparency they request. Imagine what journalists could do with a tool as powerful as that?
There is a lot of buzz around smart cities these days, but why is food almost non-existent in that discussion? How can a city be labeled as smart if the food supply chains can’t even be monitored? How can we integrate farming into smart cities? Why does no-one talk about water in smart cities?
I, personally, think part of the problem is ownership of the problem itself. Who has a problem when supply chains break down? Is it the cities? The governments? The companies involved? The people living in cities? Of course: all of us. But who is going to take responsibility for coming up with a solution? I don’t think this is going to be the companies along the chain, retail for example. I rather hope city administrations as well as governments are aware of their responsibilities and willing to invest in the solution. Projects like AgLanta give me high hopes there are a lot of smart people in administrations that are actually going to do just that.
Henry also talked a lot about the need for new famers. He was quoting articles and statistics about farmers committing suicide (5x higher in the US then they used to be) and clearly stated the problem: we will need a lot of new farmers to feed the cities. The solution for that might be as simple as that:
- Community building
- Education
- Entrepreneurship
1,2,3. Easy as that! According to Henry, entrepreneurial spirit is constantly getting stronger and stronger, so let’s build a movement, step by step!
Thanks to everyone involved, until next time.
