Major vertical farm operator builds productivity, scale and scope
January 3, 2017
To see the Spanish-language version of this story go to www.portalfruticola.com.
Climate change, water scarcity and a soaring global population are among the key reasons why vertical indoor farming is taking off around the world. Here at www.freshfruitportal.com we recently visited one such facility belonging to U.S.-based AeroFarms, and learned about the extensive international growth plans for its ‘game-changing’ proposition.
One could be forgiven for thinking they had come to the wrong location when arriving at AeroFarm’s 30,000-square foot vertical farm in Newark, New Jersey. The unassuming building had operated as a paintball and laser tag arena prior to the company acquiring it, with much of the old business’ artwork still on display outside.
Upon entry I am met with a humid waft of fresh leafy greens, rows upon rows of LED-covered vegetables, and the company’s chief marketing officer Marc Oshima.
To see the photo gallery from the visit, click here.
AeroFarms started out in 2004 in upstate New York selling to the Ithaca Farmers Market, and has since invested heavily in its R&D and technology.
Over the years it has built and operated numerous vertical farms while continuing to optimize its technology, and has grown more than 250 vegetable varieties.
I am told around 10-15 types of leafy greens are grown at this facility – its eighth in the company’s history. The vegetables have an extremely short crop cycle of just 12-16 days, while using 95% less water than conventional growing methods and no pesticides.
The seeds are germinated and grown on a cloth made from recycled BPA-free plastic bottles and then loaded into one end of the production row.
Over the course of their growing cycle they are moved further down the row, receiving specific intensities and spectrums of light and a nutrient mist sprayed in precise amounts onto the roots hanging below the cloth. Many factors like temperature, humidity, and Ph and CO2 levels are also closely monitored and modified.
“Everything has been measured down to the micron of the misting droplet. This is really taking farming to a whole other level of precision and performance,” Oshima says.
He explains AeroFarm’s technological developments are happening at such a pace that while just one year ago the vertical farm was around 75-times more productive than an open field farm – due to aspects like crop cycle and density – that figure has now shot up to 130 times.
No dressing needed
The various greens I am given to sample pack a flavor punch – a focus of the company’s R&D process. From baby Bok choy to Ruby Streak mustard greens to baby kale and arugula, each item’s flavors are strongly accentuated.
“At the end of the day we’re a technology company, but we’re also a food company passionate about how we can change behavior. You have to make it taste good – that’s how you change consumption and how you get opportunities to be able to expand category.”
The short crop cycle afford the R&D team ample learning opportunities to optimize the taste and production technology.
“Out in the field you may only have one harvest a year, so you have to get it right. But here we have around 30 harvests a year, or 30 learning opportunities,” Oshima says.
He adds there are more employees with PhDs in the company than just about any other farming operation, and that staff includes the likes of a chief science officer, a chief technology officer, and an Oxford University-educated chief operating officer with a deep background in operating large-scale controlled growing environments.
“It’s a symbiotic relationship between our growing system, environment and product. At the end of the day it’s biology, but it’s also about how we mange and optimize that. And because it’s all our own technology, we understand very clearly how to optimize for these different characteristics.”
The products are sold to retailers within around 50 miles, including ShopRite – one of New York’s leading supermarket chains – and foodservice companies including the Compass Group, one of the world’s leading foodservice operators.
Local schools and restaurants are also supplied, and every week the production facility opens up its doors for local residents to buy from its farm stand.
Oshima says having a connection with the local communities in which AeroFarms operates is important to the company and its ethos of responsibility.
“We think a lot about our local footprint – serving the local communities and hiring locally. Over 40% of our team here lives in Newark, and over 85% live within 15 miles, so there’s a tremendous connection with the community overall.”
A couple of years ago the New York Times hailed the Newark vertical farm as helping to drive the revival of the Ironbound local area, which has been troubled over recent decades with severe economic and social issues.
An ambitious pipeline
With AeroFarms having invested a significant amount of time and money optimizing its business model and production operations, the organization is now in the midst of a major expansion, both in the U.S. and overseas.
Half a mile away from its Newark operation I visited, AeroFarms is building what is claimed to be the largest vertical farm in the world, which will also serve as its global headquarters.
I am given a sneak peek of the 70,000-square-foot operation in a former steel mill, which has started production and is due for its first sales in the first quarter of 2017.
With 35 rows and 12 levels of vertically growing leafy greens, the farm’s growing capacity is far higher than any other facility, and is complete with full automatization for the harvesting and packaging process.
Despite the impressive size of that farm, Oshima tells me soon it will no longer be the biggest, as the company rapidly rolls out major new projects in other locations.
“Our whole focus as a company has been local – thinking how do we disrupt what is often a very complex supply chain involving produce that is grown remotely?”
He says the crop’s high quality has led to interest from international retailers. Supplying to them from afar would mean going against the company’s focus on supplying locally, but inquiries have served as a strong indicator of the level of demand out there.
“It’s opened our eyes about a completely different part of a business opportunity. Our core focus though is about how do we serve the local communities that we have, and what we want to do is build responsible farms in all the major cities around the world.”
The next two major projects in the pipeline in the U.S. are in Camden, in southern New Jersey, and Buffalo, in upstate New York, and development is underway to roll out new projects in overseas locations.
“Our CEO just got back from China last week where he was for development talks, and then there are other markets we are looking at as well,” he says.
“We’ve had a working demonstration farm in Saudi Arabia since 2011, to show we are able to grow in different challenging environments. So the GCC [Gulf Cooperation Council] countries are an option, and we also have development in Africa and northern Europe, along with a tremendous amount of interest in the U.S.”
Aspects relating to the weather, climate change, pest pressure, water scarcity, food safety and urban density were all among the issues addressed by AeroFarms when decided where to establish new projects.
The entity has been working closely with Goldman Sachs and Prudential Financial on project financing for its farms.
“Each farm in and of itself has the right kind of economic profile that an investor like Goldman Sachs looks for, and they’re very much interested in being part of the next farm and the next farm,” he said.
The company had earlier mentioned its plans to carry out 25 projects over the next five years, and while Oshima explains this figure may end up being higher or lower than estimated due to varying sizes of the operations, he emphasized there was an ‘ambitious pipeline’ based on demand.
“Our organization is very much set up in terms of building the next farm,” he says, adding the operation and technology are very easy to deploy.
“We’re just trying to have very measured growth so that we can make sure we execute and deliver what we think is a game-changing proposition.”