SL: Our food is grown and served within what is known as a hyper-local radius (fewer than 100 miles). Food is considered local in the U.S. if it is produced (not necessarily grown, but perhaps processed), within 400 miles of the point of consumption. Our hyper-local growing allows for distribution, year-round, of produce for even the most inclement of climates. Our unit economics also allows us to be a low-cost provider of healthy greens, something most vertical farmers won’t be able to do.
This is an industry where the disruption can be enormous, but it can also be very slow and there are very good, entirely satisfactory substitutes in field-grown produce — particularly organic. My colleagues in the industry don’t necessarily want to hear that — they’d rather live the dream of how we’re building the coolest thing since the iPhone X. But the reality is that we still have to build profitable farms if we want this industry to last. Our margins are better (and hopefully will stay better) but costs and revenues still matter, and we still have to make that work, one leaf at a time.
FreshBox, near Boston, is proudly among the only commercial farms that are “gross margin positive” according to its CEO, Sonia Lo. Her farms are modular, built in 320-square-foot shipping containers, each with its own temperature, humidity, and airflow customized to the needs of a crop. Numerous containers can be networked together in a single warehouse, to benefit from the economies of scale of a larger installation, while maintaining the flexibility of smaller ones. “There’s a 20-degree difference between what romaine grows at and what basil grows at, so in a single space, you’re not optimized for any one plant. Containerization is our solution for that,” Says Lo. This approach allows crop yields per square foot as much as 2,000 times that of field farms, she says.
Inside an old ginger ale factory in Millis, Freshbox Farms has 8-by-40 foot containers lined up, each connected to a water purification and air filtration system. Inside every container is a hydroponic farm growing an acre’s worth of leafy greens. But, before we can even enter one, the company’s senior vice-president of plant science and product development, Deane Falcone, and I suit up in lab coats and hair nets so we don’t bring in insects that can damage the plants.
…investors are starting to put some big bucks behind it. Indoor farming startups growing fruits and vegetables globally have raised $285 million since the start of 2017, with particularly large rounds for US-based vertical farms pushing the sector to its highest ever investment levels, according to AgFunder data.
The question is, who will win this market in the end?
No doubt you’ve seen several indoor agriculture companies that claim to be the best at growing leafy greens (lettuces, herbs, etc.) indoors. For any number of reasons, they claim to be better than their peers who are also vying for your funding dollars. But how do you tell the difference between them?
Here are seven simple metrics that will tell you if the company is worth your investment dollars.
Sitting in between a few of these models is Fresh Box Farms, a Boston-based indoor operation currently farming out of shipping containers, but soon building a facility the equivalent to 200 of those, admittedly moving on from the container model. CFO David Vosburg says that though containers were a great place to start, in the long run concentrating labor into one big operation makes more sense.
As CEO of FreshBox Farms in Millis, Mass., Sonia Lo ’84 is also interested in local food and using new technologies to create it. FreshBox has pioneered the use of high-density, high-yield, pesticide- and GMO-free vertical hydroponic farming in indoor enclosures. Hydroponics is a method of agriculture that uses nutrients in water, rather than soil, to grow plants. Lo’s company plants heirloom seeds to support biodiversity, regulates nutrients by parts per million, and refines LED lighting to match the exact spectrum of light plants need to thrive. That means she can grow more greens using less water — roughly 2,000 times less water than conventional agriculture — and faster, too.