Save the data: vertical farming’s advantages

Indoor farming company Aerofarms recently completed a $20 million raise to expand its operations. Chief executive David Rosenberg talks about the advantages of growing plants in a nutrient-rich mist and how the company is able to use data science to create much higher yields than traditional farms.

What advantages do Aerofarms’ growing methods provide over traditional or greenhouse farming?

We use 95 percent less water and we use no herbicides, pesticides, fungicides or beneficiaries. We grow on very fast cycles – we have 22 crop turns a year, versus, as I understand it, a typical 12. We have a very high crop density. So we have about 70 times the output of a field farm, whereas my understanding is that typical greenhouses have about six times the output.

And most importantly, because of our ability to control all of the inputs of the farm we can really specialise in how to stress the biology to optimise around not just yield, but taste, texture and even nutritional density. We have all these controls to really stress a plant to try to understand how to influence growth. It’s nutrition. It’s the [light] spectrum. It’s everything. We have a lot of levers.

Our plants grow on three feet by five feet trays. And for every tray that’s in our system, over a typical growing cycle of 16 days, we take 30,000 data points.

How important is the data component to your business model?

We like to say we are engineering meets horticulture meets data science. And it’s the data science that really pulls it together. We’re using machine learning to understand what’s going on with the plants and how we can improve growing the plants. That’s going to help us move faster to improve the ultimate product.

This is the area where I think we are the world leader – knowing how to grow great plants. And this is the reason we decided we’re not going to sell technology. We want to be the farmer so that we can control the data. It’s not just for the sake of controlling data, it’s for the sake of optimising the farm. Biology is hard, being a farmer is hard. And we excel at knowing how to course correct when biology doesn’t operate the way you want it to.

Has the technology come to the point where you can imagine indoor farms competing with traditional farms on a broad scale?

We’re competing with traditional farmers now. But I think this whole category is going to continue to grow as people become more appreciative of the nutritional value of this particular category. I think our market share is going to grow.

In the category positioned as organic, we are able to achieve the same gross margins [as traditional farms], and we sell to their customers at the same prices. So today, we sell at the same prices that they buy from the field farmers.

As interest in indoor farming grows, and the technology improves, do you see more competition entering space in the near future?

While there are a lot of small players entering the space, 90 percent are probably going to fail in the next three years because what it takes to be successful is really hard. It’s a lot of complexity, and I don’t see anybody else putting in the resources or the thoughtfulness to really scale this business.

I think there’s this romanticised view of local food production. Because people think it’s cool, they want to get into the space. But they underestimate the complexity. So they’re entering this space and they don’t fully grasp how complex it is. It creates an equation where I think a lot of financial players are going to get hurt. And it could put a black eye on the industry.