Last week, I went to Las Vegas to attend the 3rd Annual Indoor Ag-Con. It was a fantastic event. Two full days of the top movers and shakers and the up and comers of indoor agriculture meeting, shaking hands, and trading tips. It was a great 48 hours, read below to see the top 10 takeaways we got out of attending.
1. Indoor Agriculture Today
This was my first time at the Indoor Ag-Con, and one of the main themes of the event was how far the event and industry had come in the past three years. First, the event was sold out, but more importantly, the major players are well established and growing. Companies like PodPonics, Aerofarms, and Village Farms are firmly established and are delivering hydroponic, locally-grown lettuce, micro-greens, and tomatoes to grocery stores on the East Coast, Texas, and Canada. Each of these companies has recently undergone or is currently embarking on a massive build-out of their facilities to truly go toe-to-toe with the big farmers and distributors coming out of California and Arizona. Their example shows us that large-scale, cost-competitive indoor agriculture is here to stay. We are likely only seeing the very beginning.
2. Commercial Aquaponics is Here!
We were so excited about this. The founder and CEO of Farmed Here, Steve Denenberg, spoke about his journey from real estate to large scale commercial aquaponics servicing the Chicago area. Their main product is basil, and they serve a number of large grocery stores in the area that do not have access to fresh, local herbs in the middle of winter. What's super cool about Farmed Here is that because they use aquaponics to provide nutrients to the plants, they are both growing indoors and are certified USDA organic. That is a big deal and they have blazed a path for the indoor agriculture farmers of tomorrow to follow.
3. There's a Business Model for Everyone
One of the coolest part of the convention was seeing the spread of people working in the indoor agriculture space. There's the big fish, like the farms mentioned above, but one of the best takeaways we saw were the pockets of opportunity for small farmers to earn a decent living from indoor agriculture. BrightAgroTech makes custom vertical farming setups for small farmers. Similarly, Crop King, builds custom hydroponic greenhouses for farmers around the country. Their focus is to empower and work with both new and experienced farmers to get them into the black within their first few years in operation. They help their farmers choose the right niche crops to sell to local restaurants and farmers markets.
4. LED's are the Future
5. Funding is Tough
6. It's Still All About the Marketing
- A nice big label, similar to the 'Organic' one saying the produce is 'Herbicide Free.' This can be a great selling point, especially for leafy greens and herbs that would have the pesticides directly sprayed on them.
- To help build brand loyalty, Farmed Here made their packaging out of that recycled paper material so that it stands out from the other basil. After customers bring it home, they read about it, and know to ask the next time for the "basil in the brown box."
- If you want to sell in retail, expect to invest heavily in your packaging design. No question.
7. The Netherlands are the Indoor Experts
8. Indoor Agriculture is a Great Industry for Startups
As such a young industry, Indoor Agriculture is ripe for startups to establish themselves. While there are some larger corporations tangentially involved -- Phillips making LEDs, General Hydroponics providing nutrients, etc. -- there is still great opportunity for new companies to emerge and enjoy the bounty as this industry grows. New Bean Capital, one of the few VC's in this space, and a great young container farm startup, Local Roots, recently co-authored a white paper (at the right) on the indoor agriculture industry. They estimate that while the industry is generating $0.5B in revenue annually today, that number will likely top $9.0B by the end of the decade. Such rapid growth means great opportunity, both for farms and the technology companies working behind the scenes (like us!) to support them. If you're reading this blog, you likely don't need an explanation of why this expansion is exciting. But to keep it simple, the more growth in this industry, the less water and fuel will be used in growing our food. As I type this blog from drought stricken California, I certainly hope their growth predictions turn out to be conservative.
9. Small Farmers - Sell to Restaurants, Not Grocers
If you thinking of starting a small farm, write a business plan (duh), but as a part of that plan, figure out what you are going to grow. Not only will you tailor your system to the needs of your plants -- the phrase, "choose your plant and work backwards" was said multiple times at the conference -- but make a few contacts with local potential customers to understand what niche crops they want. Then see if you can out-price the competition by growing it locally with hydroponics. Maybe it's a specific pepper or micro-green, or veggie that is usually seasonal but you can provide year-round. Whatever it is, find the niche, stay out of grocery stores (if you plan to stay small), and corner your local market.