is vertical farming right for you · is vertical farming right for you? oct. 3, 2018 corey ellis,...
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Is Vertical Farming Right for You?Oct. 3, 2018
Corey Ellis, [email protected]
About Growcer
• Canadian technology company in partnership withAlaskan growers– Growing vegetables commercially in extreme weather– We built some of the world’s first year-round farms that operate in the
Arctic Circle; over a dozen new sites deployed in the last 18 months
• Our objective: Unlock the potential for year-round local food production through smart and reliable farming technology.
Common Motivators
• New stream of year-round cashflow• Avoiding seasonality (i.e. seasonal lay-off & retaining best
labourers)• Consumer trends favouring local & “always in season”• Minimizing heating for nursery starts• Diversifying and offering new cultivars• Long-term considerations
– Ecological: resiliency to climate risk & more efficient use of natural resources
– Leveraging existing expertise to leverage technology trends
Standard Process
• Evaluate your assets (i.e. available space, resources, know-how) and market
• Exploration – vertical growing techniques & platforms; level of automation; supplier research
• Business case & financing – Rate of return (ROI)• Project start, evaluation, incremental improvements• Scale
• Insufficient market understanding/research
• Cost of capital• Insufficient technology understanding / supplier
research – particularly marketed vs. achieved results
• Building insufficient capacity/skillsthegrowcer.ca
Common Mistakes
Challenge 1:Market Understanding
• High volume or few cultivars, or too many unfamiliar varieties– Interview current customers; replace standard varieties in volumes the
market is already absorbing– Trial new cultivars over time alongside consumer education
• Choose a size of a project that works for your needs and capacity; scale incrementally– Time to fine tune processes, build capacity– Develop market over time
Challenge 2:Financing/Capital cost
• Vertical farms tend to generate strongcashflow but low-cost financing is critical
• Equipment leasing vs. equipment loan vs.bank loan vs. self-financing• Most suppliers can now able to offer competitive leasing w/o
leveraging existing assets• Balance cost of capital with maintaining your working
capital
Challenge 3:Evaluating technologies
• Consider:– Ease of use / training– Your comfort with technology / level of ongoing
technical support from supplier– Maintenance costs & system reliability– Labour efficiencies– Fit with your business strategy
Challenge 4:Skills and capacity
• Biggest mistake: Too much, too fast• Build a project with familiar attributes to your current operation:
– Same client base;– Same or similar types of crops; or– Similar technology (i.e. hydroponics); and so on.
• Allow for a ramp-up period. With proper support from peers, suppliers, expect:– 2-3 months to reach 80% efficiency,– 6-8 months is normal to reach full efficiency and steady-state
Scaling and otheropportunities
2-container packaging & commercial kitchen module
• Incrementally scale inside a space, or use systems that are modular
• Nursery starts configuration• Specialty crops (i.e. micro-greens,
wild crops)• HRV / waste heat• Light food processing