Simple Secrets To Start A Vertical Farm
Talking to people just like you, it’s clear that the first step is always the hardest on the road to building a vertical farm. The plunge into the unknown where your own time, capital, and dreams are at risk stops a lot of entrepreneurs from fulfilling their ambition. Fortunately, Matt Farrell took that step for you and tells all in this exclusive interview on the Urban Vertical Project. Keep reading because Matt talks about:
Location, location, location (where to put your vertical farm)
The honest truth about Zip Grow Towers
How much money can you actually make when you start a vertical farm (what restaurants will pay you)
The simple secret of getting customers who pay
I know why taking that first step to start your farm is scary; it means taking a big chance with your time and money to do something that doesn’t really have a standard set of procedures.
I am right there with you. Chances are, if you’ve found this article, you’ve thought about what it takes to make one of these bad boys a reality. Maybe you’ve done some daydreaming or vision boarding, or maybe you’ve even built a small system. In the end, we’ve all probably come across or conjured within our own imaginations an idea for a vertical farm that works, but that’s a far cry from actually making it a reality.
How do you go about doing that? For me, I’m going to follow the process for starting a vertical farm I modeled off another entrepreneur in an earlier article:
Set up a proof of concept
Secure a buyer
Even knowing a structure like that one exists, transforming that to reality is a different story. But, as my favorite (and legendary, if you can believe such a thing) street performer says “It’s better to go out and do something than to stay home and plan something.”
So, I went out and did something. I helped my father buy a bunch of IKEA products and convert them into a hydroponic system for less than $100. It was a start.
Now I’m working on another prototype, and I hope to actually maintain this one. My goal with this next system is to collect and analyze a bunch of data to project future results like yields, energy costs, and calories/square foot. Maybe that will turn into an open source project that people can turn to for up-to-date information, or perhaps it will evolve into a farm in its own right. In addition to that prototype, I’ve been doing tons of research for different people that’s helped them to think about their own, personal businesses and projects.
Even so, if all of my work turns out perfectly, it still exists in a vacuum. Simply put, there isn’t enough information out there to for people to make realistic comparisons or projections for their own farm. Other websites and news articles have featured fantastic farms, ideas, and projects, but there aren’t a lot of actionable numbers. That partly comes from being in an industry that’s too scared to share (something we’ve mentioned before and that projects like MIT CityFarm is working to overcome). That’s why we work so hard to bring you these exclusive interviews and why we get down and geeky – getting the nitty gritty numbers. I want you to have a successful urban vertical farm.
All of that is to say, I’m working on my first step and outlining that process for you. But this article isn’t about just the first step; it’s about revealing the simple truths real farmers know that can help you think more realistically abut your project.
And that’s where Matt Farrell comes in. Matt has been into hydroponics for awhile, but he doesn’t come from any sort of traditionally agricultural background.
He was studying in the School of International Service at American University where he got hit with the idea to help the school build a small hydroponic system. Though the school has taken it down since, his dedication to the idea of local, high efficiency farming has persevered. Now, he’s out on his own running Stag’s Leap Produce. Their tagline:
“Always Fresh. Never From A Shelf.”
The site goes on to explain their goals a bit more: “We want to connect the community to a local source of fresh, organic produce at an affordable price. Come try the freshest, healthiest produce around.”
I’ve known Matt personally for awhile now and he was generous enough to take time out of his busiest growing season to give me some exceptionally candid answers about his experience getting his farm up and running.
In this section, we’re going to take a quick look at why the location of Matt’s farm is so important and why it means you might have more flexibility than you thought in where to put your vertical farm.
Matt is the owner operator of Stag’s Leap Produce in Mullica Hill, New Jersey. Another New Jersey Farm, huh? Just like Freshwater Greens (from an earlier interview), Stag’s Leap produce illustrates a perfect lesson for aspiring vertical farmers to internalize; take advantage of local market access. In addition to supplying local restaurants and businesses (see below for a list Matt shouts out in addition to a local farmers market and customers that come to him directly), being in New Jersey means they potentially have access to the much denser populations in New York and the surrounding cities.
I talk a little bit more about the importance of these population centers combined with available space in the Rust Belt Hypothesis (you guys remember that, right? Probably not, I wouldn’t either, so here’s a link), but Stag’s Leap might demonstrate an alternative, or even start to unravel that hypothesis. Remember, the Rust Belt Hypothesis is the idea is that declining industrial cities are perfect environments for vertical farms because of the inherent socioeconomic conditions there. Those conditions include: population density, existing infrastructure (usually in the form of abandoned warehouses from the manufacturing golden age), cheap energy, local community support (jobs!), and legislative support to revitalize a struggling economy.
But check this out!
Mullica Hills New Jersey is definitely not a Rust Belt City. So, if Stag’s Leap demonstrates that a vertical farm can work in less dense populations like there, that means the demand for these products (fresh, local vegetables available year round) and the expertise required to produce them is even higher than we expected. It means that if farms like Stag’s Leap become the norm, or even just more common, vertical farms will have demonstrated that they can fill needs beyond urban centers. That opens up huge swaths of the country that would otherwise wouldn’t have been considered; well beyond what’s normally considered the Rust Belt as seen below.
And according to Matt, that fits in perfectly with their mission: “We believe you should have the ability to purchase fresh, healthy, produce straight from its source. Without harmful chemicals or pesticides, at an affordable price.”
How is Matt growing food?
But how exactly is Matt meeting this demand? “I grow lettuce, basil, kale and arugula. I have two types of growing systems, Bright Agrotech’s Zip Grow Towers and custom made shallow water floating rafts.”
Essentially, he is using two types of growing systems inside of one 3000 sq ft greenhouse. Zip Grow towers utilize a wicking medium to deliver water and nutrients to plants.
Here’s a video directly from Bright Agrotech that explains in more detail how the Zip Grows work.
The floating rafts Matt describes to me seem like a conventional deep water culture (DWC) setup, though he’s modified this idea a bit by making the reservoirs shallower. I’ll let the folks at Boswyck Farms in New York City describe what that is as they have one of the few hydroponic certifications around and are really knowledgeable growers in general.
[DEEP] WATER CULTURE
Water culture systems are the simplest form of active hydroponics. Plant roots grow directly in the water reservoir and are supplied oxygen with an air pump. Water culture systems can be built from repurposed glass mason jars, plastic buckets, or tubs as the reservoir container, with the plant suspended from the lid in a net pot, letting the roots grow through the holes into the water below.
In larger, commercial scale designs, several plants are placed in a sheet of buoyant material that floats on nutrient solution like a raft. Water is generally held in a separate, larger reservoir and pumped up to the floating grow bed and then drained back down to the reservoir in a constant cycle.
The combination of the Zip Grow towers and his tables allows Matt to maximize the efficiency of all the space in his 3000 sq ft greenhouse. That efficiency comes from incorporating the principles of vertical farming we talk about in this blog.
Remember, the definition of vertical farming is growing on multiple levels. The Zip Grows achieve this by having multiple plant sites on a vertical access hanging down from supports running above the ground. Additionally, Matt stacks his DWC beds to double his production/sq ft when compared to a set up like the one in the photo above. Below is a photo of Matt’s stacked system, which, even in its simple form, doubles his production/sq foot! That’s the power of vertical farming!
I was immediately intrigued about Matt using Zip Grow Towers. Bright Agrotech seems like a great company, but I’d struggled to find an account of using their product that wasn’t tied to their marketing material. I didn’t, and don’t, have any suspicions, but I just wanted to check things out. I’d even flirted with buying a few towers myself to test them out, but Matt’s review of the Zip Grow Towers based off his experience running a real business is even more helpful.
“In the zip grow towers I can plant 6-7 heads of lettuce. But lettuce heads grow much better in raft systems than NTF systems, so we grow our heads in our raft beds now. Each bed is around 4’ by 8’ and we grow 50 lettuce heads in each bed, we also stack our beds twice.“ But, as you can see in the video below (no making fun of the flipped video), those Zip Grows are not wasted.
“Basil, kale and arugula grow well in our Zip Grow towers. We plant 7-8 basil and arugula per tower and 6 kale. In a 10′ by 10′ space we can house about 30 towers. We get around half pound of basil and arugula per tower and we count kale by the leaves so we get around 12 or more mature leaves per tower. We pick our towers continuously so that we are always harvesting from our plants and doing little replanting. With Zip Grow towers the majority of the work is in planting and hanging the towers.“
That breaks down along these lines:
Harvest/Tower (Lettuce)Harvest/Tower (Basil)Harvest/Tower (Kale)7 plants½ pound12 leaves
So Matt is growing through a combination of Zip Grow towers and vertically stacked deep water cultures. We’ve looked at a few different ways to grow produce on this site, but what it really comes down to is how much money you can make off of what you grow. Remember, the incentive to go vertical is to produce more calories/square foot at a lower cost. To quote from our introduction to LEDs:
“In vertical farming, it comes down to producing calories people want to buy (assuming your product is food of course). To make money, you need to produce those calories efficiently.”
How much money can you actually make when you start a vertical farm?
Let’s assume you are producing those calories efficiently.
I asked Matt how he set his price points for the different restaurants he sold to. “So originally we followed bright agro’s models for crop pricing. They host a number of blogs and videos talking about how to price your basil and how to sell you produce and offer very large price points for their crops.” Off the top of his head, he cites “$2.00 an oz for their herbs and I think $3/pound for vegetables.”
If you remember when I talked about actual restaurant pricing here, you’d understand that I had some doubts that these price points were attainable. Matt agreed. “They like to highlight how restaurants will be happy to pay that price in the winter but all of the restaurants I went to were really turned off by these type of high prices.”
This is the main problem I have with purchasing ready-made systems from companies like Bright Agrotech or Freight Farms. This is not to disparage the actual products; not only have I never grown with them commercially myself, all testimony and evidence points to the fact that they work as intended and are examples of superior craftsmanship. However, it is completely fair to challenge the financial information they provide. They are incentivized by increasing sales of their product to use higher-than-realistic prices when they provide which gives the impression that you can pay off the initial investment in their product faster than is actually possible.
Here’s the table from above with Matt’s harvest per tower again.
Harvest/Tower (Lettuce)Harvest/Tower (Basil)Harvest/Tower (Kale)7 plants½ pound12 leaves
Let’s compare those numbers with those that Freight Farms shares. Real quickly, Freight Farms is a buy and farm as-is shipping container modification that also uses Zip Grows. I will note that I reached out to Freight Farms some time ago when I was originally considering investing in one of these and not for the purposes of an article. They were extremely helpful, but I ultimately decided the product was not for me at a $75,000 price point.
Here is the nice spreadsheet that they initially sent along for help with financial and crop planning. For full sized lettuce, they are saying that you can fit slightly more than what Matt was able to fit into one tower, but that may just be attributable to variety. They are also saying you can get 35 lbs/week of basil from a single tower. That doesn’t quite seem to stack up, though it could be the difference between a continual harvest like Matt uses, and harvesting a whole tower at once.
Crop Type # plants per tower Days from seed to first trim/harvest Weekly yield from single-crop farm at full capacity
Baby head lettuce17491050Full-size head lettuce1056500Genovese basil124935Kale104955Swiss chard104950
Anyways, as I said before, the company is super helpful and if you have any concerns, I’m sure they would be happy to address them. We’re going to look a little more at their financial models in a second too, so stick around.
I’m sure that there are examples of farmers getting the price that they advertise or even higher. However, in the interest of giving you an appraisal of the actual options out there for starting your farm, it’s fair to point out that it might always be the case. I definitely do not intend to disparage these companies or their products, and I’m happy to open up a space for them to respond to anything I’ve written.
As my research shows and Matt confirms “At these prices you’re [or a restaurant is] paying $30 a pound for herbs and twice or three times the industry standard for vegetables. Most restaurants simply can’t do those kinds of numbers. For example, most restaurants will pay around $8-12 dollars a pound for basil that they get from Cisco or other big food providers and while their willing to pay a small mark up for basil, the highest I got was $20, it is hard to get business owners to dish out to much money on basil and lettuce if it is breaking the bank.“
It makes it hard for people to make accurate business predictions and decisions based on faulty information. For example, here is a price planning guide Freight Farms uses for its product.
Monthly Revenuecropbaby lettuce4week growth cycle# plants/tower17total plants/week108864no. heads/ case10price per plant$1.50no. cases / harvest100efficiency factorial92%1000.96no. cases/mo433TOTAL REVENUE$6,501.24$78,014.82Monthly ExpensesPkging box $ 0.65Pkging liner $ 0.15Number of farms1Pkg label $ 0.06Site lease $ –TOTAL packaging $ 0.86Licensing and insurance $ –$0AnnualElectricity $ 350.00Water $ 25.00Consummables $ 450.00Wifi data plan $ 99.00Labor $ –$15Hourly wage0hoursPackaging costs $ 372.38TOTAL $ 1,296.38 $ 15,556.56Total w laborMonthly Profit$5,204.86$2,704.86(ANNUAL)$62,458.26
Based on that information, you’d be able to pay of the $75,000 investment in a Freight farm in just 2 years. Not only does that seem a little too good to be true, but if we plug in Matt’s numbers, we get a very different picture. Here are the price points Matt actually advertises when he sells direct to consumers:
Of course, neither Freight Farms nor any other supplier can be expected to anticipate market variance for the entire country. However, I want this information to be out there so you can more accurately make the decision on whether or not these products are right for you to start your business with.
Getting Customers Who Pay
Remember, the three steps to starting your vertical farm are
Proof of concept
2. Secure a buyer
I outline them in more detail here, but I wanted to include them here again to point out getting people who will pay you happens before most of the physical farming at a commercial level begins. Matt didn’t blink when I asked him how he did that and his unflinching attitude is probably one of the reasons Stag’s Leap is still chugging along.
He kept his answer short, too. “I literally just went around to everywhere I could find with a business card and told them I was doing locally grown high value crops. Some people didn’t call me back and others did.“ I can shorten it even more. How do you get people to pay? “Elbow grease.”
A google search is going to blast your screen with thousands of marketing books, articles, blog posts, and everything else that’s going to tell you about building a brand, marketing, and sales tactics. Trust me, I’ve read most of them. But what they all really boil down to is just putting in the work, it’s as simple as that.
Hydroponics versus Soil-based Produce
That work is made a lot easier when you have a quality product to back it up. I still can’t believe how closed minded people still are to hydroponic products. They insist that the best produce comes from soil because it’s natural. Honestly, I just think they have a preconceived picturesque notion of farming in their mind that they are too stubborn to get rid of.
Look, my uncles have owned a restaurant my whole life, and that’s impressive considering most restaurants close within 90% of restaurants close in their first 12 months of opening. I started working there when I was 6 years old and didn’t stop until I went to college. I’ve been cooking my own meals since then (shoutouts to the ginger scallion sauce in the Momofuku cookbook) and gardening for almost that long too. I know what good produce tastes like. I know that it even smells and feels different. And I know that you can get good produce with hydroponic crops because I eat them all the time.
Yet…just try and bring up the idea of vertical hydroponic farming with an organic or permaculture extremist. Even though the ideas are super compatible, it’s still awful.
And frankly, people don’t agree with them. As Matt says “I haven’t come across anyone that has said we can’t grow superior produce with hydroponics, and if I were, I would probably refer them to a number of studies that suggest hydroponics can grow healthier, more flavor produce. [I’d] also give them some of our lettuce to try.”
That’s not just regular Joe-schmoes vouching for Matt’s product either. “The chefs that we work with really like our produce and would probably pay a lot more for our produce if they ran their restaurants. We constantly get great remarks about the lettuce we produce and the quality and flavor of our basil. We have a number of repeat customers that come for our salads and lettuce heads that say we have the freshest and best tasting lettuce around. And that definitely has to do with the fact that we are growing inside and with hydroponics. It really makes the whole production a lot easier and since we are selling locally this allows us to grow lettuce for flavor instead of shipping and shelf life.”
Since Matt is focusing on local food, his produce is so much fresher than anything consumers would be able to buy in a grocery store.
Obviously I’m a fan of holistic farming and permaculture techniques. I’m also a general fan of the USDA Organic Label, even if I think it could be improved. I just think that people need to really think about the type of farming Matt is doing beyond writing him off for trying something new, even if he’s using a manufactured product or, “heaven forbid;” PLASTIC. Especially in comparison to USDA Organic, something as simple as plastic doesn’t have as bad of an environmental impact as the pesticides already in use– natural or not.
Matt and I talked about this as well: “So I think its interesting when people like to contrast holistic farming with vertical farming, or holistic farming with hydroponic farming. When I think about what does holistic mean, I think about what is healthy for the consumer and what is healthy or sustainable for the planet. I think that vertical and hydroponic farming are great in both of those ways. Vertical farming really saves on land, which, as we are having a serious land crisis in terms of farming and are losing a lot of farm land to urban sprawl, is a really sustainable and positive for the future of farming. Hydroponics also allows us to recycle about 70-80 percent of the water we use, reduce the fertilizer we use, and eliminate any runoff from fertilizer. We can also do a lot of traditional holistic methods like companion planting and natural pest control using beneficial insects.”
Those are just a few of the ways to merge ideas that both philosophies espouse.
We wandered through a few different areas in this post. We touched on why vertical farms, if Matt’s is any example, might not be so limited in location than I was writing earlier. We also looked at how Matt is growing his food. He is using a combination of Zip Grow Towers and a custom built, stacked water culture system that allows him to maximize his production in the space.
Then, and perhaps a little controversially, we looked at pricing produce. While Matt is able to get a premium for his product’s freshness and sustainability, he still has the feeling that he’s not hitting the marks companies set for their pre-fabricated products. Not all of the numbers we included were exactly comparable, but they still make the point that you need to do your own market research before basing any business plan on those figures.
Next, we looked briefly into how Matt got customers for his produce before wrapping up by focusing on one of my pet-peeves; the rejection of hydroponic growing techniques by soil fanatics. I think this, along with location planning, is a significant challenge to the adoption of vertical farming technology. Though by no means the most important, it would be great to start doing taste studies along those lines.
This post was jam packed, and I hope you enjoyed it. Besides the great discussion about some of the challenges in vertical farming, I think the biggest take away is the detailed look at potential pricing. “Trust, but verify” as the saying goes.