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For A Successful Vertical Farming Tech Business Put Farming First

If you wish to sell technology to verticals like healthcare and education, you have to learn to push technology to the background. What is more important is to understand the market, sync with its psyche and build a mutual trust with the customer base. Technology will automatically fall into place and earn you the due profits.

Well, the emerging space of vertical (indoor) farming is no different. Although a lot of exciting technology goes into controlling the environment and managing the crop, the key to succeeding in this business relies on how well you are able to forget that you are a technologist and focus on the farming requirements instead, so you can eventually provide the customer with the right amount of the right tech. Overdo it, and you will not get your next customer!

Getting down to business

Vertical farming seems to be a fast emerging business worldwide, especially in urban areas that yearn for safe, organic and fresh food. The modern notion of vertical farming or controlled-environment farming involves growing crops and sometimes even fish and other food products in indoor spaces, using technology like LED lighting, heating, ventilation and air-conditioning (HVAC) systems, sensors and smart software to maintain total control over the environment.

Growing crops vertically in trays at Spread, Japan (Image courtesy: Spread Co. Ltd)

“The Internet of Things (IoT), drones, mobile apps and social technologies can be brought together to create value concepts that empower farmers with timely information about crop cycles and health. This is pertinent in the context of indoor vertical farming since walking around to check how things are, is rarely an option. Data-driven knowledge, delivered in real time and based on location context is what farmers will need for making decisions in almost the same way that the Japanese made an art of just-in-time (JIT) manufacturing, since Japan lacked space to build big factories loaded with inventory,” adds Sunil Malhotra, chief executive officer of Ideafarms, an Indian design-in-tech company focused on innovation and social impact.

Vertical farms grow food in such tech-enabled setups and take it to the market through regular supply chains. Over time, they become preferred vendors because their food is organic, of high quality and the supply is predictable. Several tech-enabled vertical farms have proven to be successful. Some examples include Aerofarms and Green Sense in the USA; Deliscious in The Netherlands; Sharp’s strawberry farm in Dubai; Spread, Toshiba and over 100-plus vertical farms in Japan; and not to forget Packet Greens of Singapore. According to news reports, vertical farming is doing well in Singapore. In the past decade, the number of licensed vertical farms there has risen from one to seven.

This emerging vertical opens up several business opportunities for technopreneurs. One of the most obvious options is to set up a tech-enabled vertical farm, grow stuff and sell it, like Aerofarms and Spread. Other options include designing and implementing tech solutions for emerging vertical farms, or selling individual technologies for the same.

Off-the-shelf products for individuals and farms. Developing a vertical farming solution need not necessarily be complex. Look at what Bengaluru based startup Greenopia has done. They sell kits with smart self-watering pots, enriched soil and the right seeds. The sensor-embedded pots replenish moisture in the soil on a need basis, and notify you when you need to refill water externally (once in a few days).

The solution comes with a mobile app, which not only helps you be in control of your plants—be it flowers or herbs—but also share information with a growing community. For example, if somebody has managed to consistently grow the perfect mint in their kitchen garden, they can share the parameters that led to the perfect crop, so others can replicate it.

You could start with a simple product and, as your business gains traction, you could expand your portfolio with more products. One well-known example of this model is Wyoming (USA) based Bright AgroTech. They sell a variety of technology products ranging from vertical growing towers and LED lights to software. They also offer consultation, which is very important for a nascent vertical like this.

Focusing on one of the supporting technologies. You can develop and sell solutions focused on any one aspect of vertical farming, like air-conditioning, lighting or intelligence. However, you need to think carefully before entering into a business that covers only one tech component, because your success might depend on the availability of other supporting technologies in that region.

In most cases, you might have to supply your tech to a larger player, who offers an end-to-end platform. That is, you become a vendor. Plus, in an emerging market like India, you cannot expect a large enough market to sustain your business if you plan to sell only to vertical farmers. This option makes sense if vertical farming is a logical extension to an already existing product line; like when Philips or Illumitex forayed into horticultural lighting solutions.

Platform approach. A more holistic business would be to aggregate all the technologies required for vertical farming onto one platform. To achieve this, you would have to put together a multi-disciplinary team to design and implement the solution. When doing so, it is clear that you cannot succeed if you focus only on technology aspects. You need to pay more attention to farming aspects and use technology as it is meant to be—merely an enabler.

Dr Dickson Despommier, author of The Vertical Farm, hits the nail on the head, when he says, “Chances are, none of the fanciful, futuristic Jetsons vertical farms that you will find on Google Images [will] be built, as they are not considering the reality of farming on a commercial scale. Many of these designs are proposed by architects and designers, not the farmers themselves.”

So if you want to succeed, ensure that your team has a farmer or two. This is a good business model, which has worked for companies like Houston (USA) based Indoor Harvest Corp. They partner with companies like Illumitex, Dosatron and Hort Americas to work out all aspects of a vertical farm, right from watering, nutrient delivery, lighting and HVAC, to constructing expandable and upgradable modular infrastructure to house it all.

Technology as a service. Vertical farming need not always be on a commercial scale, conducted in specially-architected greenhouses. It can even be done in a common room, on the terrace or basement of an apartment complex, office or factory, just growing enough to feed the folks who live or work there.

However, if you look at the time-pressed urban population, they will hardly be motivated to implement vertical farming if its maintenance is too tiresome. So Sanjay Aggarwal, founder and chief executive officer of Clover Organic, a pioneer in vertical farming in India, suggests, “It would make sense for a person to sell the infrastructure and then charge a monthly fee for looking after the infrastructure.”

This kind of facility would also be very helpful for a traditional farmer who decides to try out vertical farming. The farmer might be great at farming, but might not know technology. So if you are able to install and maintain the tech infrastructure, the farmer can put his farming knowledge to great use.

Set an example and sell the tech. Factory farming seems to be the fad now. Tech industry majors like Toshiba, Sharp and Fujitsu are all into vertical farming. Fujitsu grows lettuce in a former silicon chip manufacturing plant, and Sharp grows strawberries in Dubai.

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