Published in Food/Agribusiness
Square Roots CEO Tobias Peggs said the company’s project at Gordon Food Service’s headquarters is part of its ambitious growth plans to grow fresh food close to where people live. Square Roots CEO Tobias Peggs said the company’s project at Gordon Food Service’s headquarters is part of its ambitious growth plans to grow fresh food close to where people live. COURTESY PHOTO

Startups move indoors in race to find future farming solutions

BY Sunday, October 13, 2019 09:00pm

Traditional, outdoor agriculture is profoundly dependent on climate, but high-tech indoor farms that grow premium, hyper-local produce for consumers year round may be commercially viable in the future.

This year, Michigan farmers were among the hardest hit in the nation by heavy rains and intense flooding conditions. According to data from the U.S. Department of Agriculture, growers were unable to plant crops on 19.4 million acres as a result, with more than 73 percent of those acres coming from states in the Midwest. 

Increases in the frequency or intensity of some extreme weather events associated with climate change will disrupt food production and prices in the future, according to research from the U.S. Global Change Research Program. Other stressors — such as population growth and urbanization — may magnify the effects, according to the data. 

One solution being tested in academia and the consumer marketplace is “smart” indoor farms, where plants grow without dependency on the natural climate at all. Plants in indoor facilities can be grown with or without soil via hydroponics, like the system used at the high-tech operation that opened last month at the headquarters of Gordon Food Service Inc. (GFS) in Wyoming, just south of Grand Rapids. 

So far, some foods have been commercially grown in specialized indoor climates — a sign that the future of farming may be less dependent on rain, soil and even the sun — although costs are high and the range of food is limited.

“Indoor farming is taking what we’ve learned from greenhouse production, but then advancing it to the next step,” said Erik Runkle, a professor in the Department of Horticulture at Michigan State University. “It’s taking (growing) from a very uncontrolled situation in a field and going to an indoor facility where you pretty much control all of it unless you have a power failure.” 

Runkle, who has been studying lighting and growing ornamental plants indoors for the past four years, said the “newest trends” in indoor agriculture are testing the profitability of crops grown in urban facilities or frigid, remote climates like those found in regions of the Arctic and Alaska. 

“There are some high-value applications where we think that there is opportunity to profitably produce some of these types of crops,” Runkle said. 

Recreatingclimates

The project at GFS is a partnership between the privately-held and family-managed foodservice distributor and Brooklyn, N.Y.-based Square Roots Urban Growers Inc.

The farm, which consists of 10 “Climate Containers,” or repurposed shipping containers, is sited on less than two acres of the GFS property. It was almost immediately in production following the completion of construction, according to Square Roots co-founder and CEO Tobias Peggs. 

Commercial chef customers of GFS were able to sample indoor-grown basil from the facility during its grand opening week; the first orders will go out in November.

The cloud-connected, modular, indoor farm design uses a water efficient system along with vertical growing walls, a process that requires significantly less resources and space than outdoor or greenhouse farms. With sophisticated, digitally-controlled hydroponics and LED lighting, the units are projected to produce more than 50,000 pounds of pesticide-free and non-GMO herbs and greens annually — roughly the equivalent production of a traditional 50-acre farm. 

“If we want to grow basil, we’ll study the climate in the northwest of Italy at peak basil growing season,” Peggs said, noting the environmental studies include variables like humidity, temperature, CO2 level, dawn and dusk. 

“All of these factors will then recreate that climate inside one of these boxes so it’s peak basil season, but we’re able to do that all year,” he added. 

Peggs declined to disclose how much the companies have invested in the new facility, but did say that ultimately, the speed of further development will be based on the market. 

“It really depends on customer demand,” Peggs said. “Over time, you’ll see us grow a much wider variety of crops on a commercial scale, not just an R&D scale that we’re doing today.” 

Serving needs

Although the Grand Rapids facility is only growing basil at the moment, its grand opening comes with a much larger ambition to build indoor farms across the continent, according to Peggs, who founded Square Roots along with entrepreneur and restaurateur Kimbal Musk, the brother of Tesla Inc. CEO Elon Musk. 

“The mission of Square Roots is to bring locally grown food to as many people as possible all around the world,” Peggs said. 

In the “not that far away” year of 2050, the world population will be hovering around 10 billion — 3 billion more than today — and a majority of people will live in cities that will have an increased demand for food, according to Peggs. 

“By 2050, 70 percent of those 10 billion people will live in urban areas,” he said. “So if you’ve got this growing population that is urbanizing very quickly and at the same time people want local food, then you have really got to start to figure out how to build farms in the middle of the city where people live.” 

A similar mission is being played out at Caledonia-based Revolution Farms LLC, which operates an 85,000-square-foot indoor hydroponic farm that’s capable of producing more than 500,000 pounds of fresh lettuce and salad greens annually. Founders Brewing Co. Executive Chairman John Green, an early investor in Revolution Farms, took over as CEO of the company last month, as MiBiz previously reported. 

“Indoor farming is going to grow in popularity. It’s just good for everyone,” Green said at the time. 

Revolution Farms-grown lettuce is currently available in Michigan at more than 100 SpartanNash Co. stores, via the Doorganics LLC delivery service, and from VanEerden Foodservice at restaurants.

Growth ambitions

GFS and Square Roots predict their partnership will ultimately see new campuses of indoor farms built on or near GFS commercial distribution centers throughout North America and the company’s 175 retail stores, enabling year-round local produce availability for commercial chefs and consumers.

As the network of farms grows larger, it also will get smarter because more connected farms mean more feedback loops, increasing the rate of learning exponentially, Peggs said. 

However, beyond herbs and leafy greens, indoor stacks of vertical, hydroponic gardens may not offer the future promised land for food, according to MSU’s Runkle.

“Sometimes, people talk about indoor farming like we’re going to be able to feed the increasing number of people in this world by growing plants indoors, and that’s simply not realistic,” he said. 

Right now, economic viability is the primary barrier to indoor farming for the majority of produce that consumers want, according to Runkle. 

“We know we can grow any plant indoors. The question is: Can we do it economically?” he said. 

Recently, Runkle received federal funding to study the economics as well as capital and operational expenditures of indoor farming, in particular for leafy greens. The study will dissect the current costs of growing produce to unlock potential opportunities to make it more affordable or determine the future marketability of an indoor crop. 

For example, since water remains a relatively inexpensive resource right now, even in the strawberry fields of Arizona, growers can use it inefficiently and still offer competitive prices. However, if water were to become less accessible, efficient operations like indoor farms may find a more strategic place in the market, even if the end product becomes more expensive for the consumer. 

The potential for greater growth — and ultimately, more food — may be rooted in transitional growing practices that use a combination of indoor, greenhouse and field farming, according to Runkle. The system would have the potential to take advantage of the uniformity and quality of hyper-controlled indoor growing while utilizing the field during periods when production costs need to remain significantly lower.

“I view indoor farming as a complement to what’s already being done,” Runkle said. “At least in the near future, it’s going to be for niches.” 

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