🇺🇸 My Experience At Indoor AgTech

Earlier last week, I attended Indoor AgTech in Chicago for the third time. As always, I left motivated and inspired by the potential for continued growth in the indoor agriculture industry. The panels provided valuable insights from various perspectives, reflecting the industry's optimism about the current environment.

Despite the lower attendance compared to larger conferences, the caliber of attendees was impressive, with many decision-makers present. The single-track format of the conference facilitated a focused and cohesive experience. Here's a detailed recap of the sessions from the event.

Estimated reading time: 5-7 minutes

Here Are My Main Takeaways:

1. Key Panel Discussions

2. Innovative Solutions and Start-Ups

3. Strategic Insights and Future Directions

4. Concluding Notes

Key Panel Discussions

Growing Market Share: Meeting Consumer Preferences

Panel 1: Moderated by Stephan Dolezalek featured Abby Prior, Viraj Puri, Paul Sellew, and Jed Lynch. The panelists acknowledged recent challenges in financing and investment while highlighting significant industry growth and consumer demand. They emphasized the importance of innovation, efficiency, and strategic expansion to sustain and enhance market presence while also considering potential international opportunities and partnerships to advance the industry further.

Panel 2: Moderated by Tom Stenzel, included Martin Ruebelt, Barry Murchie, and Yan Branco. The discussion focused on consumer-focused strategies, with insights into the Canadian market's embrace of locally grown, pesticide-free products. Yan Branco discussed the positive consumer response to indoor-grown products due to attributes like quality and local production, which resonate well with Canadian shoppers. Barry Murchie elaborated on the potential to replace imported goods with higher quality, longer-lasting alternatives. Martin Ruebelt highlighted NatureSweet's success with branded products, attributing their market penetration to consistency and quality, and discussed innovations like seedless mini sweet peppers that can only be grown in controlled environments.

Welcoming the Indoor Agriculture Ecosystem to Chicago

Deputy Mayor Kenya Merritt highlighted Chicago's strong support for Agtech, emphasizing the city's specialized tech talent. The city's proximity to agricultural land and supporting industries, combined with its extensive network of community gardens and urban farms, fosters innovation and resilience in local food systems. Highlights included the launch of the Grow Greater Englewood marketplace, the development of the $90 million Inglewood Nature Trail project, and significant investments and expansions by Agtech companies like Gotham Greens and Four Star Mushroom.

The Value of CEA Data and Technology

Jen Bromley of Vertical Future discussed the company's evolution from grower to technology developer, emphasizing their end-to-end automated systems, diverse irrigation options, and in-house developed programmable LED lighting. Their proprietary software, Diana, integrates with hardware to optimize growing conditions, enhance yields, and reduce operational costs. Their extensive data lake supports continuous improvement in crop yield, flavor, and nutritional content, extending their impact beyond traditional markets to areas like protein production and forestry.

Harmonizing Site Selection and Facility Design for Optimal Operating Costs

Thomas Parker, Thijs Peekstok, Jessica Naomi Fong, and Chris Evanich discussed the benefits and challenges of co-locating greenhouses with industrial sites to recycle waste heat. Thijs highlighted the need for gradual implementation of new technologies and the importance of adapting existing assets to future innovations. Jessica shared the unique challenges of operating a vertical farm in Hong Kong, such as high energy costs and the necessity of precise site selection to avoid additional cooling expenses. Chris underscored the importance of becoming energy-efficient and right-sizing generation assets to manage the increasing energy costs and grid constraints.

Soft Fruit in CEA: High Margin Crops

Tom Spaulding, Sandro van Kouteren, and Josh Waters highlighted the potential for genetic innovations like seedless blackberries to enhance both consumer appeal and grower economics. Sandro emphasized the importance of starting small and gradually expanding CEA operations, and the need for collaboration with experienced growers. Josh pointed out the supply chain advantages of CEA, such as reduced spoilage and transportation costs, and stressed the importance of educating consumers about the value of CEA products. They collectively underscored the importance of balancing consumer and grower needs, leveraging advanced breeding techniques, and considering the unique demands of different crops in CEA systems.

Automating the Greenhouse from Germination to Packaging

Patrick Borenius, Joe Somford, and Damian Schwarzachel discussed the importance of integrating entire processes rather than isolated automation for higher yields and ROI. Joe highlighted the significance of preparing for future expansions and ensuring space for new technologies. Damian stressed the need for efficient resource utilization and reducing labor dependency through robotization. They also discussed the challenges of data sharing among different systems and the evolving investor perspectives given rising costs and interest rates.

Innovative Solutions and Start-Ups

Tackling Labor and Energy Costs

Willem Kesteloo, Jonel Abdi, and Nicholas Weber showcased innovative solutions in greenhouse coatings, comprehensive automation systems, and spectral filtering technology for greenhouses, addressing the challenge of balancing light for photosynthesis and solar power. Willem highlighted their breakthrough in greenhouse coatings, which improve light diffusion without compromising transmission, resulting in significant yield increases. Jonel presented their comprehensive automation system designed for aeroponics, aquaponics, and hydroponics, which optimizes efficiency and yield through advanced hardware and software integration. Nicholas introduced a novel spectral filtering technology for greenhouses that allows simultaneous energy generation and crop production.

Increasing Product Range and Specialization

Luke Lalire and Rodrigo Santana presented solutions for enhancing specialty and exotic mushroom cultivation and off-season berry production, aiming to capture niche markets and improve yield and quality through gene editing and hybrid growing models. Luke presented solutions for enhancing specialty and exotic mushroom cultivation through turnkey hardware and software systems, aiming to address the challenges faced by North American growers.

Mycologic offers infrastructure with precise environmental controls and plans to provide proprietary substrates, aiming to capture a growing niche market valued at $100 million annually in the U.S. Rodrigo discussed off-season berry production in Canada, focusing on optimizing plant genetics to reduce reliance on imports. With a niche market strategy, BeriTech aims to capitalize on a $1 billion market for blueberries and raspberries, using gene editing and hybrid growing models to improve yield and quality.

Strategic Insights and Future Directions

Investment and Funding Strategies

Rob Dongoski, Nick Houshower, Johanna Waterous, Stephan Dolezalek, and Randall Lewis emphasized the need for clear business models, profitability, and effective risk management. Nick highlighted that investors are now prioritizing mature operations with positive cash flow or those with a well-defined path to profitability, marking a shift from the high-risk, high-reward approach of recent years. Stephan stressed the importance of patience and achieving scale to make a significant impact. Johanna added that investors are looking for opportunities that offer potential for large-scale influence, while Randall underscored the necessity of CEA in addressing global food production challenges, sustainability, and food security. They all collectively agreed that although short-term returns may be constrained, the long-term outlook for the sector is promising due to its essential role in future food production and environmental sustainability.

Sustainability and Carbon Footprint Management

Tom Stenzel, Rob van Straten, and Jon Lomow discussed the importance of sustainability in indoor farming. They focused on carbon footprint management and the use of renewable power. John emphasized the necessity of using renewable power and innovative packaging to reduce reliance on fossil fuels. He highlighted Fieldless's efforts to use Skytree's direct air capture technology for CO2, which Rob explained captures CO2 directly from the air, reducing dependency on fossil fuel-based CO2 sources. They stressed the importance of careful communication about sustainability to avoid greenwashing and emphasized that achieving true sustainability depends on context, such as energy sources and geographical factors.

Conclusion

The two days offered a comprehensive view into the future of CEA. The discussions revealed a sector at a critical juncture, with a clear consensus on the need for strong unit economics, capital efficiency, and strategic partnerships to drive growth.

Despite current financial challenges, optimism for CEA's potential remains high, driven by trends in food security, sustainability, and technological advancements. The event highlighted the critical role of collaboration and strategic thinking in overcoming current obstacles and unlocking the sector's full potential.

Kudos to the Rethink Events team for putting on a world-class event!