Speaker 1: Welcome to zero i'm Akshatrati this week, produce profits and perfume.
Speaker 1: Clean tech is a tough industry. Sure, if you invent
Speaker 1: zero carbon tech that's both scalable and cheaper than the
Speaker 1: fossil fuel alternative, you can make billions of dollars, but
Speaker 1: many ambitious green companies struggle to turn a profit. Farming,
Speaker 1: which has been around a whole lot longer than clean tech,
Speaker 1: is also a notoriously hard business to make money from.
Speaker 1: Vertical farming combines both of these things, and the entrepreneurs
Speaker 1: behind it are attempting something extremely difficult, turning what has
Speaker 1: been done forever on the X axis into something on
Speaker 1: the y while also recreating natural conditions such as sunlight, rain,
Speaker 1: and wind in a completely artificial environment. The tech for
Speaker 1: modern day vertical farming was pioneered in the nineteen nineties,
Speaker 1: and it has a big promise if it can be
Speaker 1: successfully scale and that's a big if. It will use
Speaker 1: vastly less land, less water, fewer pesticides and fertilizer. It
Speaker 1: will cut down on shipping, It can be done in
Speaker 1: the heart of cities, and on and on. The environment
Speaker 1: would be perfectly controlled, meaning crops are less likely to
Speaker 1: be affected by storms, droughts, floods, or disease that will
Speaker 1: all become worse as we continue to warm the planet.
Speaker 1: But all of this requires a huge amount of energy
Speaker 1: to replace the sun and recreate what nature gives for free,
Speaker 1: and because energy costs have gone up around the world,
Speaker 1: it is increasingly hard for vertical farms to break even.
Speaker 1: This year has seen several companies enter bankruptcy as they've
Speaker 1: struggled to crack the vertical farming business model. Can you
Speaker 1: do tubers, potato, carrots.
Speaker 2: You can do anything, But do you really think there's
Speaker 2: a finersial equation growing potatoes in or vertical farm.
Speaker 1: I'm not sure. I don't know the economics of lettuce.
Speaker 1: That is giald Dreyfus, the CEO of vertical farming company Jungle,
Speaker 1: based in France, and you can hear he's kind of
Speaker 1: outraged that I would even suggest growing such a low
Speaker 1: value of food because he has to sell premium products
Speaker 1: to turn a profit, and that is where the promise
Speaker 1: of vertical farms falls short. Instead of growing bountiful indoor
Speaker 1: fields of staple crops like wheat, they mostly produce aromatic
Speaker 1: herbs or lettuce. Don't get me wrong, I like lettuce,
Speaker 1: but it's not going to feed the world. I recently
Speaker 1: had the opportunity to visit two different vertical farming startups,
Speaker 1: Jungle in Paris and grow Grace in Singapore, and sat
Speaker 1: down with the founders to learn about why their specific
Speaker 1: way of farming is going to make it what they
Speaker 1: grow instead of potatoes, and the biggest challenges for the
Speaker 1: Indo Street going forward.
Speaker 3: Come closer, Come closer.
Speaker 2: We are in one of the six chambers that we
Speaker 2: have here, and it's a separated climate control, so separated environment.
Speaker 1: That's the voice of Jewel Drapfass again, stopping me getting
Speaker 1: crushed by a giant tray of coriander plants descending from
Speaker 1: high up above me.
Speaker 2: There is six meters by seven, so forty two square
Speaker 2: meter footprints with nine meters high, and on inchside you
Speaker 2: have twenty six layers, so the net cultivation area is
Speaker 2: close to four hundred square meter.
Speaker 1: I'm with Zero's producer Oscar Boyd, a Jungle's vertical farm
Speaker 1: on the outskirts of Paris. It's almost evening and we're
Speaker 1: in the kind of dimly lit purple room that would
Speaker 1: look good in a Drake music video.
Speaker 2: So basically, it's the nighttime they're sleeping.
Speaker 3: Do you sing to them lullabies? Of course, good music
Speaker 3: and lisbon I played the saxophone.
Speaker 2: I was playing saxophone with the plants, and I tend
Speaker 2: to believe that you had a real effect on them.
Speaker 1: In the trees are rows and rows of tiny seedlings
Speaker 1: of aromatic herbs like coriander, basil and Japanese shiso, all
Speaker 1: controlled by a central computer system that is monitoring the
Speaker 1: room's climate. Outside the room, one of the agronomists pushes
Speaker 1: a button and a nozzle floods a tree with water
Speaker 1: and nutrients. Then only the size and how much water.
Speaker 2: You use here in our system we use ninety eight
Speaker 2: percent less water than in a traditional agriculture. We flood
Speaker 2: each plant takes what it needs. We recuperate the water
Speaker 2: so we don't lose anything.
Speaker 1: From above, the growth of each of the plants is
Speaker 1: closely monitored by infrared cameras to check that they're healthy
Speaker 1: and to make sure that the maximum number of crops
Speaker 1: can be harvested each year.
Speaker 2: We can monitor everything that is going on. We know
Speaker 2: from the consider that the two first leaves, how it's
Speaker 2: gonna grow, and then the stem how big it is.
Speaker 2: And from this infrared we know exactly if the plant
Speaker 2: that we're talking about is growing in the right pattern.
Speaker 2: And also we basically gather all these data together to
Speaker 2: make all our cycle better and better.
Speaker 1: This is one of many chambers at Jungle, some of
Speaker 1: which we are allowed in, some of which are off
Speaker 1: limits because of confidentiality agreements. In those chambers, Jungle is
Speaker 1: growing plants to make perfumes for major brands. Each room
Speaker 1: has a different climate to suit the conditions needed for
Speaker 1: the plants growing there. There's also a bunch of warehouse
Speaker 1: space and a dedicated room for germination, the beginning of.
Speaker 2: The life of plant germination room. It's nice, huh should
Speaker 2: we do the interview here?
Speaker 1: It's all very high tech for farming, and it is
Speaker 1: well beyond the pilot stage. There are real plants being
Speaker 1: grown on a real vertical farm that are being sold
Speaker 1: across Europe. But it has taken a long time, a
Speaker 1: lot of effort and a lot of money for Jill
Speaker 1: to get his company this far. As he told me
Speaker 1: when we sat down after our tour of the farm, Jill,
Speaker 1: welcome to the show. Thank you, let's hear the full
Speaker 1: story of your company. When did you first think of
Speaker 1: creating a vertical farming startup?
Speaker 2: So I was working in finance. I was in two
Speaker 2: thousand and fifteen January. I was reading an article about
Speaker 2: the food crisis and how we're going to feed the
Speaker 2: world by two and fifty. This was a double page
Speaker 2: in the Financial Times, and at the end of the
Speaker 2: article there were three lines on vertical farming.
Speaker 3: And I was like, I've never heard about this. It's fascinating.
Speaker 2: So I started researching during nighttime, and then he took
Speaker 2: over my work. I was obsessed. I went to meet
Speaker 2: the father of the concept in New York very soon
Speaker 2: after that, a guy called Dixon de Pomier is an
Speaker 2: emeritus professor from Columbia University, and he took me with
Speaker 2: him the following week to the first world conference on
Speaker 2: the topic in Vegas.
Speaker 3: So we're in twenty fifteen.
Speaker 1: The place that has no water.
Speaker 2: Yes, absolutely, and honestly, the people that were there and
Speaker 2: what I heard made me felt like I was at
Speaker 2: the right place at the right time for the first
Speaker 2: time in my life. So I came back to Paris,
Speaker 2: quit my job and started to travel around the world
Speaker 2: to try to understand what existed. I spent some time
Speaker 2: in Japan, which is the beginning of commercial vertical farming.
Speaker 2: I spent some time in Texas, which was the base
Speaker 2: of the tech for vertical farming, because the LEDs that
Speaker 2: were using in a control environment come from foty years
Speaker 2: of research by NASA that wanted to grow some plants
Speaker 2: in the ISS for astronauts in long missions. And I
Speaker 2: spent obviously a lot of time in New York where
Speaker 2: all the big operations started with arrow farms, Bowery farming.
Speaker 2: I also met my partner there, Nicholas, on the rooftop
Speaker 2: farm by chance. I didn't know him, and we're the
Speaker 2: two French people in this game, and intellectually it clicked
Speaker 2: pretty rapidly, and basically this is how Jungle was born.
Speaker 2: In March twenty sixteen.
Speaker 1: Jill and Esteam initially began research and crops and vertical
Speaker 1: farming methods in Portugal, but in twenty nineteen, with the
Speaker 1: support of French supermarket Monopre, Jungle moved to its current location,
Speaker 1: a four thousand square meter farm just outside Paris. In
Speaker 1: twenty twenty one, it secured a fifty million dollar investment
Speaker 1: to help fund its expansion. You spent three years figuring
Speaker 1: out research and development for one hundred crops that you learn,
Speaker 1: how to grow them in a controlled environment, what to
Speaker 1: feed them. Now you're running a commercial operation. How many
Speaker 1: of those hundred crops do you grow today?
Speaker 2: So we have twelve commercial products out of those hundred,
Speaker 2: and we have eight others that we are commercially active,
Speaker 2: whether it's perfume or cross So commercial active on twenty crops.
Speaker 1: That's okay. So when we think about vertical farming, because
Speaker 1: of the way the plants are grown, where the environment
Speaker 1: is controlled, there is no soil, there's only water and nutrients.
Speaker 1: Does that mean there are certain types of crops that
Speaker 1: can never be made in a vertical farm.
Speaker 2: Economically, you can do whatever you want in a vertical farm.
Speaker 2: It has to make financial sense. It all comes down
Speaker 2: to that. So there's one thing you cannot do with
Speaker 2: truffles because truffles grow in Sorry, but you can do mushrooms.
Speaker 1: Can you do tubers, potato carrots?
Speaker 3: Yeah, you can do anything.
Speaker 2: But do you really think there is a financial equation
Speaker 2: growing potatoes in vertical farm?
Speaker 1: I'm not sure. I don't know the economics of lettuce,
Speaker 1: Is it financially viable growing lettuce?
Speaker 3: And it is basically so is financial viable? What does
Speaker 3: that mean?
Speaker 2: All the companies in vertical farming started and are very
Speaker 2: much focused on aromatic herbs.
Speaker 3: Why is that?
Speaker 2: Because the price hidough of romatic herbs is very high
Speaker 2: because it's a very light product, it has a life
Speaker 2: cycle that is very short, and the morphology of arentatic
Speaker 2: herb is not so high and not so large. So
Speaker 2: basically that city you can have per squameter is very important. Basil,
Speaker 2: for instance, which is our best seller and the best
Speaker 2: seller of most vertical farming companies, and the best place
Speaker 2: which is south front of northern Italy, and it has
Speaker 2: like three or four harvest per year. Here in Jungle
Speaker 2: we do fourteen four zero, no one four. Sorry, that
Speaker 2: would be crazy, that would be a good model. So
Speaker 2: basically what makes it viable is how long is the
Speaker 2: growing cycle, but also how much are you're going to
Speaker 2: sell it? Who you're going to sell it too? Do
Speaker 2: you package it or do you sell it bulk? Because
Speaker 2: this has a big impact on the price. And we're
Speaker 2: never going to do to answer your question, We're never
Speaker 2: going to do fruit trees We're never going to do
Speaker 2: lemon oranges because then the height doesn't make any sense
Speaker 2: where not for now, we're going to do main crops
Speaker 2: such as wheats, soy corn because it doesn't make any sense.
Speaker 2: But maybe one day will.
Speaker 1: So what does make sense? Besides selling aromatic oabs, Jungle
Speaker 1: makes a lot of pets money selling flowers to perfume houses.
Speaker 1: We weren't able to go into the perfume growing rooms,
Speaker 1: but Jill did tell us about the success of one
Speaker 1: particular flower, Lily of the Valley, that the startup is
Speaker 1: growing for the perfume company firm a niche.
Speaker 2: When you talk about perfume or cosmetic, it's a very
Speaker 2: different approach because as we did it with the Lily
Speaker 2: of the Valley, it never existed as a natural compound
Speaker 2: in a perfume. The flowering cycle of Lily of the
Speaker 2: Valley is too short in nature to be extracted. It
Speaker 2: flowers only once a year, between seven to ten days,
Speaker 2: depending on seasons, and an extraction cycle lasts between two
Speaker 2: two three months, so not enough time and not enough quantity. Obviously,
Speaker 2: with our partnership with Filminish, they asked us to try lily.
Speaker 2: We secure the genetics. We did the R and D
Speaker 2: to determine the right recipes and we were able to
Speaker 2: grow them in sufficient quantity so that they could extract,
Speaker 2: because to make an extraction and a viable extraction need
Speaker 2: a lot of biomass. And basically the chromatographic report, the
Speaker 2: toxic report, and the nose to the people who have
Speaker 2: this job said that they never got anything like that
Speaker 2: in their hands. So when you look at this type
Speaker 2: of crop that never existed as natural compound, of course
Speaker 2: the price is much higher because it never had a price,
Speaker 2: so we needed to determine the price. But now, in
Speaker 2: terms of crops for perfuman cosmetics, it varies from a
Speaker 2: few euros to a few thousands of euros per kilo
Speaker 2: per kilo, and a company like FRM and issue our partners,
Speaker 2: they use a thousand, five hundred different variety of crops
Speaker 2: per year and we are eligible in our system of
Speaker 2: twenty five percent of that.
Speaker 3: So basically it's about three hundred plants.
Speaker 1: Plants us of plants, yes, sir, because of the height
Speaker 1: and the requirement.
Speaker 2: Yes, And in those plants you have lidely of the
Speaker 2: value that we created. But also you have mint, you know,
Speaker 2: because these companies, they do flavors and fragrances.
Speaker 3: It's called fn F. It's the industry.
Speaker 2: So they use mint for perfume, but they use also
Speaker 2: meant to create a taste for any product that you
Speaker 2: could find in retail.
Speaker 1: So your business moves from making herbs to actually making
Speaker 1: much high value products. You don't need to make herbs.
Speaker 3: Not exactly.
Speaker 2: We develop strong relationship with customers, so we're happy to
Speaker 2: keep that going and it's part of our revenue, so
Speaker 2: it's important to stabilize that. And if you realize in
Speaker 2: terms of quantity, perfume is one on scale to one
Speaker 2: two hundred, perfume is one, cosmetic is ten, and food
Speaker 2: is one hundred volume in volume, so it's a different
Speaker 2: price structure, but there's also a different volume.
Speaker 3: Is a different business model.
Speaker 2: So we need to carry on growing food, and we
Speaker 2: will carry on growing food, and we want to go
Speaker 2: about R and D to develop a lot of other things.
Speaker 1: And herbs that you produce here and then you sell
Speaker 1: in supermarkets. Are they cheaper than what's already available in
Speaker 1: the supermarket grown in the wild.
Speaker 2: There are the same price as the basic stuff in France.
Speaker 2: And I'm going to talk about France because I've studied
Speaker 2: that market pretty much, so we are entry level price
Speaker 2: for the same weight, but we have virtues of using
Speaker 2: a lot less water, zero pesticide, and lots of taste
Speaker 2: and basically grown locally. So in France, if you want
Speaker 2: to address a market and you're a newcomer, you're not
Speaker 2: going to say, Okay, I have all these virtues and
Speaker 2: I'm going to be more expensive. In the States, it's
Speaker 2: a different game because agriculture is not the same. The
Speaker 2: guys that are producing in vertical farms, they have a
Speaker 2: price premium to their here it doesn't work.
Speaker 1: It's all well and good for vertical farms to grow
Speaker 1: perfume crops and aromatic herbs, but to feed the world
Speaker 1: they'll need to start growing staples like wheat, soy and corn.
Speaker 1: On this front, there has been some progress. In November
Speaker 1: last year, an Amsterdam paced startup called Infarm managed to
Speaker 1: grow wheat for the first time, and it said they
Speaker 1: could grow six harvests a year, compared with just one
Speaker 1: in open field farming. However, that same startup closed down
Speaker 1: is European Operations earlier this summer. Jeal compares progress and
Speaker 1: vertical farming to the recent history of another green industry
Speaker 1: with well documented boom and bus cycles, the solar industry.
Speaker 2: Vertico farming could have a parallel with the renewable energy sector.
Speaker 2: With those solar power energy Why in the beginning of
Speaker 2: the two thousand you had a solar panel that was expensive,
Speaker 2: that was heavy, and through innovation investment, in time, it
Speaker 2: became profitable. Africo farming is exactly the same. You're going
Speaker 2: to have a machine. The capex of the machine is
Speaker 2: going to be divided by two or go even lower
Speaker 2: than that. The output that we get today a jungle
Speaker 2: we have between forty five to fifty five kilo of
Speaker 2: biomass per square meter preur. This could go to eighty
Speaker 2: one hundred or even above one hundred kidos. So many
Speaker 2: crops that were not profitable are going to become profitable.
Speaker 2: So we're talking about tomatoes, raspberries, strawberries, and also cucumbers, zucchinis.
Speaker 2: Chilis basically between fifty to sixty percent of anything that
Speaker 2: you can find in the supermarket, and we can go
Speaker 2: even beyond that.
Speaker 1: Thank you for the turn, for the conversation.
Speaker 3: Thank you.
Speaker 1: A lot will need to go right for vertical farms
Speaker 1: to scale up globally, but advances are being made and
Speaker 1: vertical farming is being tested right around the world. There
Speaker 1: are now farms in Japan, Saudi Arabia, the Netherlands, the
Speaker 1: US and other places. And when you talk to people
Speaker 1: about why vertical farming is important, one reason you're often
Speaker 1: hear is reducing water consumption. The closed loop environment means
Speaker 1: that water can be recycled and reused. Another is improving
Speaker 1: food security, especially in smaller countries that have little land
Speaker 1: available for farming and who rely heavily on food imports.
Speaker 1: On my recent tour of startups in Asia, I was
Speaker 1: able to visit a second vertical farm in Singapore, a
Speaker 1: country that is one hundred percent urban that's coming up
Speaker 1: after the break.
Speaker 4: So would you like to guess how much letters we
Speaker 4: have us every week? Now?
Speaker 1: I'm in Singapore talking with Graycelip, a co founder of
Speaker 1: grow Grace that opened its first proof of concept vertical
Speaker 1: farm in summer twenty twenty. To even for an untrained eye,
Speaker 1: there are some physical differences between this farm and the
Speaker 1: one I saw in Paris. What's being grown is a
Speaker 1: little bit different. The trays are larger, there's more vertical
Speaker 1: space between them. But technology wise, it's a similar idea.
Speaker 1: Grow Grace is growing a lot of lettuce, so much
Speaker 1: that Grace has found it hard to find enough buyers.
Speaker 4: Right, So, assuming that all the letters weigh two hundred grams,
Speaker 4: how much do you think we have us every week?
Speaker 1: One term?
Speaker 4: Okay, so we have us one point two times every week,
Speaker 4: so there is yes, very good. Actually actually not many
Speaker 4: people get so close. A lot of people will say that, okay,
Speaker 4: three hundred.
Speaker 1: Cag So it seems I'm good at guessing the volume
Speaker 1: of things. It's a side benefit maybe of spending years
Speaker 1: in a chemistry lab. Anyway, that is a lot of lettuce.
Speaker 1: And even though Grace does have some buyers, she told
Speaker 1: me how difficult it is to turn a profit.
Speaker 4: So there is about six thousand hits of letters every week,
Speaker 4: and that's a lot of lettice. Which is why I
Speaker 4: have trouble bringing this farm to profitability because it takes
Speaker 4: a long time for us to establish a relationship with
Speaker 4: a buyer.
Speaker 1: Right.
Speaker 4: And then also at the same time, even if this
Speaker 4: buyers want to support me, they cannot buy more of
Speaker 4: one variety, but they can support different crops that I grow.
Speaker 4: So which is why R and D is very important.
Speaker 1: Finally, on the tour, Grace showed us the rainwater that
Speaker 1: they harvest.
Speaker 4: So this farm utilizes one hundred percent rainwater, and that
Speaker 4: is our sixteen cubic meter rainwater harvesting tank.
Speaker 1: And the rainword that's being harvested is on the roof
Speaker 1: of this building.
Speaker 4: That's right, It's from the roof of this building.
Speaker 2: Yeah.
Speaker 4: Right. So in Singapore, harvesting rainwater is illegal. You need
Speaker 4: a special license to harvest raamwater because if everybody starts
Speaker 4: to harvest rainwater commercially, then our reservoir will be empty.
Speaker 1: What did you have to do to get a license
Speaker 1: for rainwater.
Speaker 4: Highway, Well, basically you have to fill up a lot
Speaker 4: of farms and submitted to.
Speaker 1: Pub pub or the Public Utilities Board is the water
Speaker 1: authority in Singapore, and Grace's application was approved. The government
Speaker 1: of Singapore has a lot of incentive to reduce food
Speaker 1: and water imports because currently it imports over ninety percent
Speaker 1: of its food and more than half of its water.
Speaker 1: The island also doesn't have much land to grow crops.
Speaker 1: That's one of the many things Grace and I talked
Speaker 1: about after the door Grace, Welcome to the show.
Speaker 4: Thank you very much.
Speaker 1: Akshat. You have been operating this vertical farm for the
Speaker 1: past year. Almost just walk us through the story of
Speaker 1: how you got into vertical farming.
Speaker 4: Okay, so this happened I think quite many years ago
Speaker 4: when I was a mother raising young children, and I
Speaker 4: remember being very concerned about what I feed to my children.
Speaker 4: So I was giving them a lot of vegetables, thinking
Speaker 4: that it's very good for them. And at some point
Speaker 4: I came to realize that a lot of these vegetables
Speaker 4: that I've been feeding my children are coming from countries
Speaker 4: which grow them using a lot of pesticize. So that
Speaker 4: made me really angry and really sad. So then I
Speaker 4: decided to grow my own vegetables at home, and at
Speaker 4: one time I was growing thirty six different types of vegetables.
Speaker 4: So one day I was harvesting kill with my son,
Speaker 4: and we harvested two big baskets of kill and we
Speaker 4: started juicing them and making them do kill chips, and
Speaker 4: I remember at that moment, I experienced immense joy in
Speaker 4: my heart because I was feeding my children clean, healthy
Speaker 4: produce that we grew in my own garden. And at
Speaker 4: the moment I had an epiphany and I told myself
Speaker 4: how wonderful it would be if I can bring this clean,
Speaker 4: nutritious food to fellow singapore Rans.
Speaker 1: And the farm that you ended up building cost about
Speaker 1: three million Singapore dollars and you had to bring in
Speaker 1: a number of partners to be able to build it.
Speaker 1: What was the challenge and who were these partners?
Speaker 4: Yeah, so I formed a company with my two sisters,
Speaker 4: but they're just sleeping shareholders and we're putting some money there.
Speaker 4: And also my Dutch partners, so they are a consortium,
Speaker 4: so they came in as a single shareholder. But the
Speaker 4: Dutch consortium consists of a few parties.
Speaker 1: The Dutch Consortium back in grow Grace includes eight companies
Speaker 1: whose expertise is in various aspects of vertical farming, lighting,
Speaker 1: climate control, seeds and growing materials.
Speaker 4: The farm costs three million dollars to build, but we
Speaker 4: do have support from Singapofoo agency as well.
Speaker 1: And why was it that the Dutch consortium was so
Speaker 1: crucial for your farm?
Speaker 4: So when I wanted to do this project, I did
Speaker 4: a lot of research and I've learned that the Dutch
Speaker 4: hour world leaders in agriculture innovation. The Netherlands is the
Speaker 4: second largest exporter of vegetables to the rest of the world.
Speaker 4: So when I wanted to do this, I knew I
Speaker 4: only wanted to partner with the best in class and
Speaker 4: it's Dutch technologies. And indeed, I wouldn't compromise the type
Speaker 4: of technology that I would use in the farm because
Speaker 4: everyone can grow, including myself and grow thirty six different
Speaker 4: types of vegetables in my garden. But how much can
Speaker 4: you grow? What is your eel, what is the quality
Speaker 4: of your produce? And are you able to grow consistently?
Speaker 4: Are you able to grow in an energy efficient and
Speaker 4: what efficient way? That's a whole different ball game, right
Speaker 4: And for me, the technology play a critical role, which
Speaker 4: is why the Dutch involvement is very important for me
Speaker 4: in this project.
Speaker 1: And the technology you use with your Dutch partners is
Speaker 1: a bit different from the technology that is used in
Speaker 1: most vertical farms. But recently there have been a spate
Speaker 1: of vertical farms going bankrupt. Why are you confident that
Speaker 1: what you are doing how will succeed?
Speaker 4: One thing that we have done differently from these all
Speaker 4: these other indoor farms or the indoor farms that have
Speaker 4: not been successful is that we do not create our
Speaker 4: own technologies. We work with technologies that have been proven
Speaker 4: to be very successful all over you, Europe and America
Speaker 4: in greenhouse environment. So these technologies have already been used
Speaker 4: in greenhouses for decades and they have been growing tons
Speaker 4: of food very successfully. And what we did was bring
Speaker 4: these proven and patented technologies to Singapore and we integrate
Speaker 4: them using local engineering and construction expertise into an indoor
Speaker 4: vertical environment. Based on my understanding and from what my
Speaker 4: Dutch partners and I have investigated, a lot of these
Speaker 4: indoor farms that failed put their own technologies together. And
Speaker 4: technologies take time to mature, and when you put something
Speaker 4: new together, you have to constantly tweak it. You know,
Speaker 4: you have maintenance issues, your reaction time may not be
Speaker 4: as fast because you're not familiar with it. So it
Speaker 4: takes time to mature. And I think because of that,
Speaker 4: they just run out of funds to further improve.
Speaker 1: On the tech. Grow Grace uses technology from a Dutch
Speaker 1: company called Dry Hydroponics. The name of the company is
Speaker 1: also the name of the technology, and it may sound
Speaker 1: a little like an oxymoron. The dry part is that
Speaker 1: until the roots grow, they don't have constant contact with water.
Speaker 1: That's the difference between grow Grace and other vertical farms,
Speaker 1: and that intervention early in the life of the plant,
Speaker 1: according to Grace, forces the plant to use less water
Speaker 1: as it grows. The plant starts off in a substrate
Speaker 1: made from a mixture of peat and is flooded with
Speaker 1: artificial light. It's all minimal from a material's point of view.
Speaker 1: One of the reasons why vertical farms have been going
Speaker 1: bankrupt is because the produce they make does not generate
Speaker 1: as much revenue as they need to be able to
Speaker 1: pay for all the energy and all the equipment that
Speaker 1: they have spent money on. So what is it that
Speaker 1: you are growing and are you able to make money?
Speaker 4: So growing indoor is definitely much more expensive than growing
Speaker 4: in a greenhouse or growing in an open field, But
Speaker 4: being able to grow indoor means that we think control
Speaker 4: all the growing parameters. And when we can control all
Speaker 4: the growing parameters, we're talking about precision farming, and that
Speaker 4: is when you can grow perfect heits of lattices, perfect crops,
Speaker 4: and these perfect crops, in my opinion, are considered premium produce.
Speaker 4: And when it's premium produced, you can command a premium price,
Speaker 4: even though this is not my vision, because my vision
Speaker 4: is to be able to grow premium crops that is
Speaker 4: also affordable to Heartlanders. Unfortunately, at this point we are
Speaker 4: paying sky hair energy prices, so we cannot afford to
Speaker 4: do that. But I totally see that this sceneio will
Speaker 4: change in the near future if we're able to tap
Speaker 4: on renewable energy. Meanwhile, yes, we have to sell this
Speaker 4: as premium crops for a premium price, and there is
Speaker 4: a demand for premium produce in Singapore because we are
Speaker 4: importing a lot of premium produce from Japan, from Korea,
Speaker 4: from Australia and from Europe. And my intention for grow
Speaker 4: grades one, which is this farm that you visited, is
Speaker 4: to just replace these imports from these countries that I've
Speaker 4: just listed.
Speaker 1: And roughly, if you were to split the costs of
Speaker 1: running the plant, how much is it energy, how much
Speaker 1: is it labor, how much is it equipment?
Speaker 4: Okay, so unfortunately energy comprises fifty percent of the overall
Speaker 4: cost of production and labor twenty five percent, and the
Speaker 4: other twenty five percent is neutrons sees maintenance at hot repairs.
Speaker 1: So this is a pilot firm and you have plans
Speaker 1: to expand it, right.
Speaker 4: Yes, so this is our proof of concept and obviously
Speaker 4: it has proven to be very successful. So right now
Speaker 4: I need to prove the value of the farm. This
Speaker 4: is where I have to work really hard on sales,
Speaker 4: sell all the produce with a margin, and then from
Speaker 4: there I can attract investors to invest in an expanded
Speaker 4: or rather than upscale goog gries too, which I've intended
Speaker 4: to build just next to the existing firm. So it
Speaker 4: is very import for me to build a much bigger
Speaker 4: farm because we started this company to contribute to food security.
Speaker 4: We want to be able to grow to bring a
Speaker 4: significant impact to Singapore, and our vision really is to
Speaker 4: turn growing cities into thriving farms. We want to be
Speaker 4: able to build a big indoor farm in every city center,
Speaker 4: starting with Asia. Right so, yes, we want to build
Speaker 4: upskill farm. But before we can do that, we need
Speaker 4: to take the learnings from building this first farm into
Speaker 4: the design and engineering of the second farm. Even though
Speaker 4: grow Grace is a great farm, but we have learned
Speaker 4: that we can further optimize it for it to be
Speaker 4: more efficient, more energy efficient, operationally, more efficient as well,
Speaker 4: and in order to do this study, in order to
Speaker 4: do this value engineering, we need to put together a
Speaker 4: technical committee, you know, to study the lesson that we
Speaker 4: have learned, where we build this POC, this proof of concept,
Speaker 4: and for that we will require investment money.
Speaker 1: So right now you're trying to raise money.
Speaker 4: Yes, we are trying to raise five million dollars for
Speaker 4: a stick in the company.
Speaker 1: Yeah.
Speaker 4: So, and I really want to attract investors who believe
Speaker 4: in our vision, who believe that the future of farming
Speaker 4: is indoor, who want to bring food security to cities,
Speaker 4: and who want to contribute to sustainable agriculture.
Speaker 1: The substrate you use is pete moss and other organics.
Speaker 1: Where does it come from? Because pete itself is not
Speaker 1: a sustainable material.
Speaker 4: I have been looking into this as well, and I
Speaker 4: have been speaking to the founder of dry Hydroponics, who
Speaker 4: is the designer of the recipe for this substrate. And
Speaker 4: at this moment, I don't have an answer for you,
Speaker 4: but we are looking for a more sustainable ingredient for
Speaker 4: the substrate.
Speaker 1: Bloomberg Greens. Shay Lee, who's based in Singapore, was with
Speaker 1: me on the grow Grace store. She asked how much
Speaker 1: produce grow grape sells each month and what amount they
Speaker 1: need to sell to be profitable.
Speaker 4: So I'm able to sell fifty percent of the produce,
Speaker 4: unfortunately at a loss, because when I started growing in November,
Speaker 4: I need to find a buyer very quickly just to
Speaker 4: cover costs, right, So I was able to find a
Speaker 4: buyer to oft take half of the harvest, which is
Speaker 4: about six hundred kg, but I'm selling it at a loss,
Speaker 4: and then the other half I would say I'm so far,
Speaker 4: I'm able to sell twenty five percent at a profit
Speaker 4: and the other twenty five percent of the harvest are
Speaker 4: still unsold. And my plan, my strategy is to be
Speaker 4: able to offer more crops to buyers, because it makes
Speaker 4: total sense that one buyer cannot buy more of one
Speaker 4: crop from you, but they can buy more varieties from you.
Speaker 4: So I know that my current buyers are very supportive
Speaker 4: of grew grays, and what I have to do is
Speaker 4: just to offer them different products, different crops, and that's
Speaker 4: some that I'm working very hard on, which is why
Speaker 4: we are experimenting. We're doing R and D every few
Speaker 4: months for new crops.
Speaker 1: And when do you expect to break even if.
Speaker 4: I'm able to sell all my crops at a profit,
Speaker 4: which I'm working towards. I foresee that we will be
Speaker 4: able to be profitable in the first quarter of twenty four.
Speaker 1: Right, So that's breaking even within two years of building it.
Speaker 4: No, no, no, not breaking even, but to have the farm stop
Speaker 4: bleeding and start seeing some money coming in. Yeah, but
Speaker 4: breaking even is going to take years.
Speaker 1: Okay, Yeah, thank you so much, Thank you so much.
Speaker 1: There's a logical alleo to the idea of vertical farming.
Speaker 1: Saving on water, soil, and land is a crucial climate solution,
Speaker 1: as we learn from George Monbio in an episode we
Speaker 1: ran a few weeks back. Vertical farming also evokes a
Speaker 1: utopian science fiction world, one that we expect future humans need.
Speaker 1: But figuring out the business model right now is not straightforward.
Speaker 1: It will need the persistence of people like Shiel and
Speaker 1: Grace to crack it. Thanks so much for listening to Zero.
Speaker 1: If you want to check out some of the reporting
Speaker 1: on green tech from my trip to Singapore, it is
Speaker 1: linked in the show notes. If you liked this episode,
Speaker 1: please take a moment to rate and review it, subscribe
Speaker 1: on Apple Podcasts or Spotify, Send it to a friend
Speaker 1: or someone who eats a lot of leafy greens. Get
Speaker 1: in touch at zero pod at Bloomberg dot Net. Zero's
Speaker 1: producer is Oscar Boyd and senior producer is Christine Driskell.
Speaker 1: Our theme music is composed by Wonderly Special thanks this
Speaker 1: week to Cheryl Lee, Natasha White, and Kira binrim i'm
Speaker 1: Akshatrati back next week.