Startup Profile: AeroFarms: Urban Agriculture Aeroponic Systems
March 29, 2011 | Robert Puro
People are moving in ever increasing numbers from rural areas into urban city centers. Global population is expected to increase by nearly 40% to 9 billion people in the next 40 years. Threats to agriculture from climate change, loss of arable land, pesticide resistance, and water shortages continue to grow more acute. As noted in our previous article “Urban and Agriculture Can Coexist,” cities and their attendant entrepreneurs will need to embrace urban agriculture in order to meet this future demand for food and ensure food security.
Seedstock recently spoke with Ed Harwood, CEO of AeroFarms, whose company has created an aeroponic growing system (a controlled environmental agriculture system that grows produce without soil and without sun, all year round and in any location) with the potential to revolutionize and jumpstart the nascent urban agriculture movement and help to sustainably meet the food needs of a growing world.
In case you didn’t know, aeroponics is the process of growing plants in an air or mist environment without the use of soil or an aggregate medium. Aeroponic growing systems, which leverage carbon dioxide from the air, nutrient infused water in the form of mist delivered to plant roots, and a light source either artificial (fluorescent, LED, etc.) or from the sun to enable plant growth can be located indoors inside of a building, underground, and stacked on top of one another.
The basic requirements for a facility housing an aeroponic system are that it maintains a humidity level under 70% and temperatures appropriate to the crops being grown, and that it supplies a sufficient amount of fresh air to keep carbon dioxide levels high.
The origin of AeroFarms
Prior to running AeroFarms, Harwood was Associate Director of Cornell Cooperative Extension for Agriculture. The job required that he investigate cutting edge farming technologies and practices that could benefit New York farmers. It was in so doing that Harwood encountered an aeroponic system idea that involved using cloth as a growing medium for plants. When he asked the researchers working on the system the question, “Is it ready?” on a number of different occasions, he continually received the same response “that it probably never would be.”
This response, fortunately, did not satisfy Harwood’s curiosity and instead spurred his entrepreneurial drive to find a solution on his own.
Harwood eventually hooked up with a test engineer named Travis Martin, who worked with him to develop an aeroponic system that incorporated cloth as the growing medium. Within Harwood’s aeroponic system, seeds are placed atop a piece of specially engineered cloth, given air (C02), nutrient infused water (H20), and light. Roots sprout through the cloth, an appropriate amount of light and nutrient infused water is delivered to the plants and they grow and thrive. Harwood discovered through testing various seeds that his system was particularly suited to growing leafy greens like lettuces and arugula.
To further scratch his entrepreneurial itch, Harwood left his post at Cornell Cooperative Extension in 2003 with the intention of fully realizing the potential of his aeroponic system.
He christened his newly formed venture, GreatVeggies, LLC and decided on a business model to market and sell the leafy greens that he grew in his aeroponic system to various restaurants and distributors. He initially had success, selling approximately 3000 lbs of leafy greens over a 4-year period. However, to scale his business model further, Harwood needed to add additional facilities and aeroponic systems to meet demand. Unfortunately, investors at the time proved skittish and operations at GreatVeggies ceased for lack of funding in 2007.
It was in 2009, nearly two years after he had shuttered GreatVeggies that Jessica Bloomgarden, Principal at 21Ventures, happened upon his website and saw the potential for his aeroponic system. Shortly after the discovery, David Anthony, Managing Director of 21Ventures along with Co-investor Quercus Trust provided Dr. Harwood with $500,000 in seed financing to refurbish the product, accommodate a new business model, and develop prototype units.
AeroFarms Business Model
Along with the company’s name change to AeroFarms, Harwood decided to modify the company’s business model.
Instead of operating as a farmer who produces and distributes leafy greens, AeroFarms now operates as an equipment maker that sells advanced aeroponic systems and comprehensive business solutions to urban agriculture entrepreneurs.
So, if you are an urban agriculture entrepreneur out there looking to create a brand of urban and sustainably grown leafy greens in Detroit, Chicago, Saudia Arabia, or elsewhere, AeroFarms can provide you with built-to-order aeroponic systems to get your growing operation started.
AeroFarms Market Size and Customers
AeroFarms estimates that its immediate addressable market within the U.S. leafy greens market is $1 billion. Their current customers include real estate developers, shippers/packers, and ecopreneurs.
As the urban agriculture movement is in its early stages and aeroponic systems in general are not widely understood, AeroFarms has been attracting customers by allowing them to demo and assess its aeroponic systems. Demo units are currently deployed in Chicago, IL to City Micro Farms, in Newark, NJ to EcoVeggies, a company that invests in urban farming as a means to revitalize the Newark area, Prior Lake, MN, and Jedda, Saudi Arabia to inform investors, provide a hands-on experience, and assess market potential. According to Harwood, the company also has “proposals into Qatar, Kuwait, and UAE.”
Barriers to Scaling AeroFarms
Aeroponic farming is capital intensive and according to Harwood, “the biggest obstacle are the funds that customers have to put together” to set up the systems. However, as skyrocketing food prices and support for more sustainable forms of agriculture continue to receive attention in the media, Harwood says that fund managers and people looking for future investment opportunities are beginning to express interest in his product.
AeroFarms System Advantages
AeroFarms systems do not require vast swaths of arable land to grow food. They can be placed in refurbished industrial buildings and stacked vertically, one on top of another reaching up to 60 times the footprint in annual production.
They require no soil or sunlight, and use very little water.
The systems do not utilize conventional fertilizers, or pesticides. Thus, foods produced by AeroFarms systems can be marketed as pesticide-free to consumers.
LED lights within the system can be adjusted to alter the flavor profile of the leafy greens. Harwood notes that one “can adjust the pepperiness of arugula,” for example, allowing urban farmers to create a better tasting product.
By controlling factors such as temperature, humidity, nutrient composition, and carbon dioxide level, the systems can replicate the growing conditions of almost any environment.
Harwood is currently seeking $3.5 million in Series A funding to accelerate growth and development of AeroFarms.
Until then, Harwood will continue to bootstrap and work on solutions that drive the urban agriculture movement forward.
This is a great article. It seems like there might be an opportunity to partner with a finance company to sell loans to customers. I would imagine that with enough scale in a particular market one could find efficiencies in maintenance, sales and distribution that could make this model work. Has anyone ever tried to put together a big operation?