Startup Profile: TerraSphere Systems: Sustainable Vertical Farming is a Reality
April 14, 2011 | Jeremy Ogul
The idea for TerraSphere Systems’ vertical farming technology all started with a few marijuana plants.
In fact, Nick Brusatore, Co-Founder and Inventor of TerraSphere Systems, began developing his unique hydroponic technology system for medical marijuana cultivation in Canada (Canada began offering medical marijuana to eligible patients in 2003).
After working with their hydroponic technology for a while, Brusatore and his partner William Gildea began to think about population growth and quickly perceived the wider agricultural marketplace opportunities for their product to address future food shortages.
Realizing that growing demand for food could only be met with an unconventional approach, the pair founded TerraSphere Systems in 2003 to leverage their hydroponic technology to develop a highly efficient, environmentally superior, urban-based produce growth system.
From 2003 to 2007, Brusatore and his partners invested $3M to build a pilot facility in Vancouver, Canada to perfect the system design and conduct research and growth trials to validate their technology.
The system that emerged combined hydroponic technology with the concept of vertical farming. Vertical farming is essentially large-scale agriculture that takes place in urban high-rises or “skyscraper farms” utilizing recycled resources and greenhouse methods such as hydroponics to grow crops year-round.
How the TerraSphere System Works
The crop growing cycle in the TerraSphere System commences when individual seeds are planted in small peat pucks, about the size of a roll of large coins. The pucks then soak in a specially formulated fertilizer solution. Trays full of these pucks are placed on tall shelving units outfitted with artificial lighting and water misters. As the plants and their roots grow out of the pucks, they are transferred to another shelf-like machine that sprays water and nutrients on the roots at regular intervals until they are ready to pick and package.
Spinach and romaine lettuce grown using this technology is already on grocery store shelves in British Columbia. Brusatore says that “Anybody that buys it just absolutely loves the product.”
Advantages of the TerraSphere System
Compared to conventional field agriculture, TerraSphere says that one major advantage of its vertical farming system is that it can bring in yields 100 times greater per square foot while using just 20 percent of the water. The technology dramatically cuts down on water use because the water in the system can be recycled since it’s not escaping into the ground. Other advantages include a longer product shelf life, full containment so that the plants are not exposed to pollutants or field-growth hazards, pesticide free production, and controlled growing conditions (light, water, nutrients, and temperature).
Research and Development with the USDA
Numerous genotypes and production systems are necessary to meet year-round consumer demand for fresh strawberries. To meet this demand, TerraSphere is currently working with the USDA’s Agricultural Research Service to adapt its technology to strawberry cultivation. According to Brusatore, “Strawberries are very susceptible to many diseases, particularly in the fields because they’re subjected to so much there.” Vertical farming has the potential to allow strawberry growers to mechanically pollinate the berry plants, avoid pesticide use, and distribute their product year round.
TerraSphere’s Business Models
In 2010, TerraSphere generated nearly $4 million in revenue from equipment sales and the licensing of its technology to private businesses, public agencies and institutions, non-profit organizations, and governments interested in urban agriculture. Select licensees include:
- PharmaSphere, LLC a biotechnology company that utilizes TerraSphere’s technology to produce high-value, plant-based biocompounds for pharmaceutical and nutraceutical markets;
- GoLocalProduceRI, a company that is constructing a TerraSphere vertical farming facility to compensate for the short local growing season in Rhode Island, and;
- Squamish Nation, a native Indian tribe located in the greater Vancouver area that licenses TerraSphere’s system in order to produce and sell eco-conscious produce. Produce grown by the Squamish Nation using TerraSphere’s technology is already on grocery store shelves at select Choices Markets throughout British Columbia.
TerraSphere also employs a joint-venture model, in which both parties contribute to capital costs to build and operate TerraSphere-owned facilities.
Additionally, TerraSphere sells and distributes its produce to restaurants and markets.
As a result of its success in the marketplace, TerraSphere Systems was acquired in November, 2010 by Converted Organics Inc. (Nasdaq:COIN), a clean tech company composed of three primary lines of business at the intersection of agriculture, water and waste recycling. TerraSphere comprises its vertical farming division.
Challenges to Scaling TerraSphere’s Vertical Farming Systems
According to Dr. Dickson Despommier, one of vertical farming’s biggest advocates, the enormous amounts of energy that are required to power everything from artificial growing lights to climate controls must be overcome for vertical farming systems to truly scale. While it is possible to incorporate sunlight into vertical farming system design, in truly large-scale and high density operations use of sunlight is problematic because natural light can only reach plants that are near the outside surfaces of the building.
Brusatore believes the energy consumption problem can be solved with alternative energy. Brusatore’s vision is that TerraSphere’s vertical farm facilities will be built with renewable energy sources (such as solar) attached to them. In fact, TerraSphere is currently working with another company to develop an alternative energy plan. Brusatore believes that “there’s enough alternative energy that these facilities do not need to use electricity that comes from the grid.”
Others are not so sure. Ted Caplow, a researcher who designed a prototype hydroponic greenhouse powered exclusively by alternative energy in New York called the Science Barge, told The Economist in December 2010 that he did not think alternative energy would be enough to satisfy the needs of these operations, at least without great cost.
Nonetheless, as consumer demand for high quality, sustainable and locally produced food free of pesticides continues to increase, so to does the demand for TerraSphere’s vertical farming systems from its customers and licensees.