Startup Profile: Sustainable Agriculture: Coming Soon to A Supermarket Rooftop Near You!
May 6, 2011 | Robert Puro
From the creators of the Science Barge, the floating hydroponic greenhouse project supporting sustainable food production and powered 100% by renewable energy, comes a new company that builds, designs, finances, and operates hydroponic greenhouse farms on supermarket rooftops. It’s called BrightFarms. By growing produce on site, the company enables grocery retailers to alter their produce supply chain in a way that improves the planet and their profits.
I recently had the pleasure of interviewing Benjamin Linsley, VP of Business Development and Public Affairs for BrightFarms, to learn more about the company’s history, business model, challenges and long-term plans.
Q: Where did the idea for BrightFarms come from?
Benjamin Linsley: We’d been working with the broader concept of putting hydroponic greenhouses on urban roofs to look at providing better quality produce in a more environmentally sustainable way. The company itself has evolved from a non-profit organization set up 5 – 6 years ago to BrightFarms now, which is the third iteration of our company. This latest iteration is only 5 months old. The recent change has been a business model one and not a conceptual one. We now focus exclusively on supermarket roofs and on large, acre plus greenhouses. The idea is still about putting greenhouses on roofs. So it is a business model innovation.
Q: What is BrightFarms’ business model?
BL: We design, build, finance, and operate the rooftop greenhouse exclusively for the supermarket that we’re located on. In return for that we sell produce at the same or cheaper price to the supermarket, but under a fixed term, long-term contract. Although we have slightly higher capital costs than any other greenhouses in the agricultural sector, we have lower operating costs. We have cut out several middlemen in the supply chain so we don’t have the wholesalers or the transportation people. We make money by being able to grow directly and sell physically right at the point of sales for our customer.
Q: How do you market BrightFarms to Supermarkets?
BL: Primarily at the moment we’ve been doing this directly. We have had existing relationships with supermarkets over the years, and so we approached people we knew already or we approached those that we didn’t directly. We have a couple of key types of individuals in the supermarket business that we pitch directly, particularly people like the Vice Presidents of Produce and the CEOs.
Q: What is the total size of the market for your product?
BL: There are approximately 45,000 grocery stores in the united states. So it’s quite a big market.
Q: How much does it cost to set up a BrightFarm System?
It’s in the $1 million to $2 million range in terms of construction capital cost. It depends how big it is. It also depends on whether the building it’s sitting on is a new build or a retrofit.
Q: How does the company plan to scale its business?
BL: By building more greenhouses on more supermarket stores. There are several hundred new supermarkets built every year. As fast as we can demonstrate the idea and work with more and more supermarket retailers, the faster the business will grow.
Q: What is your opinion of the overall urban agriculture marketplace in the US?
BL: On the positive side there’s a lot of interest and a lot of buzz, a lot of innovation and there’s lots of different urban agriculture projects around the US. I would say that most of them are fairly small scale in terms of their ability to grow volumes of foodstuffs and therefore feed people. That’s not to say they don’t have value, but the value can lie in their impact on small communities and on individuals so there’s a lot of education projects. There are a lot of projects which are designed to deliver social outcomes such as therapy or getting urban people more connected with agriculture and food. All of these things are extremely important and very valuable. They are not necessarily producers of large amounts of food.
Within the urban agriculture sector it’s only really our model – we’re not the only company doing this – but it’s really only the hydroponic greenhouse model that I’ve seen so far that offers the opportunity to grow significant amounts of food for a significant amount of people.
Q: How does BrightFarms support sustainable agriculture?
BL: There’s a big macro level picture that we’re looking to address, which is that we’re gradually running out of land and we don’t have enough water. It’s unsustainable to continue to pollute broader ecosystems as much as we do now. So we need greater use of new ideas and embrace of new technologies just to survive.
Our main concerns are twofold: one is the carbon emissions that come from both production of foodstuffs and their transportation; and second is the impact on a surrounding ecology from traditional farming approaches. We start with Carbon emissions. The agricultural sector is probably the second largest emitting sector in terms of carbon dioxide and greenhouse gases. And also particularly in North America food is transported an awful long way, so ‘food mile’.
Q: What are challenges to the growth of the marketplace urban farms and in turn to the sale of your product?
BL: The main one is that it’s quite expensive to put a greenhouse on a building. There are a number of them in development across the US, and I think as soon as they are up and running and they’re commonplace – lots of people haven’t seen or touched them – the sector will grow very quickly. I think until then, there’s the inertia that comes with any “we don’t know this,” “we’re not comfortable with it.” It’s quite a large commitment and people tend to go slowly.
That said, we are fortunate that the idea on a conceptual level is extremely attractive to people. We generally find that when we approach supermarkets they are interested and very attracted by the idea. It’s the implementation that people wish to go a little bit slower with and that’s fine.
Q: How long does it take to get one of these things up?
BL: The greenhouse itself needn’t take more than 3 – 4 months to build, but realistically it’s a broader property construction development project. It’s the permitting, the design – so I would say on average about a year. Again, though, that all depends on where you define your starting point.
Q: Can you talk about funding that BrightFarms has received?
BL: We’ve been very successful in the first five months of this year in raising angel investments from a number of fairly well known angel investors. We as company are doing well.
Q: What energy resource issues, if any, does BrightFarms face?
BL: From an energy perspective once you remove transportation the main concern is heating or cooling the greenhouse. The challenge is if you’re building a greenhouse in New York, for instance, normally it’s a heating challenge and we approach that in a couple of different ways. The greenhouse sector has gotten better and better each year at developing systems that heat a greenhouse in an efficient way and that retain the heat of the greenhouse.
The other critical bit for us is that we look at the roof of a building not just as a convenient bit of real estate, but as a potential source of free or sun-free waste heat energy. The idea being that most inhabited buildings are heated in some way and that they by and large tend to be heated in inefficient ways and therefore waste some heat. Heat rises if we’re on the top of the building and we can capture some of that particularly in the case of supermarkets. They waste a lot of heat. They have a lot of refrigeration and increasingly they have things like prepared foods, bakery ovens, pizza ovens. All of these tend to vent out the top of the building and with relatively little means to use it anywhere else. That’s the type of heat we can use. So we look particularly at the host building and a number of other technologies to ensure that our greenhouses are heated in a cost effective way. If it’s a low fuel bill it’s also going to be a low carbon emission.
Q: What percentage BrightFarms’ operating costs are taken up by energy consumption?
BL: It’s a bit difficult to say really. We’re looking at running a greenhouse with a very small fraction of the energy that a conventional greenhouse located in somewhere like the Northeast would use. But it’s really so location specific that it’s difficult to give an average number. For instance, if you were running a greenhouse in Charlotte, NC it’s not going to be terribly expensive for energy at all because it’s not a particularly hot summer, not a particularly cold winter. In Arizona, it’s cooling. The main thing is that for heating it’s harder to come up with an energy efficient solution than it is for cooling. Therefore where there are big population centers in the United States from the Midwest across to Boston and then down the coast of D.C. you also have quite cold winters so if you’re locating a greenhouse closer to population centers you also have to look at the heating issues.
Q: Where do you hope to see the company in 5 years?
BL: I am very optimistic that we will be working with all of the major US supermarkets and looking for every available opportunity to build on their stores. And different supermarkets have different styles. They have different geographical heartlands. They have different businesses with slightly different approaches to retail. I suspect that we will work at different pace with different supermarket retailers, but there’s no reason why are model shouldn’t work for all of them.