Startup Profile: An Urban Farming Startup Grows in a New Jersey Classroom
May 2, 2011 | Jeremy Ogul
Students at St. Philip’s Academy, an independent K-8 school in Newark, NJ grow their own salad greens. They use an aeroponic growing system installed in a fourth-floor classroom in which they plant, harvest and package such leafy greens as Chinese lettuce, arugula and komatsuna for delivery to their cafeteria. “It’s kind of amazing – it doesn’t get more local than this,” said Frank Mentesana, a St. Philip’s Teacher and Program Facilitator.
St. Philip’s aeroponic growing system is part of a pilot project being managed and run by an urban farming startup called EcoVeggies to trial a growing system developed by AeroFarms (see our article on AeroFarms for more information). EcoVeggies, led by three former Wall Streeters, was started out of desire to not only profit from an emergent urban agriculture movement, but also to find a way to revitalize the city of Newark, NJ.
While brainstorming ideas, the three partners determined that an opportunity existed in the abundance of abandoned commercial warehouses and buildings that could be leased or purchased for pennies on the dollar. “We had tossed around a couple of other ideas, because we really wanted to be contributors to the revitalization of Newark,” said Richard Charles, one of EcoVeggies’ founding partners. “We thought, what are the raw resources here? One thing that was abundantly clear was that Newark has a lot of unused buildings.”
The EcoVeggies partners first met officials from St. Philip’s Academy at a conference aimed at addressing the dearth of healthy food available in Newark. “We surely live in a food desert where there aren’t a lot of supermarkets,” said Mentesana, the St. Philip’s teacher. “It just so happened that they were looking for a location to house their prototype, and it really just was a fortuitous turn of events and good luck that we met.” The project began in August 2010.
EcoVeggies is using the St. Philip’s pilot project to gain hands on experience with the AeroFarms system and move the company closer to its ultimate goal of transforming abandoned and unused buildings into profitable pesticide-free urban farms. The aeroponic system in the fourth floor classroom also serves as an important educational tool for the students at St. Philip’s. “For the younger students, it provides a chance to learn about plants and how they grow, especially since the plant roots are clearly visible,” Mentesana said. “For the older kids they get a little more involved in the science of it, a little more involved in the business of it. In addition to the whole urban farming and alternative growing and so on, they’re understanding that this is a business.”
Refining the Business Model
EcoVeggies is using the St. Philip’s pilot project to refine its business model before scaling it to one that sells produce to local and regional markets.
“We are working with a couple industry data experts to look at our business model and see if it comes back with what we’re hoping,” Charles said. “We really want to do this, but we’re not looking to do this on the backs of subsidies and grants, because that’s not sustainable.”
According to Charles, the energy required to run the AeroFarms aeroponic system accounts for almost 60 to 70 percent of variable costs in EcoVeggies’ financial model. Other major expenses include the cost of purchasing the AeroFarms systems, which according to AeroFarms can run from $20,000 for a system similar to the one being tested at St. Philip’s all the way up to $5 million for a much larger commercial scale system. “But it pays for itself in no time flat,” Charles said.
Competition is scarce in the urban farming market. “For something that’s up running by itself that’s not running on subsidies, we don’t have very many competitors of very reasonable scale,” Charles said. While large-scale urban farms are more prevalent in Europe, in the U.S. EcoVeggies is among the early entrants into the for-profit urban agriculture marketplace.
After applying the learnings and data obtained from its pilot project and subsequently expanding its business into the retail marketplace, Charles hopes to bring EcoVeggies’ urban farming model to other countries and areas where traditional farming is not an option. For now, though, it’s one of the coolest parts about being a student at St. Philip’s Academy.