Plenty Unlimited is building its third vertical farm, six years after the company was founded in California. But the business has had to give up a stake to external investors to raise cash in what is a capital-intensive alternative to traditional agriculture. Simon Harvey speaks with co-founder Dr. Nate Storey.
Plenty Unlimited is aiming to resolve the pressing issue of land availability to cultivate fresh fruit and vegetables as the world’s growing population eats away at natural resources.
The US firm is doing it through vertical farming, an agricultural technique that uses hydroponic or aeroponic systems to grow fresh leafy greens and soft fruit without the need for fields or soil. Instead, indoor farming as it’s also known, cultivates produce in stacked container units, similar to traditional greenhouse methods but with, proponents say, added advantages in terms of land mass, greater yields and freshness, given produce can be cultivated in close proximity to the consumer and, as is becoming more common place, actually within retailers’ floorspace.
Land availability for agriculture is becoming scarce as arable land and pasture make way for housing developments and the infrastructure to service a growing population. Vertical farming is gaining in prominence, yet it remains a nascent but expanding industry. Scientists hope it can be a solution to help ensure consumers have unlimited access to fresh fruit and vegetables essential for a healthy diet.
In a world where concern over the environment is increasing and playing a bigger role in consumers’ decision-making, vertical farming also reduces the pressure on the planet by requiring, in most cases, 90% less water than traditional methods and zero pesticides. That’s why it’s often referred to as controlled environment farming.
Dr. Nate Storey co-founded California-based Plenty in 2014 with Matt Barnard, who is chief executive and hails from a farming family background. Storey was educated in agro-ecology and agronomy with experience in crop and soil science, and is the company’s chief scientific officer.
Speaking to just-food, Storey describes the thinking behind setting up the business. “We saw the supply was finite and the demand was growing and people were already being underserved, and so the thought was we need to figure out a way to create more land to grow fresh fruit and vegetables on and to feed everyone. We started in a small container on the Google campus and then scaled up, raised money, scaled, raised and scaled.”
Plenty has two farms, its flagship facility located in south San Francisco and a research and development farm in the city of Laramie, Wyoming. A third is under construction in the California city of Compton on an approximately 100,000 square-foot plot. That facility will gradually be ramped up in stages over the next year.
The business is also attracting the attention of retailers and fresh produce suppliers having recently secured an agreement with Albertsons in the US for fresh leafy herbs and a deal with fruit grower Driscoll’s to cultivate a range of “proprietary flavourful” strawberry varieties at the Laramie farm.
However, Storey alludes to the fact vertical farming is capital intensive due to the expense required on technology, with artificial LED lightning particularly costly, although he says prices have dropped considerably over the last decade. Plenty has had to give up a stake in the business in return for external investment, which to date amounts to US$500m over four funding rounds, the latest being a US$140m Series D injection in October.
Driscoll’s is the newest investor, joining the likes of mostly US-based venture-capital funds Softbank Ventures, DCM Ventures, Innovation Endeavors, Data Collective, Finistere and Bezos Expeditions, the personal capital fund of entrepreneur Jeff Bezos. But Storey was reserved in revealing the stakes taken by those outside parties or the share holdings he and Barnard now own given it’s a privately-run business.
“This is a capex-intensive business and you certainly don’t raise the amount of money that we’ve raised and expect to own the bulk of the company. The reality is that this is a new industry and we have to build a phenomenal amount of artificial land in order to do what we set out to do, which is frankly to double, to triple the world’s supply of fresh fruit and vegetables,” he says.
“In order to do that, the reality is that everybody has to get pretty comfortable with owning a relatively small stake in a very large thing and that is going to be true for a very long time. We are going to have to invest billions upon billions of dollars to build the equivalent of three times as much production capacity as we have today.”
Plenty is not alone in the US vertical-farming sector, and is joined by the likes of AeroFarms, Freight Farms, BrightFarms, Bowery Farming, Gotham Green and more, with new entrants likely to follow as the industry and technology gains prominence.
The sector is also beginning to take hold in Europe too, with players such as Infarm in Germany, Danone-backed Agricool in France and Saturn Bioponics in the UK, to name but a few. Russia has also got in on the act with iFarm, while development is also taking place in the Middle East, and in Asia, particularly Singapore.
Storey says it’s going to take a joint effort and collaboration among farmers and governments to get the required impetus and backing behind the industry, with time running out before available land disappears, making it critical to also look beyond the current solution.
“It’s going to require a lot of vision, a lot of capital”
“I think the next thing to help people understand is when we are talking about doubling or tripling the world’s capacity to grow fresh fruit and vegetables, that’s going to require a lot of people, a lot of work, a lot of building. It’s going to require a lot of vision, a lot of capital,” Storey explains.
“The one thing that I would change about the narrative of the last couple of years, is a lot of people have tried to turn it into a vertical farms versus the field narrative – the us versus them, forces in opposition to each other. But frankly, it’s not appropriate for this situation. The reality is, we’ve got a lot of work to do together. And the field is necessary – we are going to be building on top of a field for a very long time if we are going to feed everyone.
“And also we need to explore what comes after the fields, what happens when we don’t have more soil, water or the resources to exploit the field further. That is the big challenge – changing the narrative to one that is more inclusive and understands that this is a group effort on the part of farmers probably as long as humanity endures.”
Most companies involved in indoor farming are only producing fresh leafy greens, herbs and soft fruits, but Storey sees opportunities in tree fruits in the longer term as the industry matures.
Plenty is growing lettuce, baby kale, baby arugula or rocket, and the Japanese vegetable mizuna, but also has a particular focus on varieties of tomatoes, and of course berries. For the time being, the company is happy to develop the business in the US over the next couple of years but does have, Storey says, “global ambitions”.
“The more I learn, the more I understand that indoor farming can be a relatively complete solution outside of greens, which is where most folks have focused, into all these different fooding crops,” he says.
Storey estimates the US market for leafy greens cultivated in a controlled environment is worth “ten to 12 billion dollars”.
“Strawberries add several billion, tomatoes add several billion, and then as we look to the globe, ultimately we are talking about markets in the hundreds of billions of dollars range,” he estimates. “If we are just looking at strawberries, tomatoes and greens, we are looking at a market well in excess of $100bn, and if you consider latent demand, probably in excess of $200-250bn dollars.”
With the vast financial outlays required to set up individual farms, it’s generally agreed across the industry more support is needed from governments and authorities, and other relevant bodies to add to the interest coming from private investors, who see the obvious benefits.
Education on the part of the consumer is also necessary to first get the message across that land for agriculture is fast disappearing and, second, to understand the mechanisms around vertical farming.
Storey outlines his thoughts. “Collectively, we need to expand our mindset around what this new form of agriculture means for the world, means for society, means for our people, means for our citizens, and to understand, one it’s not free, and two, it needs to be deployed at scales that are pretty mind-boggling.
“That inevitably requires some partnership with government or public-private partnership. The US government is becoming more interested and is slowly becoming a believer, and it’s taking some work. But frankly, the government is going to have to look at this as something much more substantial than just a few million dollars for community gardens, and that kind of thing.”
Storey is passionate from a preservation perspective and the need to embrace new technologies to solve some of the planet’s problems around environmental resources.
“Humanity has always taken the land for granted. We have always taken soil for granted, we’ve always taken the nutritional content of our soils for granted. We’ve always assumed there is just more land, there’s just more water, there’s just more of these resources, and the reality is, we are kind of approaching a reckoning as a species where we have to understand that there isn’t more. And to a large extent we have been consuming more than can reasonably be replenished in a human lifetime. And that should be very scary for us.”
It could be argued that vertical farming has progressed enough globally at this stage to move away from the theme of whether the industry can become mainstream to a matter of when. Storey believes there will be “several handfuls” of players in the US over the next two to three years. And further afield to the coming five to ten years, “it’s going to be remarkable the pace at which it expands”.
“There’s latent demand, the market is ready and waiting, there’s capital out there looking for a home and it just wants the proof that this industry can stand on its own legs,” he says. “And then, governmentally, once the realisation sinks in that we are land-limited, that we are resource-limited and climate change is going to further limit us … there is going to be a very rapid switch to embracing and encouraging the growth of these farms.”
Nevertheless, it seems access to capital is the key challenge in order for the indoor-farming sector to realise the potential its proponents believe it has, much of which is going to have to come from external partners or governments because the outlays are too substantial to leave that aspect to management alone.
What are the challenges for Plenty, then?
“Just scaling,” Storey responds. “How do we build something of this scale in order to meet the world’s needs? That’s a question we are answering as we go. And accelerating that understanding of why this is critical for the world and our species.”