Lost in the Supermarket

Aquaculture Expands to Brooklyn and Can Change the Way we Eat

March 16, 2022 SupermarketGuru
Lost in the Supermarket
Aquaculture Expands to Brooklyn and Can Change the Way we Eat
Show Notes Transcript

Today, we're gonna talk about the future. We're gonna talk about indoor farming. We're gonna talk about aquaculture. And with me is Jason Green, the CEO and co-founder of Upward Farms based in Brooklyn, New York, and a breakthrough vertical farming company who brings whole ecosystems into controlled environmental agriculture, through aquaponic farming of leafy greens, fish, and a robust and beneficial microbiome. Back in 2013, Jason and his partners started upward farms. They were the only large scale vertical farm that offers locally grown, washed, and ready to eat USDA certified organic leaf greens and best aquaculture practices, certified fish upward farm grows and packs superior quality microgreens that are bursting with delicious flavor and nutrients that are best selling products at whole foods.

Phil:

Welcome to Lost in the Supermarket. Today, we're gonna talk about the future. We're gonna talk about indoor farming. We're gonna talk about aquaculture. And with me is Jason Green, the CEO and co-founder of Upward Farms based in Brooklyn, New York, and a breakthrough vertical farming company who brings whole ecosystems into controlled environmental agriculture, through aquaponic farming of leafy greens, fish, and a robust and beneficial microbiome. Back in 2013, Jason and his partners started upward farms. They were the only large scale vertical farm that offers locally grown, washed, and ready to eat USDA certified organic leaf greens and best aquaculture practices, certified fish upward farm grows and packs superior quality microgreens that are bursting with delicious flavor and nutrients that are best selling products at whole foods. Jason, welcome to Lost the Supermarket.

Jason:

Phil, thank you for having me. Good to be here.

Phil:

So, you know, when I look at the future and I look at the supply chain problems that we've had, when I look at, you know, having a hundred thousand truck drivers out of the workforce, I look at, you know, having to get a bag of lettuce from California that grows, I guess, about 96% of all lettuces to Brooklyn, New York, this is not a very efficient system. So with your background, with everything that you're doing, you're looking to really upend this whole system and grow close to where people are. Tell me a little bit about that and, and why you're doing it.

Jason:

Thanks Phil. Yeah, I, I think you've already teed up a number, the issues that, that we're addressing over the last several years, we've seen that climate change is not just a future threat, but it's affecting the food that's available. Every day we've seen that yields across the globe are dropping yields in the us actually fare worse than, than than many cases go global averages. And that's particularly concerning for, for us here at home, in the us, what we're now seeing over the last two years through the COVID is the emergence of that. The consolidation of production, whether it's in geographic areas like Arizona, for leafy greens, or just how globalized food has, has become, whether that's air freight of fish from all over the world is, one of the most traded commodities across borders. Or if you're looking at the inputs to agriculture and we're now seeing how the war in Ukraine is creating new food security risk countries are shutting their borders. They're saying they're not gonna export food because the concern is that there isn't enough at home. And I think all of those are, they are increments that are adding to what we have known for a number of years now. And it emerged during the, the climate discussion that proceeded the issues over the last two years. And over the last two weeks, is that how and where food is grown is not serving consumers and it's not serving retailers either. So the question is, you know, who, who is it serving? And that's probably a, discussion. But what we know is that it's not serving consumers and it's not serving retailers. And that's really where we come. What, what we're trying to do is really rationalize the supply chain, grow food that people wanna eat.

Phil:

So if I take a look at our system and, and I would say our food system is broken, and, and I look at what you're doing, for example, talk to me about the combination of leafy greens microgreens and fish seems like an odd combination for me.

Jason:

You know, it shouldn't be, it shouldn't be an odd combination. What, when we look back at.

Phil:

I mean, I like both and I like to eat fish with grains, but right.

Jason:

You know, if we, if we think about like, nature, right? Like if me as a, as, as an eater I, I want to eat natural products and I don't mean that as like a label saying, like all natural but things that are going grown through natural processes, that is where all of our food historically came from, right. Was a, was a, was a, a connection to nature. Now, as, as agriculture has evolved over the last 10,000 years, and about 10,000 years ago is when, humans as a species transitioned from and foraging into agriculture and started building permanent communities. What we have seen is increasing intensification. And over that time yields went up that what we were able to produce, the processes that we were using to get, they actually increased the amount of food that you get out of plot of land. And what you saw in those was what we would now call regenerative agriculture, the integration of plants and animals, nourishing soil. And you mentioned in your introduction about us, the focus on the microbiome, the microbiome is this invisible layer of bacteria and fungus that lives in and on everything, your body, my body, and in. So what, what we saw over the course of, of agriculture until pretty recently was a greater understanding of the relationships between plants, soil, and as a result that we to really increase productivity, what we've now seen is, is that we've sort of hit this tipping point, that agriculture in many ways has become so intensified that it is, divorced from these natural processes. And so what we are doing. What we are doing is we're learning from both we're learning from the ways in which creating repeatable processes and thinking about, you know, how do we create efficient manufacturing environments? And that's really what indoor agriculture is in our view is it's a biological manufacturing platform. You know, ultimately we're making things in a repeatable way that's manufacturing, but what we do differently is that we focus on biology as the core driver of that, that productivity as oppos to synthetic tools like, like synthetic fertilizers, pesticides, et cetera. And so what, what we're doing is we're combining that approach of indoor agriculture as a food manufacturing platform, and then learning what has become, has become a sort of new area of focus. But ultimately goes back to the, in which humans learn to farm, which is these regenerative approaches, these approaches where we're building soil, where we're building ecosystems by integrating plants and animals into the production environment. And so that, that at a very high level is what we do. Aquaponics is the specific sort of tool that we focused on. So aquaponics is the integration of aquaculture farming of fish and hydroponics, which is the farming of plants for the plants. Roots are nourished by nutrient rich water. So combining aquaculture and hydroponics, we get aquaponics and aquaponics has been around for a really long time in some ancient formats. So we, we saw historically rice farmers in China used carp in their flooded rice patties. And those carp would eat the pests that would, that would otherwise affect their rice crop. And they would also provide protein for farmers and, and they would fertilize the crops over the course of the growing season. We saw in early meso American societies, the cultivation of plants on lakes stopped with fish in floating rap, really early versions of what, what would become aquaponics. And so, in, in, in some sense, there's sort of a fundamental natural blueprint of know these systems evolved, right plants and animals and microbes, all co-evolved over millions of years. And we saw humans who learned to farm over 10,000 years have focused on those, those, those tools, to produce food. What we are doing is we're going back to some of those basic first principle of how ecosystems work and how they drive productivity. And we're combining that with what we know now about how to build large scale manufacturing infrastructure. And that's, that's what we do. What's really interesting as we think about regenerative agriculture and the moment that it's happening, trying to rebuild food, supply chains, as the climate is changing around us, is that more biodiverse ecosystems are actually more productive, more stable and more predictable than monocultures. And so the tools that got us here are not the ones that are gonna get us outta here.

Phil:

So let's talk about the challenges certainly with everything that you've built, one challenge is the cost to do this. Talk to us a little bit about that. And does it make sense for us to move in, in this direction economically? Because I'm, I'm gonna assume that the retail price for the average consumer has gotta be higher because your input cost is higher.

Jason:

Our view is that like, like all modes of, of farming and food production, if it is not the cost effective, it will not get mainstream traction. And it won't have staying power. That from the time that we started, the business has been, our focus is how do we make indoor production through aquaculture, through aquaponics and vertical farming? How do we make that lower cost through and incumbent production out on the broad acre? That to us is how we created a sustainable business plan. And so...

Phil:

Yeah. So how are you doing it?

Jason:

So it's all about productivity, right? How do you drive, how do you drive up your yields and how do you drive down your costs? And, and you have to think about sort of the overall macroeconomic tailwinds, or what we're seeing in fields is that, I mean, you mentioned the shortage of a h undred, a h undred t housand truckers. We're seeing gas prices right now are through the roof. That's, you know, perhaps an acute risk b ecause of where we're seeing conflict affecting the availability o f f ossil fuels, but that we can't rely on low c ost. Fossil fuels is, is a, is a long r unning t hing that preceded the w e, so we're seeing, you know, shortage of a h undred t housand truckers o utta stocks and consumer package goods are up to15% about, you know, 5 0% t o twice the historical average. But where we're seeing cost reductions are in things like renewable energy, energy at large, is getting, is getting a lot cheaper. Even if, even if gas prices have gone have gone up quite a bit. Energy in the us over the last several years has come down so considerably that it is cheaper to buy industrial energy in the us in many states than it is to buy energy in many of the manufacturing regions of China, that is an extraordinary and questions that raises that, that raises is where do you make things, right? If, if labor is high and energy is low, you make things where the energy is low and you use automation. If energy is high and labor costs are low, you make things where, where labor is cheap. Now over the last several decades, labor has been cheaper than energy. And so it has made sense in, in places like China. And so it's made sense to make things abroad. What you're seeing now is this massive shift. And at the same time, technology has come a really long way. So all of those automated or autonomous systems for manufacturing are now cost effective. And so the combination of all of these factors means that we do have to rethink how and where we're making things, especially food and especially perishable food because the technology and the, and the driving cost factors have fundamentally shifted thinking specifically about farming and not just manufacturing at large. What we've seen over the last couple of years is yields are coming down on the broad, acre, and yields are also becoming increasingly unpredictable out of stocks in categories like leafy greens are going up every year. You see more and, and more prolonged out of stocks. What we're also seeing is that wages are going up and that's a, that's a good thing from a human perspective that an essential industry like agriculture has been exempt from minimum wage laws or overtime laws, right? Like that, that as an employer is something that I disagree with. I think if people are doing the work, you should be paying them for the work that they're doing and not treating them differently, then you treat a different of and so we're seeing those changes, but that's doubling the cost of labor on the broad acre, especially for specialty crops that get harvested by hand, like leafy greens. At the same time, you're seeing lower energy costs. You're seeing efficiency in led lighting. You're seeing efficiency in climate control, you're seeing lower costs in automation. And so the moment that that's got to is that there is this, there is this flip happening, this inflection point where growing things indoors can be cheaper than growing things outdoors, but it does require driving productivity. And that's really what, what we do, at a, at a uniquely high level.

Phil:

So last question, look in to your crystal ball, where's upward farms in three years from now.

Jason:

So I think, you know, or we think sort of in 5, 10, 20 year time horizons, maybe it's helpful for this conversation to think in terms of five years and, and 20 years in five years, our ambition is to be the number one organic packet, solid brand in the us. We think that's very achievable. We've been unique advantages on being, the only vertical farm of scale producing U S D A certified organic leaf greens. And so we've, we've got, we've got some considerable differentiation there, and the technology allows us to significantly reduce our cost of production. And we've demonstrated very high velocities the highest velocities in among vertical farming peers in the most competitive market in America, which is, the New York Metro market. Oh, so over the next five years, we keep our heads down. We focus organic package out, I think over the next 20 years, we think about what is the platform that we can open up to the broader food production industry. And in that we're thinking about, you know, we've created this really interesting platform where we understand the relationship between plants, animals, the microbes that are going growing between them and climate. And that is sort of the essential question for far farmers over the next 20 years is how do we think about the things that we grow under a changing climate and the microbiome is this really powerful tool. So the microbiome inside of your body, for example, introduces 8 million genes to your body, and the genes are, you know, think about it like software code, right? That those genes tell a body how to make things your DNA alone only accounts for 22,000 genes. So you're talking about 360 times more genetic material, more programming in the bacteria that lives inside of you than in your own DNA. And the same thing is happening in soil, but we're losing all of that, all of that code, because what we've seen is because of the industrialization of agriculture over the last century, 40% of the world's top soils have already been lost. And we are losing top soil at a rate of up to 40 times replacement. So how quickly you're building soil is a farmer versus how quickly you're losing it through erosion. And so our view is what we are doing indoors is we're effectively rapidly growing soil ecosystems. We're rapidly developing these soil food webs. We take a crop from seed to harvest in as little as seven to 10 days, and we're showing the ability to cultivate robust soil ecology in those plant route on the plant leaves. And as a result of the, that, get these, get this really high level of productivity, really high yields, zero disease. And so we think that there's the opportunity to open up that platform to growers on the broad acre, to open up to new markets that it's not just us as the producer, but this is really a new operating system for regenerative agriculture.

Phil:

Jason, thanks so much for leading us into the future and joining us on Lost in the Supermarket.

Jason:

Thank you, Phil. Pleasure.