Explore the future of agriculture with Irving Fain, the CEO of Bowery Farming, as we venture into the world of indoor and vertical farming. Are you ready to discover how these innovative farming methods might be the game-changer in the face of climate change impacts? Climate anomalies such as severe droughts, wildfires and overuse of groundwater have disrupted traditional agriculture, making it even more challenging to meet the ever-increasing global food demand. We delve into these issues and highlight how vertical farming can offer a sustainable and efficient solution, while also engaging a new generation of tech-savvy farmers.
With vertical farming, advantages run deep for consumers, retailers, and of course, the environment. From offering longer shelf life and more nutritious produce, to providing transparency in growing practices, this revolutionary method is changing the way we grow our food. Imagine a world with reduced food waste and a streamlined growing process - that's what the technology behind vertical farming promises to deliver.
In our final insights, we underscore the significance of vertical farming in the agricultural industry. We touch on how Bowery Farming, a leading indoor farming company, has been making remarkable strides in this field and their ambitious growth plans. With their progressive methods and tech-centric approach, they are not just shaping the future of agriculture, but providing an essential solution to the mounting challenges of our time. So, gear up to unearth the thrilling innovations and transformations in modern farming with us.
Welcome to Lost in the Supermarket. It was about a month or so ago, in my Forbes column, that I really wanted to set the stage on one of the things that I think is the most important aspects that agriculture really needs to focus on, and that's indoor farming, specifically vertical farming. I actually went out to Bowery Farming in New Jersey, went to their R&D facility, met with the people there, tasted a lot of great new produce items and then followed up with the co-founder and CEO, Irving Fain, who's with us today, to talk even more about why indoor farming and vertical farming is so important. And just in the New York Times last week there was a story about how in Provence, France, winemakers are having to grapple with climate change and change how they approach the growing of century old varieties. The taste and I'm quoting from the Times "the taste of century old varieties are being altered by spiking temperatures, scant rainfall, snap frost and unpredictable bouts of extreme weather. Temperature records were set in Europe, the US, china, north Africa and the Middle East as hail, drought, wildfires and floods on a biblical scale inflicted damage. So when we look at agriculture, we have some severe issues to really address and address very quickly, irving, welcome to Lost in the Supermarket.Irving:
Thanks so much for having me, Phil. I wish all those statistics you just rattled off weren't so recent for all of us, but I'm glad to be here to talk about all of it.Phil:
So what I want to do again, I refer to the Forbes column that was the beginning stage. Now what I want to do is get more in-depth with you and really be able to get into your insights and your brain on just how important these issues are. So I guess, to start, how short-term climate impacts, such as the overuse of groundwater, which is draining and damaging our planet, wildfires, these extreme heat that I talked about, have heightened the business case for vertical farming.Irving:
It's interesting that there isn't more conversation about that. Water is a resource as it relates to agriculture and where we're headed and the challenges that we're being faced with right now, given how crucial access to that water in this country alone really is to the whole ecosystem. We have a vast system of aquifers in the US underneath the ground that actually has arguably helped us to create this vibrant agricultural ecosystem and powerhouse that we've become. We export an enormous amount of crops, not just fresh produce, but actually enormous amounts of grains and row crops. Much of that is the benefit, or from the benefit, of this aquifer system that we have. California, the Midwest. These aquifers have been giving us water for decades and decades and decades. The problem is they are being depleted at enormously rapid rates and the depletion is happening much, much faster than replenishment can ever happen. And so you are finding communities, whether it be in the Midwest, whether it be in the West, whether it be in the Southwest, where water that used to be accessible at certain depths is no longer there. We have to go deeper and deeper, and deeper just to find some amount of water that we can use. That problem that we're facing today is actually only going to get worse you just talked about. It's being exacerbated by what's happening above ground, which is hotter temperatures, general warming. That means faster evaporation. That means less water that actually hangs around and seeps into the ground and, contrary to what sometimes people think, these day looses of rain like what we saw this winter, this atmospheric rivers, rather the spring and summer, these atmospheric rivers it actually doesn't help. It hurts us. And the reason it hurts us is because when that much water falls that quickly, it doesn't have time to actually seep in and replenish our groundwater table. It just rushes out to the oceans and very little of it actually gets captured. And so there's this reinforcement cycle that happens when it gets as warm as it does outside, where water evaporates more quickly, we have bigger rains. That water washes away and the entire cycle that for decades and decades and decades earlier in the 20th century we relied on to become such a rich agricultural nation. That that is waning, it's changing, it's evolving, it's changing. The challenges we have in the US are just one aspect of challenges that we see around the entire world, and and the best way to describe it is just a much larger volatility in climactic events than we've ever seen before. We've always seen changes in the climate, but the, the Delta and the distinction between what you, what you see in the winter, what you see in the summer, or the amount of rain you get, the amount of heat you get, that has spiked to a whole new level, and the agricultural ecosystem that we've come to rely on hasn't been built to manage and handle that level of volatility in the way that we're experiencing it today, and so we have to adjust. So if we.Phil:
If we take a look at everything that you just said, it's a pretty dismal picture for traditional farming Because we're not able to control the climate the way you know we'd like to be able to. We're. We're seeing reports that you know we're gonna see heavier rains, we're gonna see hotter weather, so, to your point, it's just gonna get worse. So how do we really look at the future for vertical farming, for CEA, in a much more balanced way where we can work together with traditional farmers? And one of one of the notes that that I made in my, you know, article in Forbes was how vertical farming, because it is more technical in its operation, is really attracting younger people to farming. So you know, we're gonna have more new farmers who are smarter, that are vertical farmers. We're CEA and you know how. How are we gonna deal with this with, with you running? You know Bowery, you know you. You've got to be looking at it and saying you know, I got a bill Bowery to be 10 or 20 times the size of what you are now. And now you're big, you're selling, you know, thousands of supermarkets around Around the country, but you've got to grow even faster to solve this issue.Irving:
Yeah, it's interesting, the the imperative for what we're doing, phil, has never been clearer and and yet, and there's a sense in in today's world where, where there's a sense of immediacy in our needs and and we live in a world of instant gratification, right, you look at tiktok and Instagram and social media and our phones in our hands all the time, and so I. That translates in some ways to Expectations we have for bigger innovations and societal trends and, understandably, we find exciting new opportunities and innovations and we want them to blossom and be there tomorrow. And and don't get me wrong, I would love to be 20 times larger tomorrow as well. But you know, there is a real truth in the long road to overnight success and you know we're excited about re. We're the largest in their vertical farming company out there. You know we're an over 2600 retail stores today. That's a great footprint, but we still have so much further to grow and so much further to go and Even when you look at the entire industry, we're still a smaller portion of a much larger opportunity which today is really driven by field grown agriculture, and what you're seeing is a lot more pressure that's going to be applied on field grown agriculture from many, many different angles. I mean, we've talked about climate. The climate challenges is very real. Most of our fresh produce comes from either the Salinas Valley in California or it comes from the uma, arizona and the southwestern region. That that's what's what we grow in this country. And Again, we were talking about the aquifers. You know it, since 2003 in the Central Valley, losses total about 36 million acre feet of water. That is 1.3 times the full water storing capacity of Lake Mead near Las Vegas, which is the large, largest reservoir we have in the country. So we have lost a lot of water there and that's going to continue. But it's not just a story of water. We talked about drought. We've had the 1200 year drought that's ravaged the West, the Southeast, even the Midwest. Then you have labor challenges, where labor is becoming harder to find, labor is becoming more expensive. All these components are impacting the outdoor agricultural ecosystem. There has to be a response. That said, our supply chain has been built over for decades and decades, hundred plus years, and so we are going to see a world where vertical farming is going to become a larger and larger portion of the grocery store and it's going to become a larger and larger portion of the crops that you find in the Produce aisle. But that won't happen overnight. Will it happen more rapidly and more quickly? Absolutely, the adoption curve is going to increase, but changes that are systemic like this still take time, no matter how strong the tailwinds are and how strong the desire is.Phil:
So we've talked about outdoor Agriculture, we've talked about farmers. Let's move to consumers. You know, like, what's the benefit to consumers For vertical farming? What? What are they going to realize? Is it just going to be, you know, more of the same? Is it going to be higher prices? Of? What benefits do consumers really get from this?Irving:
What's great about what we do at Bowery and Vertical or the vertical farming at Bowery is there are both benefits to consumers and there are very real benefits to retailers. So let's talk about retailers first. Okay, you see the highest shrink in the retail store in fresh produce, of course. Now it's a perishable product. It goes bad and one of the real challenges retailers have and have had for as long as it is time essentially and you know this very well is how do I buy enough produce to make sure that people have it, but not enough, that it's boils and goes bad? That's both an economic problem for retailers and it's a food waste. It's an environmental sustainability problem as well. Food waste is a very real thing in the grocery store, let alone in our shelves or in our refrigerators at home. And when we deliver a product at Bowery, we deliver that with 20 plus days of shelf life. Yeah, we deliver our product 24 hours to 48 hours after it's been harvested. It reaches our retailers, compared to weeks of time or months of time in the existing supply chain. So the product shows up. It's more nutritious because it loses less nutrients in that time. It's higher quality, it tastes better and it lasts. That's good for the retailer across the board. Now you talk about a consumer. The consumer takes those same benefits, right, you bring home. We've all had that experience where you take home some produce and it feels like a day later it's bad and you're throwing it away. Or you're trying to eat it and you're picking around the bad parts of the produce. So having a consumer experience where what you're buying is staying fresh your refrigerator for a week, two weeks Hopefully you've eaten it by then, but if you haven't, it's still fresh that's great. Having a having produce that's more nutritious, that tastes better, that's really valuable. And then there's the component of it where consumers are asking questions now, where's my food coming from? Where is it grown? What's on it? What's in it? People don't like pesticides. I mean, you read about the dirty dozen every single year. There's a reason that gets published. People don't want chemicals and pesticides on their food and on their produce. That's what's interesting. Organic is a great step forward in the way that we grow food, but organic still uses pesticides and consumers often don't know that. So to provide people with a completely pesticide free product with total transparency, you know exactly where it came from. You can trace it back to exactly where it was going, how it was grown. We're very straightforward about that, because answering those questions for consumers is important. And then it's more nutritious, it lasts longer, it tastes better. That's a lot of benefits for consumers, and we're selling our product at or below the cost of field grown, branded organic product, and so it's a good consumer proposition and an importantly valuable retail proposition as well.Phil:
So we see behind you these racks of produce items growing. Let's talk a little bit about the technical aspect of vertical farming. It's not just having racks with dirt and plants in there. Really talk about the technology that's involved. Talk about how it works.Irving:
You asked something before that I didn't really cover and I want to use this. It's a good opportunity. Farmers are actually quite technical, as you know Field-based farmers. In fact, farming is a technology-focused craft and has been for quite some time. It always bothered me when people said, oh, there's been no innovation in farming. I always kind of said that's not true at all. In fact, there's been enormous amounts of innovations in farming. It's just different types of innovation. There's a deep technical focus in the way we grow and harvest and manage our land. Today. What we're doing at Bowery is we're bringing different technologies in a different approach. You have a set of farmers already who are becoming a lot more conversed with technology already. What we're doing is bringing a different type of technology, a different manner of growing To the point you made earlier. It certainly attracts either a different type of farmer or at least it opens the door to individuals and younger people who may not have ever considered farming because they don't live near farmland or they don't come from a farming family. What we do at Bowery offers them an opportunity to be a part of growing food, which is something that's been cordial our country since the founding of our country. There's something very nice and fulfilling about being able to feed the community you're a part of. We're giving that opportunity to people who may not have grown up anywhere near anything related to farm. How does that happen? You asked about technology. As you said, this does not look like Old McDonald's farm. I can attest to that. It is still growing food, with the same things that happen in essence outside, just in a little bit different. We stack our crops to the floor of the ceiling. We grow under lights. They mimic the spectrum of the sun. We grow in a totally controlled and contained environment. That means we can grow 365 days of the year, independent of weather, independent of season. Now it's reliable, consistent supply of quality produce year-round. No pesticides, no herbicides, no fungicides, no insecticides. It's pure and clean produce. Through our system, we're able to give all of our crops exactly what they need when they need. So they're getting the water they need, they're getting the light they need, they're getting the nutrients they need, they're getting a healthy microbiome around the root system that they need. That happens through a system we've developed called the Bowery operating system. The Bowery OS is a combination of software and hardware, ai, computer vision and a center and control network and that helps us not only monitor and maintain the conditions across our entire growth space, but actually monitors and maintains the entirety of our supply chain, from before we ever supplant a seed, all the way until we harvest, package and ship out our product. And that point is very important because sometimes people look at what we're doing at Bowery and they define it as farming. And of course we are farming. Farming is a part of what we do. We grow food you can see it behind me but in fact what we're doing is we're developing technology that really allows us to reinvent the fresh produce supply chain and we build a simpler supply chain. It's a shorter supply chain, it's a safer supply chain, it's a much more sustainable supply chain and we have much more surety of supply. And we do that by essentially collapsing today's supply chain, which is thousands of miles long, it's weeks or months of time and there's so many different players along the way which create lots of loss and inefficiencies. And we collapse that down into a building and we put that building close to where our consumers are and where our customers are and we can deliver a product that they said before 24 to 48 hours after harvest.Phil:
So the traditional farmer and I'm not sure what I'm saying outdoor farmer, you know, doesn't have to deal with all those racks, the technology, all the expense that Bowery has. So you know to you mentioned before that vertical farming is a small piece of agriculture, outdoor agriculture farming today. Yep, isn't it going to be too expensive to to build? You know, these kinds of vertical farms not only throughout the US. And you point out that you're close to the marketplace so you can deliver fresher. That real estate is more expensive than some of the real estate for farmland in the middle of the country.Irving:
Well, we won't even go into the conversation about cost of farmland, because farmland is certainly not getting any cheaper, it's getting much more expensive. But but we actually building farms in the middle of an urban, in Metropolis is not an efficient endeavor. It's not what we do. Our farms are located kind of outside the urban centers, actually closer to our retail partners, distribution centers. That's the most efficient way to get our product there. But you're absolutely right, there's an expense to building our farms. It's not, you know, it's not an extremely cheap endeavor. But comparing this against the farm isn't the right comparison. You have to compare what we've built to the entirety of the supply chain, which is not just the farm, it's all the equipment. Then it's the processing that has to happen and the packaging that has to happen, and the cold storage that has to happen, and the distribution and the actual cold chain and all the shipping and transport that has to happen. And then, when you start adding all of that up, there's quite a bit of cost, there's quite a bit of time and there's quite a bit of inefficiency that lives in all of those steps to go from growing a crop all the way to delivering a crop in today's traditional ecosystem. And where the efficiencies emerge is by collapsing all that down into one place, eliminating the need in many cases for things like processing and washing etc. Which do a lot of damage to the crop, they destroy the shelf life, they destroy the quality of the crop and being able to essentially grow and ship much more quickly, much more efficiently, and you eliminate a lot of those steps, a lot of the capital that goes into those steps and a lot of the inefficiencies into those steps. So that's why I said before it isn't the like for like in today's supply chain. It's actually a complete reinvention and reimagination. So is there a cost of capital? Yeah, absolutely, capital has to go into this, but there's a lot of capital costs and cat-backs that has to go into today's entirety of its supply chain Building these distribution centers, the shipping and the trucking that has to happen, all the equipment on the farm. And the truth is, as we have more and more challenges around climate, the requirement in the capital needed to adapt to more sustainable farming is going to be extremely expensive. There is a lot of capital is going to have to go into today's system just to try to manage against what is a very, very difficult, uncontrollable set of circumstances outside and there's no guarantee it would work.Phil:
And you mentioned earlier that the Bowery produce items that are delivered to your 2,600 supermarkets are the same price or less than People might be paying now for a conventionally grown with your organic produce.Irving:
That's right. So you're here, you're competing on the with an organic product today, and that's important so look into your crystal ball urban and where is?Phil:
where is Bowery and the produce industry in five years from now?Irving:
and and you know I this ties to one other thing I didn't say about your last question Innovation takes time to develop. You know, we, we could all. Let's just take it, it's such an obvious example. But take, take what's happening with electric vehicles right now. It was not too long ago, you know, call it 15 years ago Maybe, maybe 20 years ago, where people were convinced that electric vehicles were never gonna be possible, they were never to be profitable, you were never gonna be able to build them, you're never gonna be able to scale them, you would never be able to make them even remotely affordable for anybody. And it was a fool there and to even be thinking about an electric vehicle. And you fast forward to today and it's hard to argue that EVs are transportation's future and that's come from time and the innovation that happens around technology curves and we have so much of that innovation that we get to benefit at Bowery as well, though the obvious one that everybody talks about is the innovation and improvements in lighting and LEDs that we've seen. That transpired. It will continue to take place. But we have innovation in Computing power and what you can do with artificial intelligence and what you can do with computer vision and the way we use that at Bowery is it helps us to grow more efficiently. It helps us to grow more productively, more sustainably, and helps us to operate more efficient, effectively and more efficiently as well, and all of our farms are connected through the operating system. So the more farms we build, the stronger our network gets, the more we learn and the more improvement you see, and so there's so many tailwinds from a technological perspective. That drives improvement, cost improvement, productivity improvement, quality improvement, breath of product improvement, and so we've seen it with EVs, we've seen it with renewable energies. There the world is filled with today with ubiquitous technologies that at some point were impossible and never going to exist. All right. So what is the future look like? I can say it's in five years. What I can tell you for certain is Vertical farming is going to be a much more important aspect of not only the US food system but the global food system. It's going to represent a larger share of produce, not just in the categories we're in today, but it's gonna represent a larger share across more categories as well, because we've talked a lot about climate, but the other thing we haven't talked about is food security, is national security, and In the world we're living in today, where there's lots of questions about globalization, there's lots of questions about regionalization, security of supply chains and regional supply chains. What we can provide at Bowery is that reliable, consistent supply of produce in any region, anywhere in the world, year-round, and that has a lot of value too. So you're going to see more focus, more attention, more energy around indoor farming and vertical farming and you're gonna see it take a bigger stage in the pros. Doesn't mean it's gonna be the only answer. Farming and agriculture is a huge industry that requires many different solutions to help solve the problems in front of it. There will always be outdoor agriculture. We need outdoor agriculture. There's lots of other great innovations that we're seeing around inputs, biological inputs, etc. They're gonna all take place. Take it to be a part, rather, of the solutions that we're gonna need in the coming decades as we think about food, agriculture and climate. But there's no question, vertical farming has a very important place on the mantle in the produce space as we move forward.Phil:
Irving, thanks so much for joining us today. I'm lost in the supermarket and we'll be looking for Bowery to be 20 times the size in just a few years.Irving:
Thanks so much for having me, Phil.