7 ms·

This may work for a few Whole Foods customers who pay $5 for a bottle of herb infused water but I wonder if the cost is going to be reasonable enough for most p

This may work for a few Whole Foods customers who pay $5 for a bottle of herb infused water but I wonder if the cost is going to be reasonable enough for most people. Real estate cost alone may trump every other cost savings. Even if that "farm" can produce 10x more per square foot from vertical farming, the real estate cost of a grocery store in a city is a lot more expensive than a farmland in the middle of no where.

zitterbewegung 9y ago
Maybe it would be available to Amazon Prime or even an add on paid service to prime. Also they would target areas similar to their two hour delivery.
TheIronYuppie 9y ago
But what if the store could produce its own plants at 1/10th the cost of purchasing them elsewhere (just light and water)? It's not like they don't already have floor space taken up with plants today - they just buy them from elsewhere.
- aetherson 9y ago
  They "only" cost "light and water" elsewhere, too (actually, obviously, far more than just light and water). Do you think that 90% of the wholesale cost of produce is transportation costs? If so, why do you think that?
- peterjlee 9y ago
  The plants taking up space in the grocery store have a pretty fast turnaround time while these basils will take few weeks to grow. Though I guess they could have these "farms" in some cheap warehouse then move it to the grocery store only when they're ready. Ok, this seems a bit more viable now.
- apendleton 9y ago
  These are hydroponic systems, so it'll be distilled water, power for high-intensity grow lights (where stuff grown outdoors, at least in-season, gets this from the sun), nutrient solution (in an outdoor context, some of this would be "free"-ish, from soil, and some would be from fertilizer), plus lifetime-amortized costs of the grow setup: pumps, filters, etc. And all of that besides the water you'd have to ship anyway from wherever it's manufactured. Granted, if we're talking lettuce, it's like 95% water by weight anyway, and a decent percentage of what's left is carbon that's fixed from the air, so there's probably a shipping savings, but I still don't think this whole setup would be particularly cheap.
prostoalex 9y ago
> Real estate cost alone may trump every other cost savings. In urban environments yes. In suburbia though grocery stores typically can name their own rent for headlining a shopping plaza, as that brings the highly desired foot traffic.
zeep 9y ago
yeah, it is probably cheaper to just get your own hydroponic system and it can be pretty much automated too.
Mizza 9y ago
It's for weed. They're all for weed. Every "indoor farming" company is just trying to get capital and build a brand with a cover story for when marijuana is inevitably legalized. The only thing that it really makes positive ROI sense to grow in this kind of way in the United States is for marijuana. Everbody working in the indoor farming industry knows this, the whole "we're saving the world by growing basil" thing is said with a big smirk. (Similarly, big pharma has acres and acres of farmland just waiting to be used for this purpose.)
- wernercd 9y ago
  I get the desire to say "it's for weed". You can say the same thing about "its for porn" (VHS, DVD, Bluray, high speed internet, etc)... But I don't think it's the same. There's going to be an inflection point where the cost to transport lettuce from Mexico and California is going to be more than the cost of some vertical farm down the street. There's also this slow drumbeat of "Save the Planet!" and "Oil is da DEBIL Bobby!". Making stuff local and "sustainable" is marketable - even at a premium. There's a reason people go to local farmers markets. I can't say you're not wrong that "it's for the weed, man"... but I think you're limiting yourself if you think that's the ONLY reason - or even the biggest reason.
  - Dylan16807 9y ago
    >There's going to be an inflection point where the cost to transport lettuce from Mexico and California is going to be more than the cost of some vertical farm down the street. How sure are you about that? Buildings are expensive, and you can fuel up trucks with solar arrays.
    - rtpg 9y ago
      there was a planet money about getting a t-shirt made, and like... 40% of the cost was for the last couple mile deliveries. No matter how automated 95% of the journey is, the last mile will require someone to be there and do deliveries. In theory local producers have less coordination problems with their consumers.
condiment 9y ago
Real estate is cheap, power is cheap, personnel are cheap, equipment is cheap. A few years ago I was pursuing aquaponics as a hobby over the summer. It was clear then that economies of scale were rapidly driving down the costs of indoor horticulture. My aquaponics project failed, but the basic economics of grocery-attached farms make a lot of sense. I built a business model to determine the economics of running a farm in a shipping container that could be deployed to an underutilized Whole Foods parking lot. The model accounted for a 81m3 shipping container being filled top-to-bottom with fruiting plants, like tomatoes, but it's easily adjustable to other plants, like lettuces. The model is pretty sensitive to things like the productive life of the plant, lead time to productivity, and sale price. Selling heads of lettuce for $3 each yields around $6000/yr in gross revenue per container per year. This was $17k net less $720 in labor, $6k in equipment, $3k in real estate and $1k in electricity. Lots of room for optimizations that could push this business over the $1B mark. The model, in case anyone's interested: https://docs.google.com/spreadsheets/d/1DkjOIs7hXyxIiN_iWXK0M21Rjd4L0lTCTHaolR8LwTs/edit?usp=sharing https://docs.google.com/spreadsheets/d/1DkjOIs7hXyxIiN_iWXK0...
- lovemenot 9y ago
  Just a nitpick, but yours was not an aquaponic system as it apparently was not integrated with growing fish with the plants. A modular system like in the article could be extended to be aquaponic. If so, they could take advantage of waste food from the host retail store / restaurant as input to the fish. Such a system might do well in China where shoppers are accustomed to selecting live fish.
- nom 9y ago
  I had to blink twice after reading "heads of lettuce for $3", then I googled "US fresh produce price". Wow. Indoor farming actually makes sense in the US market. Edit: yes, I'm from Europe, obviously. And now I'm sad :/
  - slackingoff2017 9y ago
    Not sure where you got that price, a head of lettuce is less that a dollar here in the Midwest US
prawn 9y ago
Many grocery stores/supermarkets are typically squat affairs with a lot of allowance to expand vertically. That adds to construction costs but not to the land cost (which is the expensive part in a city). They could design supermarkets with growing space within a second storey. And because they're growing in trays or lightweight aggregate, it wouldn't have a metre-deep layer of damp dirt to account for. (Obviously the construction costs could still outweigh the savings in transport and spoilage.)

zitterbewegung 9y ago

Maybe it would be available to Amazon Prime or even an add on paid service to prime. Also they would target areas similar to their two hour delivery.

TheIronYuppie 9y ago

But what if the store could produce its own plants at 1/10th the cost of purchasing them elsewhere (just light and water)? It's not like they don't already have floor space taken up with plants today - they just buy them from elsewhere.

aetherson 9y ago
They "only" cost "light and water" elsewhere, too (actually, obviously, far more than just light and water). Do you think that 90% of the wholesale cost of produce is transportation costs? If so, why do you think that?
peterjlee 9y ago
The plants taking up space in the grocery store have a pretty fast turnaround time while these basils will take few weeks to grow. Though I guess they could have these "farms" in some cheap warehouse then move it to the grocery store only when they're ready. Ok, this seems a bit more viable now.
apendleton 9y ago
These are hydroponic systems, so it'll be distilled water, power for high-intensity grow lights (where stuff grown outdoors, at least in-season, gets this from the sun), nutrient solution (in an outdoor context, some of this would be "free"-ish, from soil, and some would be from fertilizer), plus lifetime-amortized costs of the grow setup: pumps, filters, etc. And all of that besides the water you'd have to ship anyway from wherever it's manufactured. Granted, if we're talking lettuce, it's like 95% water by weight anyway, and a decent percentage of what's left is carbon that's fixed from the air, so there's probably a shipping savings, but I still don't think this whole setup would be particularly cheap.

prostoalex 9y ago

> Real estate cost alone may trump every other cost savings. In urban environments yes. In suburbia though grocery stores typically can name their own rent for headlining a shopping plaza, as that brings the highly desired foot traffic.

zeep 9y ago

yeah, it is probably cheaper to just get your own hydroponic system and it can be pretty much automated too.

Mizza 9y ago

It's for weed. They're all for weed. Every "indoor farming" company is just trying to get capital and build a brand with a cover story for when marijuana is inevitably legalized. The only thing that it really makes positive ROI sense to grow in this kind of way in the United States is for marijuana. Everbody working in the indoor farming industry knows this, the whole "we're saving the world by growing basil" thing is said with a big smirk. (Similarly, big pharma has acres and acres of farmland just waiting to be used for this purpose.)

wernercd 9y ago
I get the desire to say "it's for weed". You can say the same thing about "its for porn" (VHS, DVD, Bluray, high speed internet, etc)... But I don't think it's the same. There's going to be an inflection point where the cost to transport lettuce from Mexico and California is going to be more than the cost of some vertical farm down the street. There's also this slow drumbeat of "Save the Planet!" and "Oil is da DEBIL Bobby!". Making stuff local and "sustainable" is marketable - even at a premium. There's a reason people go to local farmers markets. I can't say you're not wrong that "it's for the weed, man"... but I think you're limiting yourself if you think that's the ONLY reason - or even the biggest reason.
- Dylan16807 9y ago
  >There's going to be an inflection point where the cost to transport lettuce from Mexico and California is going to be more than the cost of some vertical farm down the street. How sure are you about that? Buildings are expensive, and you can fuel up trucks with solar arrays.
  - rtpg 9y ago
    there was a planet money about getting a t-shirt made, and like... 40% of the cost was for the last couple mile deliveries. No matter how automated 95% of the journey is, the last mile will require someone to be there and do deliveries. In theory local producers have less coordination problems with their consumers.

condiment 9y ago

Real estate is cheap, power is cheap, personnel are cheap, equipment is cheap. A few years ago I was pursuing aquaponics as a hobby over the summer. It was clear then that economies of scale were rapidly driving down the costs of indoor horticulture. My aquaponics project failed, but the basic economics of grocery-attached farms make a lot of sense. I built a business model to determine the economics of running a farm in a shipping container that could be deployed to an underutilized Whole Foods parking lot. The model accounted for a 81m3 shipping container being filled top-to-bottom with fruiting plants, like tomatoes, but it's easily adjustable to other plants, like lettuces. The model is pretty sensitive to things like the productive life of the plant, lead time to productivity, and sale price. Selling heads of lettuce for $3 each yields around $6000/yr in gross revenue per container per year. This was $17k net less $720 in labor, $6k in equipment, $3k in real estate and $1k in electricity. Lots of room for optimizations that could push this business over the $1B mark. The model, in case anyone's interested: https://docs.google.com/spreadsheets/d/1DkjOIs7hXyxIiN_iWXK0M21Rjd4L0lTCTHaolR8LwTs/edit?usp=sharing https://docs.google.com/spreadsheets/d/1DkjOIs7hXyxIiN_iWXK0...

lovemenot 9y ago
Just a nitpick, but yours was not an aquaponic system as it apparently was not integrated with growing fish with the plants. A modular system like in the article could be extended to be aquaponic. If so, they could take advantage of waste food from the host retail store / restaurant as input to the fish. Such a system might do well in China where shoppers are accustomed to selecting live fish.
nom 9y ago
I had to blink twice after reading "heads of lettuce for $3", then I googled "US fresh produce price". Wow. Indoor farming actually makes sense in the US market. Edit: yes, I'm from Europe, obviously. And now I'm sad :/
- slackingoff2017 9y ago
  Not sure where you got that price, a head of lettuce is less that a dollar here in the Midwest US

prawn 9y ago

Many grocery stores/supermarkets are typically squat affairs with a lot of allowance to expand vertically. That adds to construction costs but not to the land cost (which is the expensive part in a city). They could design supermarkets with growing space within a second storey. And because they're growing in trays or lightweight aggregate, it wouldn't have a metre-deep layer of damp dirt to account for. (Obviously the construction costs could still outweigh the savings in transport and spoilage.)