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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 cle

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
- j2bax 9y ago
  Out of interest how much is a head of fresh lettuce in your country?
  - Balero 9y ago
    In the UK, they can go for as little as 0.49 ($0.60), but average closer to 0.8 ($1.00)
  - nom 9y ago
    0.79€ ($0.88) @ REWE in Germany. And that's one of the more costly discounters. Lidl and Penny are cheaper, but just as good. Have a look: http://www.penny.de/angebote/aktuell/liste/Ab-Montag http://www.penny.de/angebote/aktuell/liste/Ab-Montag
- gabrielcsapo 9y ago
  In America we are not locally self sufficient. California is a large producer of fruit and vegetables for most of the year. We used to be focused on small towns that could be self sufficient now we just accept getting packaged garbage and the price we pay for it. That's why we have people eating mcdonalds everyday.
- ryanx435 9y ago
  In Minneapolis, heads of lettuce are 1.49. Romaine is maybe 1.79. Boston style lettuce is maybe 2.00. 3 for lettuce is ridiculous.
- Baeocystin 9y ago
  Produce is dirt cheap in the states. I picked up two heads of iceberg and a cabbage for $2 at the local farmer's market last Friday, and nabbed a six-avocados-for-a-dollar deal while I was there. The only people spending $3 for a head of lettuce are people looking for a way to separate their food from everyone else.
- cakedoggie 9y ago
  It is that much at least in Australia.
hackerews 9y ago
Why did your project fail?
- condiment 9y ago
  Variety of reasons. Early on, I had a lot of trouble getting the flood and drain system to work correctly. Substrate would get caught in the siphon, and prevent it from initiating the drain. Once the flood and drain system was working, I ran into issues related to my use of heterogeneous substrate. I had both hydroton pellets and perlite in the grow bed. When you mix substrates of multiple densities, both of which are lighter than water, the flood and drain cycle will result in the lightest substrate filtering to the top of the bed. This caused all of my plants to sink into the water. After solving that problem, it became a simple matter of fish nutrition. I live in Colorado, which has very hot summers. Around 90°F is typical, but in the evenings the temperature gets down quite low. As it would happen, the average daily temperature was between 60 and 70°F. Fish modulate their diet according to the temperature of the water that they're in. And my koi would not eat enough. In the end, the project was a lot of fun and I learned a lot. But I couldn't justify repeating the effort after all of the fish died in the winter. It didn't seem humane.
  - j2bax 9y ago
    Thanks for sharing! It's seems like regulating the temperature of the water within a few degrees isn't unprecedented, is it?
  - fwefwwfe 9y ago
    Why koi instead of tilapia?
kcorbitt 9y ago
> 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. Am I missing something, or did you accidentally flip the words "gross" and "net" above?

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
j2bax 9y ago
Out of interest how much is a head of fresh lettuce in your country?
- Balero 9y ago
  In the UK, they can go for as little as 0.49 ($0.60), but average closer to 0.8 ($1.00)
- nom 9y ago
  0.79€ ($0.88) @ REWE in Germany. And that's one of the more costly discounters. Lidl and Penny are cheaper, but just as good. Have a look: http://www.penny.de/angebote/aktuell/liste/Ab-Montag http://www.penny.de/angebote/aktuell/liste/Ab-Montag
gabrielcsapo 9y ago
In America we are not locally self sufficient. California is a large producer of fruit and vegetables for most of the year. We used to be focused on small towns that could be self sufficient now we just accept getting packaged garbage and the price we pay for it. That's why we have people eating mcdonalds everyday.
ryanx435 9y ago
In Minneapolis, heads of lettuce are 1.49. Romaine is maybe 1.79. Boston style lettuce is maybe 2.00. 3 for lettuce is ridiculous.
Baeocystin 9y ago
Produce is dirt cheap in the states. I picked up two heads of iceberg and a cabbage for $2 at the local farmer's market last Friday, and nabbed a six-avocados-for-a-dollar deal while I was there. The only people spending $3 for a head of lettuce are people looking for a way to separate their food from everyone else.
cakedoggie 9y ago
It is that much at least in Australia.

hackerews 9y ago

Why did your project fail?

condiment 9y ago
Variety of reasons. Early on, I had a lot of trouble getting the flood and drain system to work correctly. Substrate would get caught in the siphon, and prevent it from initiating the drain. Once the flood and drain system was working, I ran into issues related to my use of heterogeneous substrate. I had both hydroton pellets and perlite in the grow bed. When you mix substrates of multiple densities, both of which are lighter than water, the flood and drain cycle will result in the lightest substrate filtering to the top of the bed. This caused all of my plants to sink into the water. After solving that problem, it became a simple matter of fish nutrition. I live in Colorado, which has very hot summers. Around 90°F is typical, but in the evenings the temperature gets down quite low. As it would happen, the average daily temperature was between 60 and 70°F. Fish modulate their diet according to the temperature of the water that they're in. And my koi would not eat enough. In the end, the project was a lot of fun and I learned a lot. But I couldn't justify repeating the effort after all of the fish died in the winter. It didn't seem humane.
- j2bax 9y ago
  Thanks for sharing! It's seems like regulating the temperature of the water within a few degrees isn't unprecedented, is it?
- fwefwwfe 9y ago
  Why koi instead of tilapia?

kcorbitt 9y ago

> 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. Am I missing something, or did you accidentally flip the words "gross" and "net" above?