The product demand keeps growing. Inevitably, the pandemic has accelerated this demand for food quality and availability in Hong Kong. “I think it’s because of the following reasons. One being that Common Farms can deliver with consistency, speed, and quality. Secondly, as people aren’t traveling they have disposable income to spend locally. The customers we serve are booked out for months. Lastly, pricing for imported produce fluctuates, which over time has a great impact on our customers.”
Common Farms, a Hong Kong-based are a food production company that figured to solve the food value chain problem. The company currently supplies the local market with margin, unconventional, specialty crops such as edible flowers, microgreens, garnish leaves, and herbs. These products require very strict temperature and time controls in order to deliver optimal freshness and flavors. “This is particularly true for the market we operate in, a warm and very humid climate. The current only alternative for our customers is air-flown in produce with extremely short shelf-life and high wastage,” she adds.
Solving the friction points
Jessica is persistent in advocating for solving the problem in the food value chain, in which there are too many friction points between the consumer and the produce. Part of the solution in the context of Hong Kong is CEA vertical farming. “Especially because we import 95-99% of the food we consume here. Back in the 80s, we were producing 30-50% of what we consume.”
“Vertical farming is the right fit for Hong Kong. It is one of the most food-vulnerable places in the world, with one of the highest GDP in the world with a 7.5m population. At least 5.26% of its annual GDP is spent on food importation but at the same time, throws away 3-4 thousand tons of food daily. It's irrational and unsustainable.”
Inside the farm
According to Jessica, there’s lots of space scarcity in Hong Kong, which is notorious for the cost of space. It’s important to understand the regulatory system and economics of the place you operate. The city actually has the landmass, however, regulations passed down from the British colonization prevent the development (still unchanged), which leads to scarcity. Of course, excavation of Hong Kong's land does play a part. “More importantly, our government's wealth is through real estate.”
Given the harsh climate change, which is very humid, hot, wet and constantly fluctuating. Wet climates are much harder to manage and calibrate than dry climates because humidity can easily cause molding and pest infestation.
“We’re planning to expand, as the mission is in our name,” says Jessica. “Make what we do more common, which means we are looking at multiple farms. The intention is to scale, methodically. But to do that, we have to get our processes and principles right for us, for our customers, to do this, we have to start at a small scale first. We need to get our unit economics right, understand them fully, make affordable mistakes and learn and pivot quickly as needed.”
Common Farms is well aware the specialty produce it currently grows won't have the multi-billion dollars of demands in Hong Kong. However, they’re okay to start with that. The company’s goal is to scale the principles and processes designed around high standards it holds (by itself and customers) to different crop categories.
“At this early stage we are at, our focus will remain in Hong Kong. Get it right here first and we will then be better positioned for expansion when the time is right. It’s very tempting with the current demands, interests, and global momentum to go wide and attempt to beat competitors. But meaningful solutions require discipline, patience and time to build. We are still in our infancy; we cannot afford premature scaling at this point. It's a marathon and not a sprint for us.”
Common Farms’ focus is on products that have high yield, high margin produces with a short production cycle. Space is scarce and extremely expensive in Hong Kong. “Therefore, it’s by design that we have to focus on premium products in order to sustain in our context at this early stage,” Jessica affirms.
Jessica hopes to see non-commercial consumers consider the price per volume and rather seek the transparency and quality of produce. The focus should be on quality and not quantity once the survival needs are met.
“Of course, a level of genuine support and focus from the government and infrastructural businesses for local food production as part of a city’s infrastructure and not just a 'nice to have' or to check off some 'ESG' expectations would be nice. It's not going to happen quite yet, but the day will come and we will be prepared for that.”
Common Farms will continue to grow and expand the diversity of products that are exceptional within the specialty greens category. We are also in the R&D stage for other categories.