"At the end of the day, no vertical farm is ever going to give a 10-time return nor will they ever be a Facebook or so. It's hard work and a tough business with high volume and low margin. There has been a quest for easy money and making unrealistic expectations for people who don't know any better. VC money is not friendly to this industry, as a lot of entrepreneurs allowed themselves to be victimized by VCs. They've been very willing to throw money at people and go out and spend it on things they should have not spent it on," says Glenn Behrman, Founder of CEA Advisors.
In a panel on 'Cutting through the noise and navigating the future' moderated by Allison Driskill with Philips, joining her are Jennifer Waxmann with Seed2Source, and Joe Swartz with AmHydro.
Continuing on the matter, Jennifer Waxmann adds, "There's a lot of room to grow yet in the industry." There have been successes and a lot was focused on unit economics. "Yet, CEA is still relatively new in the US. Therefore, we are all still learning and should be honest about it. It has a lot of opportunity but we're not sharing the best practices. We're not competition, so we should work together to crack the code of economics and profitability. But we're not there yet."
Affirming, Joe says, "Validation, validation, validation." Due diligence, looking at the failures that have caused fractions caused many growers to be in rough weather for the past 12-18 months due to failures and unrealistic expectations.
Allison Driskill, Glenn Behrman, Jennifer Waxmann, and Joe Swartz
Greenwashing
When asked how sustainability plays a role in vertical farming, Glenn pointed out that "sustainability is all part of running a good business and should be part of everyone's game plan." It has numerous components, such as maximizing yield, and recycling substrate, labor, etc. "Ultimately, Sustainability is just part of having a profitable business model."
According to Jennifer, the 'greenwashing' word is being redefined every year. "We all intend to adopt a zero-waste model when creating our operations. Should that be the goal? Yes, but you cannot burden yourself on not achieving that as it's quite difficult. One of the mishaps, I think in CEA is, water usage. How much water do you use when you clean?"
Often, the water usage is left out of the equation, but who has ever actually measured and confirmed the less water usage? "I think we need to up goals and reevaluate them every year but trying to start from the beginning with a zero waste plan and the 95% less water usage and all greenwash words have to stop as we're all getting called out for it."
"What are we actually doing? Farming! As it relates to sustainability working with growers all over the world, sustainability is one of the most overused words in ancient languages."
Answering where Joe sees the big sustainability gap is changing, but for a long time, the industry talked about economic sustainability. Yet, that is and should be the bedrock that everything we do is built on. "Creating green jobs, water conservation and energy conservation which are all critically important. However, without economic sustainability, everything else goes away."
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