We have a major global food crisis confronting us and we have a need for a new farming paradigm that addresses the various health, safety, environmental, and social concerns that we face today. How do we set up a business and organization that will respond, challenge, and lead the future of agriculture?

AeroFarms is a start-up agricultural company that uses an innovative technology and business model to address this pressing world challenge. AeroFarms grows and sells leafy greens grown in warehouses, in cities, all over the world at any time of the year. An environmental champion, AeroFarms^® is leading the way to address our global food crisis by building, owning, operating, and licensing farming systems that grow locally flavorful, safe, healthy leafy greens in a sustainable and socially responsible way drawing from the principles of Cradle-to-Cradle. Harvested at their peak for the best flavor and nutritional value, our high-quality, pure leafy greens set a new culinary standard for freshness. We fundamentally transform the agriculture business by disintermediating the supply chain by bringing food production to where the consumer is. Our commitment to the local community is about creating jobs, educating families, and donating our fresh leafy greens to schools and food banks. We are a different kind of company, focused on helping people care about their food.^TM

Context

AeroFarms^®, an award-winning cleantech company, has developed state-of-the-art farm systems for growing leafy green vegetables, setting a new standard for locally produced and totally protected agriculture. Founded in 2004, we completed our Series A Financing for $1.7 million in 2009 with The Quercus Trust and 21 Ventures. Our achievements to date include:

An experienced management team with expertise in: horticulture, farming systems, regulatory sciences, nutritional health, the food value chain, start-up and expansion stages of businesses as well as international expansion.
Five operational farms, domestically and internationally, selling to retailers like Whole Foods as well as restaurants.
Experience having grown over 250 different types of leafy green vegetables since 2004 in our aeroponic farming systems.

Our goal is to become the largest distributed local farming organization in the world in order to address our world food crisis. Local Farming, Global Solution.^TM is at our very essence, and we will grow through a variety of investment opportunities in our corporation, individual farms, and joint ventures, and an incredible resolve for helping people care about their food as passionately as we do.

Triggers

GLOBAL FOOD CRISIS

Population Growth and Urbanization

The global food system will experience an unprecedented confluence of deleterious pressures over the next 40 years. On the demand side, global population size will increase from nearly seven billion today to eight billion by 2030, and probably to over nine billion by 2050 requiring us to increase our food production by 70%.[1] A big part of the population growth is being driven by urbanization where the # of cities over 1,000,000 has exploded. In the developed world, over 70% currently live in urban environments and the developing world is over 30%. Many people are likely to be wealthier, creating demand for a more varied, high-quality diet requiring additional resources to produce. On the production side, competition for land, water and energy will intensify, while the effects of climate change will intensify with more frequent damaging natural calamities.

Decreased Arable Land

The amount of arable land available for each person has dropped from 1 acre in 1970 to half an acre in 2000 and will be one third of an acre by 2050. 25% of the world's land is now "highly degraded," with soil erosion, water degradation and biodiversity loss. Another 8% is moderately degraded, while 36% is stable or slightly degraded and 10% is ranked as "improving." The rest of the Earth's surface is either bare or covered by inland water bodies.

Water Scarcity

A non-renewable resource, water around the world is becoming more scarce and contaminated while groundwater is becoming more polluted by agricultural runoff and other toxins. Irrigating crops uses 70% of all available fresh water on Earth, and rates of water extraction for irrigation are exceeding rates of replenishment in many places Additionally, this water — after being contaminated with pesticides, herbicides, fungicides, and fertilizers — seeps into rivers, streams, and aquifers and causes salinization of once arable land; this toxic runoff is responsible for more ecosystem disruption than any other kind of water pollution. Water is inextricably linked to energy -- California uses an extraordinary amount of power to move water around the state. In fact, a fifth of the electricity used in California is intertwined with water. So is 30% of the natural gas, according to the California Energy Commission.[2]

Natural Disasters

A warming climate has led to changes in the frequency, intensity, spatial extent, duration, and timing of extreme weather and climate events, causing unprecedented extreme weather and climate events.[3] Here in the U.S., we have faced increased droughts, floods, and hurricanes resulting in the fact that only 50 percent of all crops planted in the United States ever reach the dinner table.[4] The U.S. government's crop insurance subsidy rose to $7.3 billion last year from $951 million in 2000. It is expected to rise to $7.6 billion this year, highlighting how farming risks have increased and the misplaced funding from the Government on band-aid solutions.[5]

Dangers of Centralized Food Production and Supply Chain Issues

Centralized food production has reduced the security of our food supply and contributed to the destruction of biodiversity, adding energy costs and decreasing the nutritional value of the food on people’s plates. Additionally, there are tremendous inefficiencies at each step from growing to harvesting to shipping to retail to the consumer, resulting in billions of dollars lost each year.

The Center for Disease Control and Prevention (CDC) estimates that one in six Americans get sick each year from food contaminated with bacteria, viruses and parasitic protozoa. While most of these 50 million cases of foodborne illness are mild, they are associated with more than 100,000 hospitalizations and over 3,000 deaths each year. Reducing these numbers has proven to be a challenge because America’s food supply is a massive and complex system comprised of hundreds of thousands of firms that provide consumers with hundreds of billions of dollars worth of food each year. Moreover, this system is constantly in flux, due to changing consumption patterns, changing business landscapes, development of new products, and increasingly globalized supply chains.[6]

Federal, state and local government agencies are tasked with overseeing all of these firms, big and small, along the farm to fork continuum – growers, producers, processors, transporters, importers, wholesalers, retailers, restaurants and more. Yet, particularly in today’s economic climate, budget resources are limited. Due to these very real and implicit constraints, the Food and Drug Administration (FDA and the U.S. Department of Agriculture’s Food Safety and Inspection Service (USDA/FSIS) must continually make decisions about how to prioritize efforts and how to allocate their resources to best ensure the safety of America’s food. The number of consumers feeling that food safety issues are most likely to occur during transport has more than doubled in recent years.[7] Additionally, according to the FDA, only 2% of imported products are even inspected.[8]

Within produce, Leafy Greens are the most easily contaminated crop. From 1998 to 2007 in the U.S., there have been 207 disease outbreaks in leafy greens alone, accounting for 80% of all produce outbreaks and 9,000 needless illnesses. From a healthcare perspective, the most costly illness is E. coli, resulting in hundreds of millions in insurance losses.[9] The main cause of the E. coli outbreak in spinach in 2006 was runoff from a nearby feedlot for pigs and cattle. The more food that is grown next to unsanitary areas, the more potential for contamination exists.[10]

Simply put, the cost of doing business needs to factor in appropriate food safety testing.

Produce and Fossil Fuels: A Tightrope Walk

The USDA calculated that while total per capita US energy consumption fell 1.8% between 1997 and 2002, food-related per capita energy use grew nearly 16.4% in the same period, as the industry has come to rely on more energy-intensive technologies. Between 2002 and 2007 this trend gained ground. While overall U.S. energy consumption per capita fell by 1%, per capita food-related energy grew nearly 8%. As a share of the U.S. energy budget, food-related energy grew from 12% in 1997 to about 15% a decade later. The increased reliance on energy comes as the agribusiness industry attempts to reduce labor use.[11]

The cost of produce is driven by two key inputs based on fossil fuels – nitrogen fertilizer and diesel for tractors and transportation, and it is the consumer who pays any price increases due to availability issues and rising market demands. For example, in 2002, it cost $1.10 per mile to transport a load of lettuce from Salinas, California, to New York City. In 2010, that number reached $1.80 per mile, increasing the expenditure by $2,100 more per truck.[12] In 2011, the price of diesel has risen, adding up to $2.00 in costs per pound for leafy greens.[13]

Harmful Chemicals

Single-crop farming requires the use of large amounts of pesticides and nitrogen fertilizers to maximize crop yields and in turn, profits. However, there is an alarming amount of research that links these chemicals to many human diseases and cancer.[14] People are possibly affected by:

Damage to the nervous system, reproductive system and other organs
Developmental and behavioral abnormalities
Disruption of hormone function
Immune dysfunction[15]

The Environmental Working Group publishes an annual list of the most dangerous foods to avoid due to levels of pesticides found on them due to conventional farming methods. If these foods including apples, strawberries, bell peppers, and lettuce are avoided, people can lower their pesticide intake by up to 80%. But, why should we allow such contamination to remove these healthy foods from our diet?

Even certified organic farming has risks of contamination because crops are often heavily treated with “natural fertilizers” like manure, which if not handled correctly can harm the food with fecal (E. coli) contamination and lead to dangerous run-off issues.

Farmers routinely over-apply nitrogen fertilizers to their soils because they cannot quantify how their farm management practices impact soil nutrient levels. Over-application of nitrogen fertilizers leads to runoff, which is responsible for algal blooms and oceanic dead zones. This is not an issue that can simply be solved by more frequent or more intensive soil testing – it is the combination of soil test data with detailed information about farming practices that will ultimately help farmers optimize their fertilizer applications for their unique conditions.[16] In Salinas, California, the “Salad Bowl” for lettuce production is plagued by its dependence on heavy nitrate loading causing major costly issues to the fresh water supply for the next 30 years even if the nitrates were eliminated today. The estimated costs to remediate will cost $20 million to $35 million each year for decades.[17] In addition, food production systems frequently emit significant quantities of greenhouse gases and release other pollutants that accumulate in the environment.[18]

Genetically Modified Organisms (GMO):

The introduction of genetic alteration to our food is an area that some argue present possible concerns to the purity of our food, leading a number of countries to ban farmers from using GMO’s or to have the retail packaging clearly state that GMOs have been used to produce the product. Some people who criticize GMO argue that some of the potential dangers of GMOs include:[19]

Allergens and toxicities
Development of pesticide resistant organisms creating ‘superweeds’ and ‘superpests’
Horizontal gene transfer and genetic drift
Disruption of soil microbiology and biochemistry
Increased pesticide use and damage to beneficial organisms
Loss of biodiversity

Without change, the global food system will continue to degrade the environment and compromise the world’s capacity to produce food in the future.

MANAGEMENT CRISIS

How do we move beyond the short-term mentality of sheer profits without taking into consideration the external costs to the planet that are born by the people? With AeroFarms, we have set up a new type of company that at its outset is focused on being good for the planet, good for people, and good for our shareholders. Our CEO David Rosenberg has been able to draw on his experience as CEO of The McDonough Group and close working relationship with Bill McDonough to ground our management philosophy with the principles of Cradle-to-Cradle.

[1] United Nations. "State of the World's Land and Water Resources for Food and Agriculture." 2011.

[2] Greentech Media. “Realities of VC Investment in Water Tech.” Eric Wesoff. September 1, 2010.

[3] Intergovernmental Panel on Climate Change (IPCC). “Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation,” 2012.

[4] Columbia Magazine, “New Crop City”, David Craig, Fall 2011.

[5] NY Times. “Report Says Crop Subsidy Cap Could Save Billions. Ron Nixon. 4/11/12.

[6] “2011 Ranking the Risks - The 10 Pathogen-Food Combinations with the Greatest Burden on Public Health,” Michael B. Batz1, Sandra hoffMann2 and J. Glenn Morris, Jr.

[7] U.S. Grocery Shopper Trends 2008, FMI, 2008.

[8] MSNBC, October 3, 2011

[9] Centers for Disease Control and Prevention. “Foodborne Illness: General Information”.

[10] FDA, Final Report on 2006 Spinach Outbreak.

[11] Financial Times, 2011 World Food Report, Link Between Fuel and Crop Prices Grows Stronger. October 2011.

[12] USDA, Transportation Services Branch, Agricultural Refrigerated Truck Quarterly 2005-2011.

[13] Industry research from based on Earthbound Farms price list.

[14] Journal of Epidemiology and Community Health. “Persistent toxic chemicals in the U.S. food supply.” Schafer, K, Kegley, 2002.

[15] EPA Study - Environmental Health Perspectives Issue, September 2005.

[16] Interview with AgSquared (agriculture software company) management.

[17] “Nitrate poses problems for Salinas Valley drinking water.” Thomas Harter and Jay Lund – Professors with University of California at Davis Center for Watershed Sciences. March 16, 2012.

[18] Foresight. The Future of Food and Farming Exec. Summary. Government Office for Science, London. 2011.

[19] Environmental Sciences Europe. “Genetically modified crops safety assessments: present limits and possible improvements”. Gilles-Eric Séralini, Robin Mesnage, Emilie Clair, Steeve Gress, Joël S de Vendômois and Dominique Cellier. March 2011.

Key Innovations & Timeline

Our technology founder Ed Harwood set out to understand why aeroponics used in R&D for their control and precision were not used on a commercial scale for farming. Like a classic Hewlett and Packard start up story akin to starting out in the garage, Ed and an engineer, Travis Martin, embarked on a path of discovery at home and in a small office spreading out leafy greens on towels, testing fabrics, and trialing different system configurations. Achieving a major break-through with cloth in an aeroponic system and hearing accolades from local distributors gave Ed the confidence and impetus to leave Cornell Cooperative Extension and set up our first commercial farm. Perhaps, Ed’s home will one day have a bronzed plaque proclaiming it as the “Birthplace of Totally Protected Agriculture.” Our innovation has continued for further refinements for misting systems, reusable cloth growing media, lower energy-consuming LED lighting systems, and more effective overall design. The innovation also spans from technology to social and environmental responsibilities drawing directly from the principles of Cradle-to-Cradle and understanding the impact that we have on the planet, people, and profits. As a result, our mission, vision, and core values are the foundation of our management philosophy guiding us on not only what we do but also how we do it.

In 2003, our technology founder, Ed Harwood, a former associate professor at Cornell Cooperative Extension, conceived of an aeroponic farm application for commercial use.
In 2004, Ed built our first commercial aeroponic farm in the Ithaca, NY area, selling locally grown leafy greens to supermarkets and restaurants for four years.
In 2009, a shift to LED lights was made to lower the energy consumption of the artificial lighting.
In late 2009, The Quercus Trust and 21 Ventures invested $1.7 mm in our Series A round and strategy shifted to selling our farming technology as an Original Equipment Manufacturer (OEM).
In 2010 and 2011, AeroFarms sold four farm systems to different farmers (under strong NDA agreements). Located in the following markets, these partners are big advocates for our technology:
- Newark, NJ – school farm is part of St. Philip’s Academy EcoSpaces program offering hands-on learning and harvesting for school commissary.
- Seattle, WA – commercial farm operating under Farmbox Greens name is focused on micro greens for the restaurant trade.
- Chicago, Il – commercial farm operating under Farmed Here brand name growing leafy greens and herbs for major grocery stores and markets, including Whole Foods and Roundy’s stores.
- Jeddah, Saudi Arabia – demonstration farm for R&D for additional distribution license and research funding throughout Saudi Arabia.
In December 2011, AeroFarms came together with Just Greens, a start up formed by David Rosenberg and Marc Oshima focused on the sustainable vertical farming space. The new AeroFarms leadership team crafted a new management strategy with clear mission, vision, and values in order to create a truly sustainable business and organization.

David Rosenberg – Chief Executive Officer
Ed Harwood – Chief Technology Officer
Marc Oshima – Chief Marketing Officer

In 2012, we have a patent pending for our proprietary growing cloth that is reusable and environmentally friendly.
In 2012, we sold to The DeLeon Group, our Middle East Distributor, a demonstration farm to be located in Abu Dhabi, UAE.

Challenges & Solutions

KEY CHALLENGES

How do you enable communities of passion?
How do you experiment more often and more cheaply?
How do you rethink the philosophical foundations of management?
How do you encourage dissenters?
How do you develop holistic performance measures?

SOLUTIONS

Experienced Leadership

AeroFarms has assembled a leadership team with subject matter expertise, commitment, and alignment around delivering value to our planet, community, and shareholders. Our experience and successful track record allows us lead with a clear sense of purpose of helping people care about their food as passionately as we do.

David Rosenberg, Chief Executive Officer and Co-Founder, is the former CEO of The McDonough Group, which builds businesses seeking to transform the world of human enterprise through leadership in design, innovation and collaboration. David is also the founder and current Chairman of Hycrete, Inc., a leading nanotechnology firm in the construction business, where he raised Series A, B, and C financing and public financing. Hycrete was the first ever Cradle-to-Cradle certified product helping pioneer what has become the movement for sustainability and social responsibility. A recognized leader in cleantech and innovation, David has won numerous awards including the following:

2010 and 2008 Technology Pioneer + Young Global Leader – World Economic Forum
2008 Time Magazine – Top 4 Enterprise for Leading Edge of the New Energy Frontier
2010 Finalist for Ernst & Young Entrepreneur of the Year Award for NJ
2009 Best New Jersey CleanTech Company of the Year awarded by NJ Tech Counsel

A member of the Young Presidents Organization and World Economic Forum where he co-chairs their taskforce on Sustainability and New Business Models, David is also active on several for-profit and non-profit boards including Wermuth Asset Management Cleantech Fund, Ecological Sequestration Trust, and AgSquared. David has his B.A. from UNC Chapel Hill and M.B.A. from Columbia Business School.

Ed Harwood, Chief Technology Officer and Co-Founder, has over 30 years of agricultural and engineering experience. Ed founded AeroFarms in 2004 as GreatVeggies^® LLC before commercializing further in 2009 with cleantech investment from 21 Ventures and The Quercus Trust.

2011 World Technology Awards Finalist for the Environment
2011 Clean Equity Monaco Runner Up for Technology Research
2011 Red Herring Global Top 100 Finalist
2010 Red Herring Global Top 100 North America Winner

Ed is also a noted agricultural author with articles in leading trade publications like Planetizen, Renewable Energy World, Maximum Yield, Green Tech Media, and The Growing Edge. A former Associate Director of Cornell Cooperative Extension, Ed was responsible for identifying cutting-edge technologies. Ed also has senior management experience as the former CEO of Topline Waikato, Inc. a New Zealand milking equipment supplier. Ed has his B.S. in Microbiology and B.S. and M.S. in Animal Science from Colorado State University and Ph.D. in Dairy Science minoring in Artificial Intelligence from University of Wisconsin-Madison.

Marc Oshima, Chief Marketing Officer and Co-Founder, has an extensive marketing background in retail, brand management, and media with leading companies including Toys R Us, L’Oreal, and Turner Broadcasting. Marc also brings invaluable experience specifically from the food industry where he had headed up marketing for The Food Emporium, a leading NY metro grocery store chain and for Citarella gourmet markets which has been recognized as one of the Top 50 Specialty Food Retailers in the United States. Passionate about creating new businesses, Marc helped launch GameTap, the first on-demand broadband video game network and Beautyjungle.com, the first site authorized to sell both prestige and mass beauty products. An established leader in marketing, Marc has developed the following award-winning marketing campaigns:

AdWeek “Best Spots of the Year”, Creativity’s “Spot of the Week”, AICP “Advertising Excellence”, AdAge’s “Highest Brand Recall for the Year”
Webby “Award Winner”, Internet Advertising Competition Award for “Best Advertising – Integrated Ad Campaign”
M16 Video Game Industry “Best Integrated Marketing Campaign”, Toy Industry Association “Best Marketing Campaign”
American Academy of Dermatology “Gold Triangle Award”

Active in the community, Marc has been a member since 2004 of the Food Bank for NYC - Marketing Advisory Committee and since 1995 for Columbia Alumni Group. Marc has his B.A. from Columbia College and M.B.A. from Columbia Business School.

Clear Articulation of our Mission, Vision, and Values

Our mission and vision set our direction and how we will achieve our goals while our core values become the litmus test and filter for all of our actions. It is critical that everyone in the organization is clearly aligned and share our purpose for helping people care about their food as passionately as we do.

Our Mission

We are building trusted farms in markets everywhere, working to make the world better for generations by nourishing people with great tasting, safe and healthy leafy greens that are locally grown while using responsible, innovative methods that champion the environment and educate our community.

Our Vision

Our vision is to become the largest distributed local farming organization in the world in order to address our global food crisis. Leveraging science and innovation, we are cultivating a sustainable, for-profit business with positive impact on our food systems. Easily traced from farm to fork, our delicious, leafy greens are grown from organic seeds for the highest safety around. Through close partnership with our retail and food service customers, we will adapt our crop mix quickly to tailor what we grow to what our customers demand.

We are leading by example to create a respected brand committed to helping people care about their food as passionately as we do. Our local community commitment is as much about educating people to make the right food choices as it is about selling them produce. We are helping create awareness in consumers as to where food comes from, how it is created, and its greater effects on communities and the world. In partnership with local organizations like schools and food banks, we are donating every year a dedicated percentage of our harvest.

We are maximizing positive impact in the world and are working to integrate sustainability in every way possible. We always strive to create an engaging, caring, collaborative working environment with fair wages and benefits where both our people and plants will thrive.

Our Values

We fundamentally care about the health and well-being of our social, environmental and economic community, both locally and globally.
We actively question both conventional wisdom and our own assumptions and operate with an urgency to create innovative solutions and positive change.
We responsibly lead by example and hold ourselves to the highest standards of excellence and accountability.
We clearly communicate what we are doing and value open dialogue and education.
We proudly cherish our people, fostering a great team and collaborative spirit while respecting and empowering them as individuals to make the right decisions.

Strong, Meaningful Brand

In building our brand, we are focused on being a trusted resource for delivering the highest quality, safe, tasty leafy greens while championing the environment, our people, and our shareholders. However, building a brand today is no longer a one-way street of declaring to the consumer our key features and benefits. Rather it is a dialogue, and we are focused on cultivating a shared value that will reward our company, customer, and community. In turn, we will create a competitive barrier that will be hard to duplicate easily or authentically.

By identifying both rational and emotional drivers, we are focused on delighting our customer’s senses of sight, sound, touch, smell, and taste, creating a deeper bond that has returns beyond just economic ones.

Rational
- Calories
- Nutrition
- Great flavor
- Price
- Safe
- Convenience
Emotional
- Health and well-being
- Making good choices for myself and family
- Support of my community and local economy
- Making a difference
- Fundamental right
- Beneficial to the environment
- Great value

Brand Essence

Helping people care about their food. This is our mantra that clarifies everything that we do internally and externally, and it embodies several key concepts:

Help
- We are providing knowledge to make good decisions with respect to nutrition and diet
Care
- We are instilling an understanding and desire that they can make a difference in their own lives and their family’s lives.
Food
- We are showing what role leafy greens can play for their well-being and enjoyment.

Brand Tone

Today’s world is more transparent than ever, and it is vital that we clearly communicate who we are and do what we say in a truly authentic manner. Our tone is about being clear, informative, positive, and inspiring while being accessible.

Brand Name

Our AeroFarms name underscores our proven expertise and unique growing technology. It simplifies our value proposition for the retailer and in turn, our consumer. It also promotes our fundamental community promise to helping people care about their food as passionately as we do. Everyone should have access and information on how to make healthy choices and understand how to integrate healthy, safe, nutritious leafy greens in to their daily lives. Reinforcing our local commitment, the concept of Just Picked. Just Great Flavor.^TMsets a new standard for freshness and is the shorthand for our brand manifesto.

Culture

The power of our brand stems first from our team who all strive to personify our core values each and every day. Clear vision and purpose help us align our efforts and commitment to helping people care about their food as passionately as we do. We are fully vested in supporting, nurturing our team members so that our people will thrive as much as our leafy greens. We are offering fair wages and benefits and more importantly, the opportunity to make a difference. Our people are our biggest advocates, allowing us to recruit and retain top talent who are enthusiastically committed to our mission. As a result, we have an incredibly high-level of dedication that is equally inspiring to us and will help us disrupt this industry and create a new farming paradigm.

Value

Through our passion and purpose, we are offering a different proposition to our customers and broader community that is not easily commoditized. Our higher quality leafy greens with greater shelf lives allow our customers to enjoy our product fully with no food waste. More importantly, our commitment to the community is helping ignite a cause and sparking a bigger transformation of how we think about food and the ways that we grow it.

Benefits & Metrics

BENEFITS

We Positively Impact Issues Surrounding the Global Food Crisis

Global Population Growth
Increase of Urbanization Trend
Unhealthy Use of Pesticides
Food Safety Concerns (e.g., e-coli and salmonella)
Food Safety Concerns Due to Centralized Production
Supply Chain Complexity is Simplified and Disintermediated
Food Spoilage Through The Distribution Chain
Water Scarcity
Depleted Arable Land

How We Positively Impact the Environment and Society

KEY METRICS

Financial Targets

Revenue
COGS
SG&A
Net Margin

Environmental Targets

Water Reduction
No Pesticide Usage
No Food Safety Issues
Reduction in greenhouse gas emissions
- Electric Usage
- Product Transportation
- Waste Recycling

Social Targets

# of People Fed
Job Creation
$ Value of Donated Product
# of Schools that we work with
# of Food Banks that we work with

Lessons

LESSONS

Defining Sustainability

Going beyond organic, natural, or environmental, “sustainability” encompasses a wide variety of attributes that communicate quality to consumers including farming, production, processing and ingredients. To consumers “sustainability” has both symbolic associations (fresh, safe, local, healthy, clean) and objective associations (less processed, no chemicals, nothing artificial). The typical green shopper in the United States tends to have higher income and more formal education than average. However, interest in green and sustainable is demographically diverse, spread across income ranges, ages, educational levels, and household size.

To understand sustainability more closely, we have defined three core components – Health/Safety, Environmental, and Social/Locals to provide us with a common framework on how we should be looking at business issues:

Understanding What Local Means

Consumers are purchasing local produce based on the following attributes:[1]

77% - freshness
73% - support of local economy
63% - taste
35% - price

There is an official definition adopted by the U.S. Congress in the 2008 Food, Conservation, and Energy Act (2008 Farm Act) that stipulates the total distance that a product can be transported and still be considered a “locally or regionally produced agricultural food product” is less than 400 miles from its origin, or within the State in which it is produced. However, there is still a wide range of definitions that continue to be used.

Within 250 miles
Grown within a certain state
Less than X # of hours of travel

Given the premium on freshness and support of local economy, AeroFarms is focused on growing where the consumption is.

Developing Our Road Map

In assessing the industry and key competitors, we needed to develop a set of criteria of key attributes that we could weight to craft our strategy to identify needs and opportunities and understand the tradeoffs of optimizing, re-engineering, or simple redefining the solution.

Farming Method (Conventional, Organic, Hydroponics, etc)
Distance Traveled
Flavor
Freshness
Healthy/Safety
Environmental Impact
Support of Local Economy

By growing indoors with sun or soil, AeroFarms is redefining farming and setting a new standard for “Totally Protected Agriculture.”

Inspiring The Community

Linked with our mission of excellent products, profitability, and environmental stewardship is social good. AeroFarms wants to inspire our community to help people care about their food as passionately as we do. Our local farms support and champion the local community and economy in several ways.

Education

In order to help teach students about science, business, and nutrition, we have developed an in-school curriculum for use in Newark, NJ at the St. Philip’s Academy. Since 2010, we have an actual AeroFarms growing system within their science classroom that allows for hands-on learning and exposure to new flavors and leafy greens. Additionally, any harvested leafy greens are used enthusiastically within their school commissary deepening even further their connection to the leafy greens. We will also collaborate with school systems to coordinate regular farm visits for first-hand learning about farming and leafy greens. We already have an established internship program for college-level and will explore developing something similar for high-school level.

Donating Produce for Schools and Food Banks

We have built in to our business model the ability to donate annually to local schools. By partnering with schools through donated product and educational programs, we can help fight urban childhood obesity, allowing students to identify with healthy produce in new ways. In order to have an even bigger impact, we will look to tie in to broader national campaigns like the White House’s “Let’s Move”, “Salad Bars in Schools”, and “Healthy Kids”. We will also work closely with local food banks by donating leafy greens in order to help them in their efforts to serve nutritious, balanced meals.

Job Creation

Each local farm will provide 20-30 jobs for each farm. These jobs will be for both skilled and unskilled labor including growers, workers, managers, customer associates, and drivers to deliver the best possible customer experience. Additionally, we will be building out further our management team with the goal of overseeing our corporate farms and additional future joint venture farms.

Revitalization

Remediation of brownfields is one of the most visible ways to show economic progress. With support from the economic development organizations, we can help rejuvenate an area by attracting other developers, innovators, and investors to continue the progress. In turn, the different markets will be recognized as leaders in sustainability and innovation.

Local Partnerships for R&D

Building on our work already with universities, we see opportunities to lead science and innovation by partnering with local schools and institutions.

Living By Metrics

You have to establish benchmarks in order to assess performance over time, and we wanted to make sure that we analyze performance across not only financial measures but also environmental and social ones as well. While the financial measures are more clear, we spent a lot of time assessing different environmental and social considerations drawing from new programs like B Corporation and our direct experience with established programs like Bill McDonough’s Cradle-to-Cradle Product Certification that is built on the simple idea of “In order to do better, you have to know better.” At the end of the day, we have adopted a scorecard specific to our industry and our business.

Beginning with a revolutionary approach to growing, AeroFarms addressed first the conservation of water and soil. Our benchmark was no additional water (90% achieved) and no soil (achieved). In 2009, a shift to LED lights was made to lower the energy consumption of the artificial lighting. Our research first determined how to maintain quality and yield. Additional work with LEDs has halved the energy consumption of the original design – making great progress toward a benchmark of 75% reduced energy for the system.

Inherent in the design of totally controlled aeroponics is the ability to be very local, e.g., inside the restaurant, next door to the retailer, and certainly in the same city. Repurposing buildings, hiring local workers and training them in new skills, and providing a source of better nutrition all add to the sustainable fabric of a community.

[1] Consumer Trends in the Produce Category PMA and The Hartman Group, Spring 2009.

Credits

Bill McDonough for providing us with the vision of what it means to develop an organization that is good for society, the environment, and our shareholders and ongoing advice.

David Gelbaum and David Anthony for their commitment to cleantech and fundamental belief in AeroFarms and how we change the world of agriculture.

Ron Hart for his business acumen and rigorous science background to challenge our assumptions and ground even further our findings.

Dickson Despommier for helping champion vertical farming and being a supporter of our work.

Mitchell Davis for reminding us and helping elevate the important role of Taste that drives how we grow and what we grow in order to provide safe, nutritious and delicious leafy greens.

Our key farming partners who have helped validate and build the market globally for locally produced leafy greens using our technology - DeLeon Group, Farmed Here, Farmbox Greens, and EcoVeggies.

St. Phillip’s Academy for inspiring their students with their EcoSPACES program that provides hand-on learning and education about agriculture using our growing systems and for creating new fans of our tasty, delicious leafy greens that they have grown themselves.

For our academic partners who have helped guide and build our science-based approach - Dr. Lou Albright, Dr. Neil Mattson, and Jean Paul Freyssinier Nova M.S.

For our early contributors and advocates who have contributed to our business in countless ways – Harry Hartman, Travis Martin, Jessica Bloomgarden, Pete Wells, Tim McCarthy, Dave Cross, Ross Weissman, Alex Rudnicki, Julia Vahidova, Daniel Ritter, Bas Nabulsi, and David Broderick.

A special thanks to all of these key partners and believers in AeroFarms and helping people care about their food as passionately as we do.

Materials

AeroFarms Presentation

Documents