One-time largest vertical farm shuts down

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At one point FarmedHere was the nation’s largest vertical farm. It was also the first to be certified organic by USDA. Now it’s closing. What does that mean for the industry? Thoughts from Rosemont and FarmedHere founder inside.

farmedhere

This isn’t the first of the capital intensive vertical farms we’ve seen close. Mirai, Panasonic, and Google have all abandoned vertical farming projects. Does that mean that the money just isn’t there to do these things commercially at a large scale? Basically, what the owners of FarmedHere said is that they weren’t making enough money and could leverage their investments better in other sectors. Reading between the lines, profits stank. Is that true with all of these larger commercial farms?

Honestly, maybe…

Hard core narrow viewed industry advocates will of course have explanations and excuses, but that really could be the case.

At the same time, we’ve seen small-scale vertical farms with tons of success. Just guessing the reason based on our farm, their margins are probably higher since they don’t have to worry about moving as much product.

So, is the answer that without government or other outside assistance (like Sky Greens in Singapore, which is still expanding), it’s up to smaller farmers with better sales channels to develop the technology before vertical farming really becomes scalable?

I don’t think that’s a bad idea, and is what I’m trying to be a part of with Rosemont.

But it’s certainly not the only idea. There are still big vertical farms that look to be doing well. It’s just a matter of adapting and continuing to learn – and this can happen at the same time with both highly funded ventures and smaller models.

Aerofarms is kind of positioned to be tested next (though Gotham Greens  and Green Sense are still chugging along with less of a buzz too) and we’ll have to see what they can do.

Image result for paul hardej farmedhere

Hardej on Aljazeera

Here what one of the founders of FarmedHere had to say in an open letter to AVF members:

Austin, TX
1/17/2017
Open Letter

Dear Vertical Farming Colleagues:

It’s not unusual that the first movers and shakers in a new industry come across unexpected challenges.  As we all recently learned, FarmedHere is closing its vertical farming operations in Chicago.  I had the honor of co-founding FarmedHere in 2009, when it was unheard of for commercial farming to be located in city centers.  When we started FarmedHere there were no regulations, financing, qualified labor force, nor proven business model for vertical farming.  All we had was the promise of technology for growing plants under artificial light. By 2010 we had our first city farm up and running as an ultra-local grow operation, harvesting greens one day before store delivery and farm-to-store direct distribution. It was truly a disruptive model to the traditional food distribution and farming industry.

Despite these challenges, we forged ahead and made great progress.  For example, we went through many months of public hearings and complex legal processes to obtain government approval on the city, county, state, and federal levels.  In addition, we obtained the first vertical farm USDA organic certification.  Ultimately, we scaled our sales of several lines of leafy greens to about 100 grocery stores in the Chicago metropolitan market.  In early 2015 due to a misalignment with some of the new FarmedHere investors on the future of FarmedHere, I moved to other ventures but remained optimistic for continued FarmedHere success.

Since vertical farming is a rather unique blend between highly efficient manufacturing and technological farming, its success depends on the following: strong and smart capital, innovative sales and marketing, and a solid management team, working creatively with stakeholders from the local government, growers, technology providers, and customers. While the vertical hydroponic grow technology was proven to work at scale, FarmedHere missed on the business-side, with some of the other necessary ingredients to expand on its initial success.

In 2017 there are many examples of profitable vertical farms across the country and abroad.  As demand for local and organic food grows, so will the industry.  There are numerous reasons vertical farming is in demand – food safety and transparency, consistency, availability, high quality, nutritional value, not to mention a push towards sustainability.  But it’s going to take all of us working together and exchanging ideas and sharing experiences.  Like the industry, I’m evolving to keep up with innovation and technology.  I am very positive about the future and looking forward to working with all of you.

I would like to thank all the creative builders, architects, growers, angel investors and organic grocery stores who made it possible for FarmedHere to impact the food system with a positive and permanent change. Let’s all remember FarmedHere for what it achieved and how it paved the way for many successful vertical farms all around the World.

Keep on growing,

Paul Hardej
As: Co-Founder of FarmedHere, LLC

15 thoughts on “One-time largest vertical farm shuts down

  1. When you look at the photo at the top you can see one of the many reasons it failed. Any project that uses scissor lifts really hasnt thought things through and is destined to fail.

    • Hey Peter – would you be interested in expanding on that some for future readers? Feel free to reply to this comment, but would definitely like to hear your rationale. Thanks!

      • I think he was implying that manual labour carried out via scissor lifts is very inefficient, which is true. They created a large bottleneck by not scaling their logistics with their size.

        FarmedHere destroyed themselves by thinking volume instead of efficiency. By implying that they really haven’t thought things through simply means that automation and less labour intensive work is really the first building block of any vertical farm which they should have known.

      • I am from the construction industry so I know how dangerous scissor lifts can be, so dangerous most sites demand at least one person on the ground to act as rescue if something goes wrong. Between 92-99 55 died.

        The other reason scissor lifts are a bad design is that they are slow. The company is paying the time for the unit to trundle to its location then you have some one leaning out and across to access the plants, or even worse to lift the plants in & out of the scissor lift. Terrible ergonomics and murder on the back. Just lining up law suits further down the line.

        Then if you have multiple lifts you have the traffic jam at the processing area and of course the clear space needed not only to travel in a straight line but also for turning, all wasted growing space with expensive conditioned air.

        Move the plants not the people, cheaper, safer and less contamination.

  2. Pingback: Why Vertical Farms Fail | The Urban Vertical Farming Project

  3. You state that “Mirai, Panasonic, and Google have all abandoned vertical farming projects”, but your links lead to apparent success stories about those entities. Can you please give us some hard information about what happened at Mirai and Panasonic? There’s plenty of information on the web about what Google was doing and why they quit, but not these other two.

    With Aloha, Tim………

    • Tim – thanks for asking. I included those links to earlier posts on this blog to refresh people’s memory of what farms I was talking about. I don’t have any specifics but from what I’ve gathered from various people who have knowledge of their financials, their models were propped up/heavily subsidized to the point that they were over-engineered and unable to actually compete. I believe that they still operate in different forms but a lot of mixed information is coming out about them.

  4. Why bother with scissor lifts when instead you could employ a vertical farm system that revolves? Pulleys, chains etc that just has grow levels that rotates to different height levels, no? At THAT point harvesters would just do all their work on the ground.

    • I believe in taking the work to the people not people going into growing area, it saves labour time, is easier to equip and run the process area, and does away with many walk ways, which can be a 1/3rd of the floor space, and that is just in 2 dimensional plants. Obviously with CEA/VF you can go skywards but you MUST access even if only for maintenance & of course cleaning. Very difficult to do deep cleaning on the 12th level 20ft up in the air.

      • You’re right about the facilities going to different regions – it’s actually required, as it’s one of the biggest deciders of food prices.

        As for the access to clean, we circumvent this by engineering the growing warehouse itself into a clean room, usually ISO 4 (room air is ISO 9). Virtually no pathogens, bacterias, or any other dust particles are present which requires very minimal cleaning.

      • Oh and if you don’t turn your growing facility into a clean room, your operating costs will skyrocket from the additional labor to clean, maintain, and create means of access for these things as well, which appears to have happened at FarmedHere.

      • In reply to all these comments. First: download this free PowerPoint: (https://www.friendlyaquaponics.com/docs/AquaponicFailures2017.pptx ), and check out #6; Alterrus and Local Garden Vancouver. We show this slideshow on day 3 of our 5-day “Commercial Aquaponics and Greenhouse Training”; usually by then the class is educated enough to see all the bad decisions these 8 aquaponics failures made that led to failure ($100,000 up to $22 million invested).

        This is important because, although we teach how to do it right and make a profit in this course, someone is always trying to “change things a bit”, even before they know anything about aquaponics. We think it’s important to show the students all the “great ideas” that others have had, and have failed miserably with, so they don’t go down that same road. We’ve had our “failures”, too, but they’re failures where the student added components and practices from other aquaponics technologies to our systems, without understanding the consequences, and ended up with a poorly-performing mess as a result. We actually warn against doing this in our manual, and commend the student for their willingness to sacrifice their system to advance aquaponics knowledge. But you know, people are gonna do what they’re gonna do, good advice aside.

        Alterrus was a $4 million failed aquaponic boondoggle using a “rotating vertical aquaponics system”. How could it fail? Well, bad design, poor execution, too expensive, too much labor required, low production to expense ratio, and (dare I say it?) SCISSORS LIFTS!

        One of the commenters here said: “Pulleys, chains etc that just has grow levels that rotates to different height levels, no?”.

        Sure, that would work. But that’s like saying: “let’s get a jet engine, put some wings and wheels and controls on it, and we’ll have an airplane”. The science of aeronautical engineering is a LOT more than that.

        And comments like these are simply fantasies until some hard-headed engineer or mechanic builds a system that actually WORKS. It’s not the idea that changes the world, it’s the successful execution of the idea. So, idea man: get cracking out in the workshop!

        With Warm Aloha, Tim………….

      • Commercial aquaponics has always seemed like an oxymoron to me – at least large scale commercial aquaponics.

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