AeroFarms The World Largest Vertical Farming
Description: AeroFarms The World Largest Vertical Farming Company presenting to: Ed Harwood David Rosenberg Marc Oshima presented by: Decio Soares Nahana Caetano Romilson Teles Tobias Walzberg Insper Sao Paulo - Brazil agenda 1 Introduction 2
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slide1. AeroFarms The World Largest Vertical Farming Company presenting to:
Ed Harwood
David Rosenberg
Marc Oshima presented by:
Decio Soares
Nahana Caetano
Romilson Teles
Tobias Walzberg Insper | Sao Paulo - Brazil<br>
slide2. agenda 1 | Introduction
2 | Analysis of the situation
3 | Assumptions
4 | Alternatives
5 | Recommendation
6 | Implementation
7 | Wrap-up<br>
slide3. 1 introduction<br>
slide4. agenda Could aeroponics and vertical farming be the future of crop cultivation, without cultivating high calories-based protein and grains? Business dilemmas Could it be a profitable and sustainable business model? How could it be less dependent of capital and more energy sufficient? 1 3 2 4 Could consumers be more interested in vertical farming products?<br>
slide5. AeroFarms The World Largest Vertical Farming Company The Company
Newark, NJ, USA
Founded in 2011
Farming 4.0
Mission: transform agriculture (environmentally responsible farms)
Revenue: US$ 50 million (2019)
Venture capital: US$ 238 million (until July 2019)
Capital intensive business Portfolio
Brand Dream Greens
Focused on leafy vegetables
Data on 250 crops
Possible future expansion to berries, peppers, cucumbers and fruits
No staple crops (grains or proteins)<br>
slide6. AeroFarms The World Largest Vertical Farming Company Business operations
280+ operation procedures
9 farms located globally (7 in the USA, 1 in Saudi Arabia, 1 in China)
130 employees (trained and qualified)
Vertical farming + patented cloth + led lights
Less use of fertilizers and no use of pesticides
Close to consumer markets (up to 15 miles)
Low transportation cost
Data analytics Short product-to-market cycle -95% water
10x +CO2<br>
slide7. 2 analysis of the situation<br>
slide8. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide9. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide10. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide11. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide12. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide13. competition Google’s Alphabet X
VertiCrop
FarmedHere abandoned shut down bankrupted Gotham Greens
Lufa Farms vertical farms hydroponic system<br>
slide14. 3 assumptions<br>
slide15. Focus on vertical farms aeroponics technology 25 farms by 2022 World population of 9 billion people by 2050 Decrease of arable land by 1/3 in 2050 (comparable to 1970) Less impact of climate change in aeroponics technology Use of data analytics (IoT & Machine Learning) INTERNAL EXTERNAL<br>
slide16. 4 alternatives<br>
slide17. Main challenges Issues to tackle<br>
slide18. Decision matrix Main questions going forward<br>
slide19. Decision matrix Main questions going forward<br>
slide20. 5 recommendation<br>
slide21. Recommendation Forward going strategy This strategy delivers:
Higher revenues in the short term
Optimized use of space in USA
Use of venture capital to further assist expansion
Additional revenue streams to core business model Focus on:
Locally optimizing portfolio and adding high value crops
Optimized production processes
Generate cash flow and revenues on the US market to reduce dependence on Venture Capital
Asia expansion through international Venture Capital (spin-off / separate company)
Development of new businesses: capitalize on proprietary technology<br>
slide22. 6 implementation<br>
slide23. Implementation plan Forward going strategy + costs netted costs efficiency gains + Capex efficiency gains<br>
slide24. Implementation plan Financial assumptions U.S.A
Low Capex (VC) availability
Funding based on increased revenues due to local portfolio optimization and product positioning
Location revision to minimize future Capex need
Process simplification and technology improvement to reduce costs
Additional revenue streams needed
Asia Pacific
Venture Capital availability
Expansion based on VC investment
Use of acquired knowledge in Saudi Arabia and China
Revenue increment through expansions and local portfolio optimization
New Businesses
Patent revision
Capitalizing on acquired experience and developed proprietary technology
Expansion through franchising – optimizing farm size and format<br>
slide25. 7 wrap-up<br>
slide26. wrap-up Future of crop cultivation? Profitable and sustainable? Energy sufficient? 1 3 2 4 Interested consumers?<br>
slide27. thank you
merci beaucoup
obrigado<br>
Ed Harwood
David Rosenberg
Marc Oshima presented by:
Decio Soares
Nahana Caetano
Romilson Teles
Tobias Walzberg Insper | Sao Paulo - Brazil<br>
slide2. agenda 1 | Introduction
2 | Analysis of the situation
3 | Assumptions
4 | Alternatives
5 | Recommendation
6 | Implementation
7 | Wrap-up<br>
slide3. 1 introduction<br>
slide4. agenda Could aeroponics and vertical farming be the future of crop cultivation, without cultivating high calories-based protein and grains? Business dilemmas Could it be a profitable and sustainable business model? How could it be less dependent of capital and more energy sufficient? 1 3 2 4 Could consumers be more interested in vertical farming products?<br>
slide5. AeroFarms The World Largest Vertical Farming Company The Company
Newark, NJ, USA
Founded in 2011
Farming 4.0
Mission: transform agriculture (environmentally responsible farms)
Revenue: US$ 50 million (2019)
Venture capital: US$ 238 million (until July 2019)
Capital intensive business Portfolio
Brand Dream Greens
Focused on leafy vegetables
Data on 250 crops
Possible future expansion to berries, peppers, cucumbers and fruits
No staple crops (grains or proteins)<br>
slide6. AeroFarms The World Largest Vertical Farming Company Business operations
280+ operation procedures
9 farms located globally (7 in the USA, 1 in Saudi Arabia, 1 in China)
130 employees (trained and qualified)
Vertical farming + patented cloth + led lights
Less use of fertilizers and no use of pesticides
Close to consumer markets (up to 15 miles)
Low transportation cost
Data analytics Short product-to-market cycle -95% water
10x +CO2<br>
slide7. 2 analysis of the situation<br>
slide8. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide9. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide10. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide11. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide12. 390 times more efficient (land use) than traditional farms
Reduced transportation costs
Patented technology
More pest control
No chemical fertilizers used
Closer to large consumers area
Sweeter and higher level of vitamins
Dell Inc. partnership (IoT)
No use of soil More carbon emission (high energy consumption)
New legislation to block international funding for startups
Trade war
Subsidies required for energy consumption
Difficulty to find qualified professional
Hydroponic system high growth High fixed costs per square meter
Only green salads and no high-calories grains
High carbon emission due to energy consumption (LED) New methods of food production
New legislation (D.C. Urban Farming and Food Security Act) encouraging urban farming S T O W<br>
slide13. competition Google’s Alphabet X
VertiCrop
FarmedHere abandoned shut down bankrupted Gotham Greens
Lufa Farms vertical farms hydroponic system<br>
slide14. 3 assumptions<br>
slide15. Focus on vertical farms aeroponics technology 25 farms by 2022 World population of 9 billion people by 2050 Decrease of arable land by 1/3 in 2050 (comparable to 1970) Less impact of climate change in aeroponics technology Use of data analytics (IoT & Machine Learning) INTERNAL EXTERNAL<br>
slide16. 4 alternatives<br>
slide17. Main challenges Issues to tackle<br>
slide18. Decision matrix Main questions going forward<br>
slide19. Decision matrix Main questions going forward<br>
slide20. 5 recommendation<br>
slide21. Recommendation Forward going strategy This strategy delivers:
Higher revenues in the short term
Optimized use of space in USA
Use of venture capital to further assist expansion
Additional revenue streams to core business model Focus on:
Locally optimizing portfolio and adding high value crops
Optimized production processes
Generate cash flow and revenues on the US market to reduce dependence on Venture Capital
Asia expansion through international Venture Capital (spin-off / separate company)
Development of new businesses: capitalize on proprietary technology<br>
slide22. 6 implementation<br>
slide23. Implementation plan Forward going strategy + costs netted costs efficiency gains + Capex efficiency gains<br>
slide24. Implementation plan Financial assumptions U.S.A
Low Capex (VC) availability
Funding based on increased revenues due to local portfolio optimization and product positioning
Location revision to minimize future Capex need
Process simplification and technology improvement to reduce costs
Additional revenue streams needed
Asia Pacific
Venture Capital availability
Expansion based on VC investment
Use of acquired knowledge in Saudi Arabia and China
Revenue increment through expansions and local portfolio optimization
New Businesses
Patent revision
Capitalizing on acquired experience and developed proprietary technology
Expansion through franchising – optimizing farm size and format<br>
slide25. 7 wrap-up<br>
slide26. wrap-up Future of crop cultivation? Profitable and sustainable? Energy sufficient? 1 3 2 4 Interested consumers?<br>
slide27. thank you
merci beaucoup
obrigado<br>