The Future of Farming: #ZeroHunger Mr. David
Description: The Future of Farming: ZeroHunger Mr. David Rosenberg, CEO; Mr. Ed Hardwood: Chief Science Officer; Mr. Marc Oshima, Chief Marketing Officer January 2020 Newark, New Jersey, United States of America Haskayne Consulting: Adam Schwarz,
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slide1. The Future of Farming: #ZeroHunger Mr. David Rosenberg, CEO; Mr. Ed Hardwood: Chief Science Officer; Mr. Marc Oshima, Chief Marketing Officer
January 2020
Newark, New Jersey, United States of America
Haskayne Consulting: Adam Schwarz, Mahwash Waqar, Gibson Yin, Graham Toombs<br>
slide2. How does AeroFarms grow it’s profitability amidst a business model requiring excessively high capital and operational expenses? AeroFarms biggest challenges to profitability are it’s high financial requirements. 2 AeroFarms must adjust it’s current business model to grow it’s profitability.<br>
slide3. Executive Summary 3<br>
slide4. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 4 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide5. “We are at a major inflection point globally as we think about the challenges of increasing population and urbanization, loss of fresh water and arable land, worker welfare, food safety, and food security, and AeroFarms is uniquely positioned to address each of these areas with proprietary growing technology and unmatched growing history and expertise.” - Mr. David Rosenberg, CEO 5 AeroFarms is leading the way to #ZeroHunger through it’s revolutionary farming practices.<br>
slide6. The Path to The Future of Farming 6 Focusing on these areas will allow AeroFarms to decrease its operational expenses and grow long-term<br>
slide7. “390x more efficient” – Marc Oshima Mahwash Waqar 7<br>
slide8. The Aeroponics Industry 8 Feeding the world through environment-friendly business models<br>
slide9. Challenges 9 Similar struggles across the board – explore the way forward for farming 4.0<br>
slide10. AeroFarms 10 Fix the home base first before pursuing global expansion<br>
slide11. The Customer 11 Finding a way to attract and retain the customer and consumer through new partnerships, education and engagement<br>
slide12. AeroFarms: Critical Look 12<br>
slide13. Alternatives 13 Adjust the business model for sustainability<br>
slide14. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 14 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide15. Recommendation 15 Steps to perfect the US market<br>
slide16. The Farm of the Future Gibson Yin 16<br>
slide17. AquaFarms Financials Today $50 million in revenue
Operating 7 plants globally
Positive profit 2019
Operated with positive cashflow
Challenges
Growing revenue
High operating expense
Maintain strong financial footing 17<br>
slide18. Cost Assumptions One Time
Develop waste heat technology – 200k
R&D in LED spectrum efficiency – 500k
New product offering – 200k
R&D for new plant varieties – 500k
Search for franchise partner – 200k 18<br>
slide19. Cost Assumptions Recurring
Hire grant specialist – 100k/yr
Partner w/ SPUD – 200k/yr
Pop-up Shop – 300k/yr
Maintain industry group – 10k/yr
Lobbying effort – 200k/yr
Talent search – 500k over 2 years
University grant - $100k/yr 19<br>
slide20. Target by 2022 Grow revenue by 30% CAGR (24% expected growth, CAGR)
Achieve operating margin of 25%
Reduce heat usage by 5%
Receive grant funding of $5 million/yr
Find 3 franchise partners in 2 years and begin construction 20 Achieve growth in topline and bottom line<br>
slide21. Avoid…Expansion into Hydro & Aquaponics Aquaponics
Expensive to build and maintain due to involvement of fishes
Bottom feeder fishes are difficult to sell
Hydroponics
Heavy load from hydroponic systems
Building needs to be redesigned
Different location selection process 21 Incompatible technology with little benefits to AeroFarm STOP<br>
slide22. Avoid…Expand Into Traditional Farming No competitive advantage
Will eat heavily into cashflow
No experience in traditional farming
Don’t cave into outside pressure to “feed the world”
Achieve your vision at your own pace 22 Achieve your vision at your own pace STOP<br>
slide23. Seeding The New AquaFarm Graham Toombs 23<br>
slide24. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 24 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide25. R&D Short Term (0-6 Months):
R&D department to begin hiring for new roles (spectrum efficiency and new fruits)
Prelim research into integrating waste heat recovery into new locations
Research into anticipated LED spectrum efficiencies
Medium Term (6-12 Months):
New R&D roles to implement found spectrum efficiencies as they become applicable
Begin trials of new berries and fruit aeroponics
Integrate waste heat recovery into locations where applicable
Long Term (1-2 Years):
Run existing data analytics programs on the new berries and fruits
Continue refinement of flavors and textures according to data standards
Source new locations based on waste heat recovery research 25 Find new products, and new avenues<br>
slide26. Franchise BM Short Term (0-6 Months):
Begin sourcing potential new franchisees
Continue current management model for currently held locations
Medium Term (6-12 Months):
Work with potential franchisees on sourcing locations (emphasizing waste heat)
Provide help with loan sourcing
Long Term (1-2 Years):
At the end of 2 years, franchisees begin operation 26 The new model helps save cost, and builds revenue<br>
slide27. Talent Generation Short Term (0-6 Months):
HR to hire a local recruiting firm near each current location
Specific directions given on employees needed and talents wanted
Search entire current industry
Head office to begin talks with other vertical farming companies to organize the industry
Head office to begin talks with Oregon State University (OSU)
Medium Term (6-12 Months):
Qualified staff found by recruitment firm
Head office to continue talk with other vertical farms, building the blocks to organize
Long Term (1-2 Years):
Vertical Farming Growers association formed, begins lobbying for organic labelling
OSU Partnerships, sponsors new programs and builds future talent long term 27 Fix the industry and grow the pool<br>
slide28. Marketing and Education 28 Interact with your consumers and build up their knowledge<br>
slide29. Risks and Mitigation 29<br>
slide30. Suggestions for the future (NOT Right now) Build an observation area into the current vertical farms
Partnering with large E-Commerce entities
Grain farm R&D 30 Suggestions for future expansions<br>
slide31. You Asked, We Answered Can aeroponics and data science-based vertical farming the future of crop cultivation?
Can a sustainable and profitable business model be created?
How to combat capital and energy requirement?
Can the consumer interest be molded into vertical farming based crops?
Can it meaningfully solve the world’s food problem without high calorie proteins and grains?
How to make vertical farms the future? 31 We believe this solution is the future of farming and food generation<br>
slide32. Nourishing the Communities of Tomorrow Adam Schwarz 32<br>
slide33. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 33 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide34. Executive Summary 34<br>
January 2020
Newark, New Jersey, United States of America
Haskayne Consulting: Adam Schwarz, Mahwash Waqar, Gibson Yin, Graham Toombs<br>
slide2. How does AeroFarms grow it’s profitability amidst a business model requiring excessively high capital and operational expenses? AeroFarms biggest challenges to profitability are it’s high financial requirements. 2 AeroFarms must adjust it’s current business model to grow it’s profitability.<br>
slide3. Executive Summary 3<br>
slide4. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 4 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide5. “We are at a major inflection point globally as we think about the challenges of increasing population and urbanization, loss of fresh water and arable land, worker welfare, food safety, and food security, and AeroFarms is uniquely positioned to address each of these areas with proprietary growing technology and unmatched growing history and expertise.” - Mr. David Rosenberg, CEO 5 AeroFarms is leading the way to #ZeroHunger through it’s revolutionary farming practices.<br>
slide6. The Path to The Future of Farming 6 Focusing on these areas will allow AeroFarms to decrease its operational expenses and grow long-term<br>
slide7. “390x more efficient” – Marc Oshima Mahwash Waqar 7<br>
slide8. The Aeroponics Industry 8 Feeding the world through environment-friendly business models<br>
slide9. Challenges 9 Similar struggles across the board – explore the way forward for farming 4.0<br>
slide10. AeroFarms 10 Fix the home base first before pursuing global expansion<br>
slide11. The Customer 11 Finding a way to attract and retain the customer and consumer through new partnerships, education and engagement<br>
slide12. AeroFarms: Critical Look 12<br>
slide13. Alternatives 13 Adjust the business model for sustainability<br>
slide14. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 14 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide15. Recommendation 15 Steps to perfect the US market<br>
slide16. The Farm of the Future Gibson Yin 16<br>
slide17. AquaFarms Financials Today $50 million in revenue
Operating 7 plants globally
Positive profit 2019
Operated with positive cashflow
Challenges
Growing revenue
High operating expense
Maintain strong financial footing 17<br>
slide18. Cost Assumptions One Time
Develop waste heat technology – 200k
R&D in LED spectrum efficiency – 500k
New product offering – 200k
R&D for new plant varieties – 500k
Search for franchise partner – 200k 18<br>
slide19. Cost Assumptions Recurring
Hire grant specialist – 100k/yr
Partner w/ SPUD – 200k/yr
Pop-up Shop – 300k/yr
Maintain industry group – 10k/yr
Lobbying effort – 200k/yr
Talent search – 500k over 2 years
University grant - $100k/yr 19<br>
slide20. Target by 2022 Grow revenue by 30% CAGR (24% expected growth, CAGR)
Achieve operating margin of 25%
Reduce heat usage by 5%
Receive grant funding of $5 million/yr
Find 3 franchise partners in 2 years and begin construction 20 Achieve growth in topline and bottom line<br>
slide21. Avoid…Expansion into Hydro & Aquaponics Aquaponics
Expensive to build and maintain due to involvement of fishes
Bottom feeder fishes are difficult to sell
Hydroponics
Heavy load from hydroponic systems
Building needs to be redesigned
Different location selection process 21 Incompatible technology with little benefits to AeroFarm STOP<br>
slide22. Avoid…Expand Into Traditional Farming No competitive advantage
Will eat heavily into cashflow
No experience in traditional farming
Don’t cave into outside pressure to “feed the world”
Achieve your vision at your own pace 22 Achieve your vision at your own pace STOP<br>
slide23. Seeding The New AquaFarm Graham Toombs 23<br>
slide24. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 24 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide25. R&D Short Term (0-6 Months):
R&D department to begin hiring for new roles (spectrum efficiency and new fruits)
Prelim research into integrating waste heat recovery into new locations
Research into anticipated LED spectrum efficiencies
Medium Term (6-12 Months):
New R&D roles to implement found spectrum efficiencies as they become applicable
Begin trials of new berries and fruit aeroponics
Integrate waste heat recovery into locations where applicable
Long Term (1-2 Years):
Run existing data analytics programs on the new berries and fruits
Continue refinement of flavors and textures according to data standards
Source new locations based on waste heat recovery research 25 Find new products, and new avenues<br>
slide26. Franchise BM Short Term (0-6 Months):
Begin sourcing potential new franchisees
Continue current management model for currently held locations
Medium Term (6-12 Months):
Work with potential franchisees on sourcing locations (emphasizing waste heat)
Provide help with loan sourcing
Long Term (1-2 Years):
At the end of 2 years, franchisees begin operation 26 The new model helps save cost, and builds revenue<br>
slide27. Talent Generation Short Term (0-6 Months):
HR to hire a local recruiting firm near each current location
Specific directions given on employees needed and talents wanted
Search entire current industry
Head office to begin talks with other vertical farming companies to organize the industry
Head office to begin talks with Oregon State University (OSU)
Medium Term (6-12 Months):
Qualified staff found by recruitment firm
Head office to continue talk with other vertical farms, building the blocks to organize
Long Term (1-2 Years):
Vertical Farming Growers association formed, begins lobbying for organic labelling
OSU Partnerships, sponsors new programs and builds future talent long term 27 Fix the industry and grow the pool<br>
slide28. Marketing and Education 28 Interact with your consumers and build up their knowledge<br>
slide29. Risks and Mitigation 29<br>
slide30. Suggestions for the future (NOT Right now) Build an observation area into the current vertical farms
Partnering with large E-Commerce entities
Grain farm R&D 30 Suggestions for future expansions<br>
slide31. You Asked, We Answered Can aeroponics and data science-based vertical farming the future of crop cultivation?
Can a sustainable and profitable business model be created?
How to combat capital and energy requirement?
Can the consumer interest be molded into vertical farming based crops?
Can it meaningfully solve the world’s food problem without high calorie proteins and grains?
How to make vertical farms the future? 31 We believe this solution is the future of farming and food generation<br>
slide32. Nourishing the Communities of Tomorrow Adam Schwarz 32<br>
slide33. AeroFarms needs to decrease it’s operational expenses through technological efficiencies and shifting its growth to a franchise model. Operational Expenses must be decreased in order for the business to remain profitable in the long run.
AeroFarms cannot continue to grow with such high capital expenditure requirements. 33 AeroFarm must adjust it’s business model for profitability and long-term growth<br>
slide34. Executive Summary 34<br>