The case for indoor ag

Urban agriculture covers a multitude of concerns and interests. It spans everything from a focus on indoor high tech automation (systems, components etc.) to precision farming (the use of technology to drive the more precise use of inputs and the use of data to drive planning) to community activism (the provision of locally-sourced and grown food, under the control of local communities, able to tap into the more accessible ways to grow food).  

Fertile Ground

In October, Larta, under its Global Ag Innovation Network (GAIN) forum offering, brought together a diverse crowd in Los Angeles to learn, discuss and network around the topic of “LA Urban Farming.” The group included businesses, not for profit organizations, and interested members of the otherwise unaffiliated public. We explored the breadth of urban agriculture; we identified trends, we pointed to specific local and global impact, we looked at examples of specific technologies and innovators in the field. We met, we ate, we drank, we networked at the urban agriculture space of a pioneering local company, Local Roots.

We also featured a panel of indoor agriculture experts to lead off the discussion. Following the panel, we opened it up to members of the community involved in agriculture, both indoor and otherwise. This “open mic” session was intended to connect them to the local community and to enable advocacy on behalf of their mission and goals. As is our trademark, Larta is at the center of creating community among ag innovators, advocacy groups and investors.

The panel was led by:

  • Entrepreneur, Eric Ellestad, Founder and CEO Local Roots
  • Automation technology provider, Kelley Nicholson, Autogrow US Sales Lead
  • Investor, Nicola Kerslake, founder of Newbean Capital and Indoor Ag-Con

A sustainable business plan is at the top of the food chain

To date, indoor agriculture, in its initial stages, has focused on growing a variety of leafy vegetables including lettuce, herbs, root vegetables like carrots and tomatoes; all crops where the ratio of edible mass to general biomass is high, profit margins are high and quality of flavor and texture are critical to the modern consumer. Heads up: strawberry crops were identified by the panel as the next possible crop to go indoors.

Growers perennially ask the question: what can and should be grown indoors? As with any new innovation, the answer begins with simple economics. Growers are obliged to determine where growers can grow indoors at a cost parity with outdoor growers, or at a higher margin. It’s an organic leap, so to speak, for growers to then identify which outdoor crops don’t store well over a period of time, and use this analysis to determine how much they can earn and retain by growing fragile crops in close proximity to consumers.

Benefits indoor agriculture provides

Indoor agriculture certainly has its benefits for the environment. The inputs are more efficiently managed than their outdoor competitors– meaning water, nutrients, and pesticides.

For consumers in developed economies, the ability to control climate indoors may result in high quality produce with longer shelf lives, and offering a more diverse flavor profile. Precisely controlled environments offer new opportunities to nurture varieties of specific crops in smaller areas to meet local demand without the obvious higher carbon footprint involved in long-distance shipping to consumer centers associated with traditional agriculture.

In addition, crops can be cultivated independent of seasons, and food can be more readily traced “from farm to fork”, an imperative that has gained currency in recent years. For consumers in poorer countries, indoor agriculture can offer nutritious fresh produce where little is currently available.

Progress forward = job creation

In addition to providing diverse options for the diets of local citizens, indoor agriculture has the potential to provide higher skilled jobs and economic opportunities where none exist today. Increasing consumer demands for a varied food experience has led to the disruption of traditional distribution channels and complementary opportunities for creative innovation and for the rise of entrepreneurial firms.

Indoor ag’s drivers

A number of changes involving where people live and what they eat around the world are driving the strong growth of indoor agriculture:

  • 70% of the global population is expected to be urban by 2050
  • Consumer shopping preferences are shifting from grocery stories to smaller and more local growers
  • Consumer diets are incorporating more fresh produce
  • Consumers are demanding “responsibly grown” food whose origins can be traced back to the source
  • Consumers are putting higher value on the experience and variety of flavors in their diets, favoring higher value varieties over mass produced uniform varieties.

What will make expansion possible

  • Active co-investment of capital and policy changes from governments for land use regulation and tax incentives
  • Biology still matters, so human talent needs to be mined and trained, more specifically in plant biology and technology.
  • Further reduction in cost as technology developments evolve to drive greater performance at a lower cost.
  • Customer demand could help drive integration in the supply and service chain, between fresh local green growers to restaurants, meal package providers and high-end produce departments of grocery stores. Many of these developments are already with us.

About GAIN

Larta Institute’s Global Ag Innovation Network (GAIN) is a national leadership forum series bringing together agriculture industry professionals to help spur new investments in cutting-edge agricultural technology. Quarterly GAIN forums draw a diverse cross-section of the ag industry, including professionals at the C-suite and senior management levels, innovators, investors, researchers, industry, academia, and government agency representatives, foundations, professional services providers and other stakeholders.

About Claire Kinlaw

Claire Kinlaw is the Director for Larta’s agriculture practice. She holds a PhD in biochemistry from Rice University where she studied transcription protein complexes and an MBA from UC Berkeley Haas School of Business where she focused on entrepreneurship.

As a plant scientist Claire led applied science projects for 20 years for the USDA where she co-developed a genomic science program for forest trees. Her career with the USDA culminated with her directing the Institute of Forest Genetics. Claire co-developed and led a boutique consulting practice where her focus was on developing programs for economic development clients and advised early stage life science companies and small businesses on customer focus, product development, and growth. A return to graduate school for an MBA was followed by her joining an early stage agriculture company, Terviva, that domesticated and commercialized a new oil seed tree.