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Daily news and analysis about the food tech revolution

Ag Tech

John Deere’s Robotic Tractor is The Result of Years of Investment in AI-Powered Farming

When John Deere debuted its first-ever autonomous tractor at CES 2022, it signaled a new era of AI & robotic farming would soon be upon us. While other companies have been talking about autonomous tractors for some time, it’s an altogether different matter when the U.S.’s biggest manufacturer of farming equipment signals that this is the future.

Still in the trial phase, early versions of the 8R are now being tested by what the company describes as its “paying test cooperators.” But since it won’t be long before the final production model of the autonomous tractor is rolling off the production line, I thought it would be a good time to sit down with one of the company’s computer vision leads, Chris Padwick, the  Director of Computer Vision and Machine Learning at Deere’s Blue River Technology division, to get an idea of the how the company got to this point.

According to Padwick, since its acquisition by John Deere in 2017, Blue River has helped accelerate the farming equipment giant into precision agriculture with its “see and spray” computer vision technology. The technology, which enables a farmer to make highly targeted applications of herbicide to weeds in row crops, first debuted in John Deere’s See and Spray Select in 2021.

The system made it possible to perform green-on-brown application, which is the application of non-residual herbicide to crops in the “pre-emergence” phase. This use of precision application of herbicide allowed farmers to transition away from the blanket application of herbicide to crops using older technology such as cropdusters to more precise application that can reduce the amount of herbicide used by 77% or more.

But it wasn’t until the latest incarnation of the technology, which uses green-on-green technology, that the benefits of Blue River’s investment into deep learning-powered computer vision (which the company began researching in 2016) were fully realized. With the See and Spray Ultimate, farmers can do in-season herbicide spraying for various crops, which is powered by advanced neural network-powered computer vision that can differentiate between similarly colored weeds and crops.

“If plants are touching together, then all of your traditional computer vision techniques for image processing – like morphology and erosion dilation and template matching – kind of break down,” Padwick said. “It’s really not possible to build a system without these that can operate at 95 or above percent accuracy.”

While Blue River helped John Deere accelerate its move into AI-powered farming, Padwick pointed out that the farm equipment company had already invested significantly in the technology even before Blue River’s arrival. By 2019, the company was processing 5 to 15 million measurements per second and had even begun to use computer vision to evaluate grain quality. Much of that work, according to Padwick, was based on work John Deere had performed before Blue River had arrived.

And today, all of the combined competencies and data gathered across John Deere’s various AI efforts are helping the company create its first 8R autonomous tractor.

“In general, in all of our machine learning projects, we tried to embrace the idea that all data is good data,” Padwick said. “We might have sprayer data from See and Spray collected from cameras that can be useful to train the autonomous tractor. The autonomous tractor has different cameras, different geometry, and they can collect data with different kinds of modality and different sensors, but that data that’s collected from other projects can also be useful in that training.”

When asked if he thinks farmers will embrace autonomous tractors, Padwick believes the answer is yes. He points to the rapid acceptance of See and Spray as an illustration of how quickly farmers will adopt new technologies that help them do their job quicker and at a lower cost.

“I remember every time we would do a demo for customers of See and Spray where we’d invite several growers out to a field, and they can watch the machine in action and give us feedback on the results. The overwhelming sentiment was, ‘Wow, I knew this was coming, but I thought it was about ten years away. You guys are showing me the future today.’ So I think the customer sentiment has been fantastic and very hungry for the innovations.”

Padwick says that once early adopters start using innovations like the 8R autonomous tractor, word will spread among farmers, leading to more adoption.

“What I think is going to happen here is you’ll see some people are going to be really excited about the technology and adopting it, and then word of mouth in the coffee shops is going to spread,” Padwick said. “That’s how a lot of these products get sold, not by flashy marketing, presentations, or cool videos on YouTube; it’s coffee shop conversations. And if folks see that other farmers are starting to use the autonomous tractor and getting good value from it, that will naturally drive adoption. Because really, it’s a trust network.”

Are Deep Sea Fish Farms the Future of Aquaculture? Forever Oceans Thinks So

The growth of aquaculture has been one of the big stories in the fishing industry over the past couple of decades, as fish raised in farms has grown from about 20% of captured fish in the 1990s to half of all fish caught in by 2020, according to a report issued by the United Nations.

But fish farming, while lauded by many experts as a way to relieve stress on ever-declining wild fish populations, is seen as rife with problems by others. Critics say fish farms can expose local fish populations to parasites such as fish lice, as well as antibiotics, and other chemicals. They also say farms pollute waters with unnatural amounts of concentrated fish feces emitted from farm enclosures. Farmed fish also can escape enclosures, which can pose harm to wild fish populations through interbreeding, especially if the farmed fish are genetically modified.

But a new generation of fish farming startups believe that pushing aquaculture away from the shore and into the deep sea, aided by the use of advanced technology such as sensors, automation, and artificial intelligence, will alleviate many of the problems associated with near-shore fish farming and produce a cleaner, more abundant harvest that is desperately needed to feed a growing global population.

One such company is Forever Oceans which has developed a system for farming fish miles offshore in the open ocean. The company, a spinoff of Lockheed Martin, says it can place its fish enclosures 10 miles offshore, up to 6000 thousand feet deep, and allow them to essentially drift naturally in the ocean’s current using a “patented single-point mooring.”

Forever Oceans uses sensors and cameras to monitor water quality and fish behavior, and “AI-driven” management software can make precision adjustments to feeding amount and timing and control hazards such as algae blooms. Underwater images captured by the system’s cameras are processed by what the company describes as biomass software to determine when the fish are ready to harvest. The entire process, which the company says drastically reduces the amount of human interaction with the fish population, is managed hundreds of miles away in a central operations center where a “single employee can monitor and manage our entire global network of farms via their laptop or mobile phone.”

Forever Oceans and other startups in this space believe that pushing fish farms further offshore and deeper underwater allows the fish to live in a more natural environment. Deep ocean currents, they say, can wash away pollutants and naturally clean enclosures, which keeps disease to a minimum. Proponents also believe these systems are better than land-based systems because open ocean farms utilize deep ocean tides as a natural filtration system, resulting in less energy usage and better access to naturally provided nutrients.

While it’s too soon to tell if deep-sea fish farming grows to become a significant slice of the overall aquaculture market, it definitely has momentum. Ever since the first deep-sea aquaculture project launched off the shores of Norway in 2018, a number of startups like Forever Oceans, Mowi, Innovasea, and Blue Ocean Mariculture have started to work on systems to enable fish farming in the open ocean.

Perhaps not surprisingly, this new movement for pushing fish farms into the deep ocean is not without its critics. Last fall, a coalition of environmental groups filed a legal challenge to a permit for a facility off the coast of Florida owned by Ocean Era, a company that has deployed Forever Oceans technology. They claim the EPA issued the permit without adequately vetting the facility’s environmental impact.

For its part, Forever Oceans continues to push forward, building out farm systems across the globe. Last June, the company said it would farm 2,500 tonnes of fish to be harvested over the next 12 months from their Panamanian farm and would bring on more fish capacity from farm sites being developed in Indonesia and Brazil. And this week, the company announced its farm-raised Kanpachi, a popular sushi-grade ray-finned fish, is now on the menus of  75 restaurants across the U.S, including Charlie Palmer Steak in Napa and Michelin-star Gravitas in Washington D.C.

Japan Prime Minister Wants to Develop Cultivated Meat Industry To Help Create Sustainable Food Supply

Japanese Prime Minister Fumio Kishida announced plans to start developing Japan’s cellular agriculture industry with the aim of producing cultivated meat and fish, according to a story published today by the Japan news bureau, Nikkei.

“We will develop the environment to create a new market, such as efforts to ensure safety and the establishment of labeling rules, and foster a food tech business originating in Japan,” said Prime Minister Kishida as part of the announcement.

Nikkei reported that Kishida expanded on his plans at a House of Representatives Budget Committee on the same day, telling Nobuhiro Nakayama of the Liberal Democratic Party, “Foodtech, including cellular foods, is an important technology from the perspective of realizing a sustainable food supply. We have to support efforts that contribute to solving the world’s food problems.”

While Japan’s regulatory environment for the sale of cell-cultivated meat has been viewed by some as one that could create a fairly quick glide path as compared to other countries, there are still a few regulatory hurdles that need to be settled for cultivated meat to be sold to consumers. Last year the Japanese Health, Labor, and Welfare Ministry of Japan formed a team of experts to study the safety of cultivated meat and its associated production process. Almost a year later, the Japanese government is still defining what constitutes cultured meat as food and working to develop safety standards for raw materials and manufacturing processes.

Minister of Health, Labor and Welfare Katsunobu Kato said, “While paying close attention to the state of research and development, scientific findings on safety, and international trends, we will further consider what measures are necessary in terms of safety.”

Kishida’s focus on developing the cultivated meat industry is an encouraging sign for the numerous startups from the island nation that have been working on developing cultivated meat technology for the past few years. This includes Integriculture, which in 2021 announced the Culnet Consortium, an open innovation platform for the development of cell-cultured meat in Japan and beyond. Japan food conglomerate Ajinomoto is also eager to develop the market, having inked a deal last year with Israel-based cultivated meat startup Supermeat.

The support by Japan’s leading government officials also underscores a trend in which we’ve seen countries with low food sovereignty take a particular interest in new food technologies as a way to increase their self-dependence. Singapore and Israel have been similarly proactive, pushing for investment and accelerated regulatory pathways for sales of cultivated meat.

Here in the US. the path towards government approval of cultivated meat took a big step forward when UPSIDE Foods announced it has become the first company in the world to receive a “No Questions” letter from the U.S. Food and Drug Administration (FDA) for cultivated meat, poultry, or seafood. All eyes across the globe have been watching the U.S. government’s approval process closely and some believe we will see sales of cultivated meat to consumers sometime this year.

Vertical Farmer Oishii Doubles Down on Unique Japanese Varietals With the Introduction of the Koyo

Vertical farming startup Oishii has introduced another strawberry cultivar, The Koyo Berry, which will join the brand’s Omakase Berry offering introduced in 2018.

The Koyo Berry is a Japanese varietal grown outside Tokyo during winter. The berries will be grown first in Oishii’s east coast vertical farms, which use advanced robotics and traditional Japanese farming methods to produce the fruit. The Koyo Berry will be available through online grocer FreshDirect in New York, New Jersey, and Connecticut for $15 MSRP per tray. The product is expected to expand to other markets, including Los Angeles, later this year.

Oishii introduced its first strawberry, the Omakase Berry, in 2018. Oishii founder and CEO Hiroki Koga decided, when building out his vertical farm, to attempt to replicate the elements of a perfect day in Japan (e.g., humidity levels, light) inside a controlled-environment farm in the U.S. This allows the company to grow the Omakase – and now the Koyo – Berry 365 days per year.

The company operates three indoor vertical farms, two outside Manhattan and one in Los Angeles. Oishii recently opened Mugen Farm, a 74,000-square-foot facility that relies on advanced robotics combined with traditional Japanese farming methods. The company claims its newest farm uses 60% less energy and 40% less water than first-generation vertical farms.

Outwardly, Oishii appears to be doing just fine, contrasting with other vertical farms struggling financially. The company’s choice of pursuing unique, high-end produce, such as Japanese strawberry varietals that are not widely available in the U.S., looks to have been a smart strategic move. Oishii has gained lots of viral attention, and its Omakase strawberries are selling for as much as $50 for a box of 11 online. It’s also being sold in Whole Foods Market and other grocery stores at prices ranging from $6 to $20 MSRP depending on the tray size.

Now, with the debut of the Koyo, Oishii gives tastemakers another rare strawberry to pay top dollar for.

Vertical Farmer Plenty Announces $1B Financing Deal With REIT Reality Income

Vertical farming company Plenty has entered into a strategic alliance with REIT Realty Income to fund Plenty’s vertical farm development. Under the agreement, Realty Income will acquire and provide development funding for properties that will house Plenty’s indoor farms, which will be leased to Plenty under long-term net leases. The agreement provides for up to $1 billion of development opportunities.

As the initial transaction of the alliance, Realty Income will acquire the land and provide development funding for the first farm of Plenty’s indoor vertical farm campus near Richmond, Virginia, which was announced last year. Plenty expects the future multi-farm campus to deliver more than 20 million pounds of produce across multiple crops annually. The first farm to be developed on the campus will grow strawberries with Plenty partner Driscoll’s and initially serve the Northeast market.

If this sale and leaseback type of transaction sounds familiar, perhaps it’s because you read yesterday about a similar kind of deal being used to fund sidewalk delivery robot startup Kiwibot. However, unlike the food robotics market, sale & leaseback transactions are pretty common with real estate assets. Farmers have been using these types of arrangements for decades, so it’s not all that surprising to see REITS start to take an interest in more tech-forward farming players like Plenty.

It’s also not surprising for a capital-hungry vertical farming business like Plenty to look to this type of financing to fund its growth. AppHarvest and Kalera entered into sale and leaseback deals last year after running into financial troubles and largely exhausting access to more traditional growth capital in the venture market. Plenty has already raised a massive $914 million in funding as of last year and had started to run into financial difficulties early this year, announcing they would close their San Francisco facility.

Now, with its new funding facility through Reality, the company has access to a large – but fundamentally more risky – pool of growth capital.

CES Session: The Future of Farming (Video & Transcript)

The first session we will feature is titled ‘The Future of Farming’, a panel which featured experts on gene-edited crops, molecular farming, and vertical farming.

The session description:

The numerous challenges facing today’s farmers require them to be ever-more-efficient to survive. In this session, we’ll look at how farmers are employing automation, IoT, biotech and more to create the farms of the future.

The panelists for this session included:

  • Vonnie Estes, VP of Innovation, International Fresh Produce Association (Moderator)

  • Haven Baker, Co-Founder, Chief Business Officer at Pairwise

  • Amit Dhingra, CSO | Professor and Department Head, Moolec Science | Texas A&M University

  • Katie Seawell, Chief Commercial Officer, Bowery Farming

This content is available to Spoon Plus subscribers. If you would like to subscribe to Spoon Plus, you can do so here.

Google’s Farm Tech Moonshot Mineral Becomes Alphabet Company

Google parent company Alphabet has added a new company to its portfolio this week in Mineral, a farm tech startup that spent the last five years incubating within Google’s X.

The news of Mineral’s graduation to full-fledged Alphabet company came in the form a blog post by Mineral CEO Elliott Grant (previously of Shopwell, a shopping startup sold to Innit). According to Grant, the mission behind Mineral is to “help scale sustainable agriculture”, which they are doing by “developing a platform and tools that help gather, organize, and understand never-before known or understood information about the plant world – and make it useful and actionable.”

According to Mineral, they have analyzed over 10% of the total farmland on Earth, modeled more than 200 plant traits, phenotyped 17 crop varieties, and developed more than 80 high-performance ML models. Mineral’s ag-optimized analysis tools will be used to process large unstructured sets of the world’s agricultural data, sourced from satellite images, farm equipment, public databases, and Mineral’s own proprietary data streams. The company will make this data available to partners to combine this data with their private data to derive insights into yield, genomic understanding, and agronomic discovery.

One such partner is Driscoll’s. The large berry company has been working with Mineral to explore ways to improve data collection in its breeding operations and work on better yield forecasting. The two also worked together to enhance berry inspection using Mineral’s perception tools and, according to Driscoll’s, was able to build a system that many believe performed similarly to human experts.

Another Mineral project Mineral was the creation of a special crop-roving robot named Don Roverto. Don Roverto was used by Mineral to assist the Alliance for Biodiversity and CIAT to accelerate their work to understand and uncover hidden crop traits within the world’s largest bean collection. Using Don Roverto, the Alliance, after thirty years of searching, found a “magic” bean with intrinsic drought-resistant characteristics.

Google has often used X to incubate mission-based startups, and Mineral is no different. According to Grant, they chose ag as a vertical because it is “increasingly believed to be a major contributor to the climate crisis — but it is also a victim of a changing climate. There is no time to waste to find more climate-resilient crop varieties, to transition to less chemical- and fossil fuel-intensive practices, to improve soil health, and to restore biodiversity.”

Israel’s Wasteless Uses A.I. As A Solution for Food Waste

The aptly named Wasteless is a triple threat as it offers a solution that simultaneously benefits retailers, consumers, and the environment. The Israeli company provides an AI-driven solution to cut down on food waste in retail by allowing supermarkets to give consumers dynamic pricing based on the freshness of a given product.

Wasteless has reached a milestone in announcing a partnership with Hoogvliet, a leading European supermarket chain with over 70 stores across The Netherlands. Using Wasteless’ dynamic pricing technology, the retailer will reduce food waste by optimizing costly price markdowns. This partnership forms part of a wider store rollout to stop throwing viable perishable goods into the dumpster, increasing margins while benefiting shoppers and the planet.

“The E.U.’s supermarkets alone are responsible for nearly 7% of all food waste, leading to more than 15 million tons of greenhouse gas emissions,” Oded Omer, Co-Founder, and CEO of Wasteless, said in a company press release. “By the time this waste occurs, all the energy and resources have already gone into the food. It’s the costliest waste we’re creating – indeed, it costs each store up to 4% of its revenues. In addition, Wasteless will help customers make smarter grocery decisions. Our solution also helps retail managers by optimizing inventory control systems. Joining forces with leading innovative retailers like Hoogvliet means we’re another step closer to saving the environment and achieving our goal of reducing food waste in retail by 80% while increasing retailers’ profits. This is a concrete step toward the Food Waste Pledge we signed at the COP27 Climate Conference and other signatories, including the World Wildlife Fund.”

Speaking to the origins of the company, Omer told The Spoon, “I stood in the supermarket, and I said to myself, well, it doesn’t make sense that I’m going to pay the same price for Chobani for that expires in two days and six days,” he recalled. “So, I started to contact some the academic professors and so on, and to understand the perspective of revenue management.”

That revelation in 2016 led to Wasteless, a machine-learning system embedded in a retailer’s data center. It can be applied using electronic shelf markers (which are more common in the E.U. than in the U.S.) or stickers applied to anything from meat and poultry to apples and salad greens. The pricing scheme is done in small increments using sell-by and consumer shopping data. Wasteless’ pricing can also be applied using a consumer-facing application.

To date, Wasteless is backed by $9.75M in funding, led by Slingshot Ventures (N.L.), Zora Ventures (U.S.), SOSV (U.S.) IT-Farm (Japan), Food Angels (Germany), strategic industry-related investors, and Israel Innovation Authority grants.

In 2021, Wasteless announced a collaboration with NX-Food, a German food tech hub, to bring its pricing systems into stores from METRO, one of the world’s leading wholesale specialists. Omer summed up the win-win bottom line for implementing dynamic pricing. “It’s a huge win for us as we grow and show the world what our technology is capable of. Most importantly, this is a huge win for the environment. There’s a lot of talk about sustainability in business, but it only really works if it’s also profitable.”

Israel’s Brevel and Vgarden Team Up to Add Taste to the Alt.Cheese Market

Vegans would agree that cheese is one of the more difficult foods to put aside when entering the plant-based world. A decade ago, vegan cheese options were lacking, and even though the choices have skyrocketed, finding a smoked gouda cheddar. Mozzarella, or provolone’s taste closely approximates its dairy counterpart, has been challenging. Yes, some smaller artisan brands do a respectable job, but finding a creamy, melty vegan cheese that nails taste and texture is a tall order.

Israel-based Brevel is teaming up with plant-based food manufacturer Vgarden to tackle the cheese challenge head-on. In a press release ballyhooing the new partnership, the companies believe the combination of Brevel’s algae-based microprotein and Vgarden’s production exercise will yield a top-notch product.

In an interview with The Spoon, Eyal  Adut, Chief of Marketing and Business Development at Vgarden, and Yonatan Golan, Co-founder and CEO at Brevel, discussed how the two companies would change the face of non-dairy cheese.

What protein is Vgarden using now, and how will Brevel’s algae-based alternative change the product?

Adut: Currently, Vgarden’s meat and fish alternatives contain high levels of pea or wheat protein. The challenge with these widely used plant-based proteins is in mild-tasting products such as cheese when a certain aftertaste is notable in these products when using those proteins. This fact, combined with Vgarden’s cheeses being allergens free (our products do not contain nuts, oats, soy, etc..), creates the situation that most of our plant-based cheeses are high in calcium, fiber and other nutrients yet contain no protein.   We   have   successfully developed cheddar and parmesan cheese with 10% pea protein, which was possible due to the relatively strong flavor of these cheeses

Vgarden intends that all of our cheeses will contain plant-based proteins, and that is why Brevel’s protein,  being taste and color neutral,   can provide us with the required solution for mild-tasting cheeses.

Golan: In terms of functionality – Brevel tries to be as inert as possible – increasing the protein of Vgarden’s cheeses without changing taste, color, or texture. Brevel has been described as a “ghost protein” – it increases protein content without noticing it is there

Will Brevel’s product be used for more than cheese, given Vgarden’s product line?

Adut: Vgarden is constantly researching novel ingredients and will continue to use other plant-based proteins for its meat and fish alternatives, as these serve different purposes, such as texture. The main challenges for novel ingredients in the plant-based industry remain taste, cost, and scale. As more consumers demand solutions for highly nutritious products, we are working with the industry to scale up novel ingredients. Vgarden’s goal is to provide healthy plant-based foods at price parity with the   animal-based   alternative, and   that   is   what   will   drive gardens ingredients choices in the future

Any chance of moving into the B2C space?

Adut: Vgarden has been active in the Israeli B2C space for nearly a decade under the Mahu Mashu™   brand, and its products are being sold in most retail stores in Australia under other brands (powered by Vgarden). Vgarden recently announced its joint venture with Cale  &   Daughters and established garden Australia, which will manufacture locally-made products for retail and food service in Australia. We are aiming to occupy any white spaces in the worldwide market with the right partners on board

What specific cheeses will Vgarden make? More of its hard cheeses and soft cheeses?   Are there certain cheeses better suited for Brevel’s protein?

Adut: That is something Vgarden is exploring and researching. The Brevel protein shows promising qualities, and we hope to incorporate it in all of our cheeses. Vgarden has developed prototypes of mozzarella and cheddar with previous versions of Brevel’s protein, which taste groups received very well.

How will you enter the U.S. market? Any chance for direct-to-consumer?

Adut: Vgarden recently announced it had formed a presence in the U.S.; Vgarden carried out thorough research of the plant-based market in the U.S. and developed its penetration strategy.   Vgarden is   currently under negotiations with some of the leading sales and distribution companies in the U.S. food sector to be able to provide for any future and current demand for Vgarden’s plant-based offerings

Monarch Launches Production of Electric, Driver-Optional Tractor

Monarch, a California-based maker of autonomous electric tractors, announced it had launched production of its first model, the MK-V. The first models of the MK-V, a driver-optional, all-electric tractor, will be going to Constellation Brands, a large wine and spirits producer. According to Monarch, the first six MK-Vs off the production line are heading to Constellation.

MK-V Tractor Launch Video - "The Future of Farming" | Monarch Tractor

The MK-V reaches the production stage after four years of development. Monarch rolled outs its alpha-model tractor in 2019 and the beta model in 2020. After creating a pilot model and testing it at various farms around the US over the past year, the company will begin shipping the MK-V by the middle of next year. A 2023 MK-V will cost $68 thousand minus tax, extras, and a subscription service.

Each MK-V uses six NVIDIA Jetson Xavier NX chips to power its AI. The NVIDIA Jetson AI platform enables the tractor to operate in a field with only machine vision in situations where GPS is not available. Each MK-V has two 3D cameras and six normal cameras, and the machine can run models for multiple farming tasks when paired with different implements.

The operator can run a fleet of Monarchs using interactive automation features, including Shadow mode, where a Monarch follows a worker on the job. The MK-V can act as a tractor or utility vehicle as well as a generator in the field.

While the MK-V is still early in a nascent autonomous tractor market, Monarch is far from alone. John Deere and Yanmar are also building autonomous tractors, while Ztractor has been shipping its electric-powered Bearcub24 since 2019. Others, like the Netherlands’ Agxeed, have three Agbot models.

But with the MK-V, Monarch looks to have the first driver-optional electric tractor. The timing is good, as the MK-V comes at a time when the overall robot-powered ag market is heating up. According to Statista, the total automated tractor market is expected to reach $2.3 billion.

Figure: Global Revenue Forecast, Autonomous Tractors (US$M). Source: Statista

While the future looks bright for autonomous farming, that doesn’t mean most large farmers will embrace robotic fleets immediately. Instead, the integration will happen slowly over time, first with mixed fleets, as farmers adapt processes around seeding, weeding, and harvesting to utilize automation. Building skills for automated farming will also take time, which makes the idea of having a driver-optional tractor like the MK-V attractive.

Perhaps the most significant barrier to robotic farming is cost. The $68 thousand price tag of the MK-V is 2-3 times that of a conventional driver-only gas-powered tractor, so bringing on new tractors will require significant capital outlays for farmers, many of which operate on lean margins.

High Tech Farmer AppHarvest is Rapidly Running Out of Money

Kentucky-based controlled environmental agriculture company AppHarvest has warned in its latest financial report that it only has enough capital to continue operations into the first quarter of 2023.

According to its quarterly report filed on November 7th, the company says there is “substantial doubt” about its ability to continue as a going concern unless it can raise additional outside capital.

As of September 30, 2022, we had $36.2 million of cash on hand, and an accumulated deficit of $270.6 million. In October 2022, we entered into a $30.0 million note and loan agreement with Mastronardi Produce-USA, Inc. (“Mastronardi USA”) and received $15.0 million upon execution. In November 2022, we initiated a third restructuring plan to further reduce operating costs and our losses. Despite these actions, management believes there is substantial doubt about our ability to continue as a going concern and absent additional sources of financing, we expect that our existing cash and cash equivalents will only allow us to continue our planned operations into the first quarter of 2023

According to a story in the Kentucky Herald-Leader, the company needs $85 to $95 million in cash to fund operations for the next 12 months. That’s a lot of new capital in a market where raising new money has become increasingly difficult.

AppHarvest is looking at a few strategic options, including selling Berea farm to its primary distribution partner  Mastronardi Produce Limited (the same company it borrowed funding from to launch the first 5 acres this past month). They are also talking with potential acquirers according to AppHarvest CEO Jonathan Webb.

“There are large conglomerates in auto manufacturing,” Webb told the Lexington Herald Leader. “I mean, look at GM, for example, and all the different auto brands inside of GM. So yeah, we’re actively having conversations with CEOs, with investors, with partners, with anyone who wants to partner with us here in Kentucky and to help make our mission succeed.”

The company’s current situation is a far cry from its early days when it was seen as one of the brightest lights of the CEA farming world. And while the company’s massive capital needs show a potential downside of building automated indoor farms – especially compared with more traditional farms that take significantly less capital to build and run – it’s worth pointing out other high-tech indoor farmers like AeroFarms and Bowery are continuing to thrive and find new partners.

As we wrote a couple weeks ago, the company’s new farm in Berea is impressive to watch in action and will no doubt produce a whole bunch of salad kits once the full 15 acres is operational. Let’s just hope the company can survive long enough to see it come to fruition.

Re-Nuble Aims to Use Food Waste To Make Indoor Agriculture More Sustainable

The role of indoor growing, ranging from small indoor vertical farms to large greenhouses, is vital to sustaining the world’s food supply. Controlled Environmental Agriculture is essential for growing crops in underused spaces, rooftops, and rows of vertical gardens. Seizing upon this vital resource, Tinia Pina, Founder & CEO of ReNuble, has taken up the challenge to help this idea scale. With a best-in-class nutrient and growing medium, Pina’s company has created organic compounds sourced from food waste for sterile, technology-driven hydroponic and soilless systems.

For the dynamic Pina, her vision for what became Re-Nuble started more than six years ago in the New York school system. “I also saw our outreach educational classes for this program were from 8 a.m. until 3 p.m.,” she recalled in an interview with The Spoon. “I noticed what the kids were bringing for class for lunch, and those options were very processed. With that diet, you see a direct impact on their level of attention. And I felt, from a systemic perspective, that will immediately impact the type of productivity and retention of the information we’re teaching. So overall, I always felt that people with better access to nutrition are spending more time being able to be fully immersed and retaining the information. And they are calling less out of work with fewer sick days.”

The genesis of Re-Nuble’s solution, Pina goes on to explain, came from her observation of how food waste was disposed of. “At that time, New York was spending $77 million to export its food waste to China, Pennsylvania, and Virginia. And that’s simply because we don’t have the composting infrastructure to handle it,” Pina said.” I wondered how we could make food waste a consistent alternative for conventional synthetic fertilizers by doing it for soils or hydroponic systems. So, we focused on using food waste as a viable alternative for chemical fertilizers in indoor grow environments.”

Specific to its product lines, Re-Nuble’s Head of Business Development & Strategy, Riyana Razalee, said in a company press release, “CEA is a large part of the future of farming, and so, we have to prioritize its role in decarbonization. Solutions need to address the gamut of the food supply chain, decarbonizing as many parts of it as possible. This vital issue is what our team is focused on”. The company states that for every acre of an indoor farm that uses Re-Nuble’s organic hydroponic nutrient, Away We Grow, the company can remove up to 5 metric tons of carbon emissions annually. That’s approximately one home’s energy use for a year.

In addition, its grow medium, ReNu Terra, supports the anti-peat movement. Companies, activists, and governments are demanding the reduction of drained peatlands. When farmed for agriculture needs, peat changes from a carbon sink to a greenhouse gas emitter, releasing approximately 1.9 gigatonnes of CO2e annually. This amounts to 0.4 billion gasoline-powered passenger vehicles driven for a year.

Pina said Re-Nuble has three customer segments now. First is the consumer market. Away We Grow could be part of a kit offered for an indoor growing system. “Consumers are eager to find more environmentally and people and animal-friendly solutions,” Re-Nuble’s CEO noted. The second segment is commercial farms such as Gotham Greens. The third, she said, is “disruptive farms.” For the last group, she stated, “There are severe supply shortages globally, and so there’s a lot of urgencies to find something that could be more sustainable, but even more importantly, something that they can afford.”