ZipGrow is one of many vertical farming companies operating in North America. What is the unique value proposition that differentiates your company and how do you fit in the wider agriculture industry?
ZipGrow is one of the very few truly vertical solutions since we grow in Towers, not in stack trays. Space and labor efficiency are the main benefits of this vertical plane system, but they are closely followed by versatility. A core characteristic of our model is the holistic approach where our tower system can be put in home kitchens or schools, but can also be scaled up in very large farms. Besides these, education support is our main value proposition; since we are not growers but manufacturers of equipment, we are helping our customers to start businesses and understand hydroponic farming. Back in 2015, when we first started, we attracted mainly small entrepreneurs, husband & wife type of ventures, that wanted to grow locally and sell to the farmer's market. These early adopters slowly morphed into a mainstream movement, and, as of three years ago, our sales pipeline is filling up with multinationals and large commercial entities.
Because we are dealing with long Towers full of produce, they are easier to put through automation from harvesting to planting. At the moment, we are deploying multiples per month of actual commercial entities, being the widest spread vertical farming system in the world. It seems like vertical farming is being embraced more by the U.S., while Europe pushes for the classic horizontal models. A surprising tendency, considering the continent's lack of space and propensity to adopt tech faster than North America. However, growing leafy greens in a single layer in greenhouses is not a very efficient approach and, in the long run, they will have to reassess this choice and probably transition to vertical farming.
One of the biggest grievances in the past two years has been the spikes in energy cost. How are you handling this issue, considering that vertical farms cannot capture the same amount of energy from the sun?
Energy is a big concern for us and because we sell our products all over the world, we need to explain to our consumers what it means if they plug their farms into the grid, in terms of energy consumption and local energy prices. However, on the bright side, we have the only system that can do vertical growing in greenhouses, and it is especially useful in areas like the Caribbean or other remote islands where energy is extremely scarce and unstable. Last year, we registered a 30% decrease in energy consumption thanks to a partnership with LED providers that use water cooling. Interestingly, our clients in Europe have identified the building itself as a source of heat and can tap into that to reduce costs in winter. We strive to continuously explore ways to improve energy consumption efficiency and collaborate with partners who can bring sustainable production technologies to our mission.
Farming and technology seem to have become the new power duo in the industry. How are you seeing this intermingling?
I come from traditional farming where you have to make profits with very little margins, and I see the industry going into a pure tech direction, where many companies are promoting various solutions but tend to forget they are agriculture players, in fact.
Customers need to become profitable from day one in order to support their staff and shareholders, so ten-year promises of success are simply not feasible in our industry. At ZipGrow, we are constantly trying to increase our efficiency by improving the automation levels every year. However, we are never losing sight of the fact that our mission is to help grow food and bring revenue to our customers.
Food security is a central topic of discussion nowadays. Can vertical farming help solve this conundrum?
It is truly unbelievable that, in this day and age, in North America, we have food recalls of Salmonella or E-coli on lettuce or leafy greens and we cannot identify what country the produce came from, let alone what farm. The distribution model is broken and the industry is trying to fix it by duplicating it indoors. To avoid this walking in circles, we are proposing a completely different approach that could address food security issues by reconnecting people with food and the farmer. Local production, close to urban centers, allows consumers to stay in touch with the origin of their fruits and vegetables, and this not only assures peace of mind but also a much more secure supply chain.
Where are you seeing ZipGrow in the years to come in terms of expansion and, maybe, business diversification?
We have a huge opportunity to change our actual profitability by what we are growing, and by stepping away from the large lettuce farms that everyone is pursuing nowadays, we can stumble upon new and interesting opportunities. For the next two to five years, we are looking at alternative higher margin crops in the range of biopharmaceuticals, cosmetics, cannabis or supplements. In the cosmetics space, for example, there is no traceability or security when sourcing from developing countries, and we do not really know if these crops involve child labor or cutting down rainforests. By growing all these plants in the labs that create the end product, we could become much more sustainable and responsible. According to the base models that we experimented with until now, there is great scalability potential in these non-food crops so we are going to pursue them in the years to come.
