Episode Summary

Join Harry Duran, host of Vertical Farming Podcast, as he welcomes back to the show Eric Levesque, co-founder and Managing Partner at Cultivatd, an organization that works with some of the indoor farming industry's best product developers and technologies to help people discover which vertical farm tech is best for their projects. Since he was last on the show, Cultivatd has made some incredible strides, including raising $3.5 million in funds during the past year. 

Today, Harry and Eric discuss the increasingly evolving vertical farming industry, what makes a great team and the process of educating larger, more entrenched corporations in the field of vertical farming. Eric expounds on how Cultivatd’s business model has changed in the past year and a half and their expansion efforts into the United States (USA), United Arab Emirates (UAE), and Australia. Finally, Eric speaks to what continues to drive and motivate him and speculates on new technologies that excite him about the future of vertical farming. 

Episodes Sponsor

Cultivatd – https://cultivatd.com/

What We Covered:

03:41 – Harry welcomes back to the show Eric Levesque who provides an update on the insightful work he and his team are doing at Cultivatd and how they identify companies to partner with 

12:13 – How Cultivatd’s business model has changed over the past year and how it has changed the trajectory of Cultivatd

17:38 – Massive Fundraising

25:12 – Eric shares what he’s seeing in the vertical farming environment in places like Dubai 

32:09 – How Eric approaches building an effective team  

33:48 – More and more vertical farming companies entering the industry 

35:47 – New tech that has Eric excited about the future of AgTech 

37:19 – Educating larger corporations on vertical farming 

41:24 – Eric speculates on the evolution of the industry and how it impacts Cultivatd’s role 

45:14 – The importance of continual education in the vertical farming space 

46:33 – What keeps Eric driven and motivated 

50:15 – Harry thanks Eric for joining the show and reiterates where listeners can go to learn more about Cultivatd and connect with Eric 

Tweetable Quotes:

“The majority of our clients, on the small side at least, are telling us, ‘I want to grow something but I’m not sure how to get there.’ And so what we do is we will tailor a solution that we feel adequately resembles what they are trying to accomplish. And then we can tailor it from there depending on what they actually want to do. Do you have a building? Do you have funding? What scale do you want to start at? What market are you trying to serve? What crops in your area are commanding a price and then we can just give them some tips.” (09:22) (Eric) 

“Any entrepreneur knows that, at least in the beginning, you have to be a little bit agile with your business. Sometimes the model seems to pivot quite a bit and that’s definitely what we’re seeing here.” (14:33) (Eric) 

“One of the biggest issues for funds is that usually there’s not enough projects for it and you’re always searching for something. In this industry it seems to be the complete opposite where we have too many projects that need funding and too many great businessmen with good ideas who are in great locations.” (21:02) (Eric) 

“There’s definitely never a lack of companies coming into this space, but that makes it super exciting. We’re bumping into new partners, new innovations.” (34:13) (Eric) 

“We’re actually looking to potentially open up a hybrid farm that we’re gonna turn into a vertical farming university, hopefully this year. That’s kind of an ambitious plan that we have.” (45:40) (Eric) 

Links Mentioned:

Eric’s LinkedIn – https://www.linkedin.com/in/eric-levesque-a03a33163/?originalSubdomain=ca 

Cultivatd Website – https://cultivatd.com/ 

Link to Upstart University – https://university.upstartfarmers.com/ 

Link to Agritecture – https://www.agritecture.com/ 

Sponsor Info:

Cultivatd Website – https://www.cultivatd.com/

Cultivatd Instagram – https://www.instagram.com/cultivatdco/

Cultivatd’s Twitter – https://twitter.com/cultivatd

Cultivatd’s Facebook – https://www.facebook.com/cultivatd/

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Mentioned in this episode:

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that's spelled C-U-L-T-I-V-A-T-D.com,

or click the link in the show notes. Do you have a building? Do you

have funding? What scale do you want to start at? What market are you trying

to serve? What crops in your area are commanding a price? And then we can

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if you're starting a smaller farm, you want to try monocropping instead of diving into

a bunch of different things, and just some things that they haven't thought of in

the past.

Welcome to the Vertical Farming Podcast, weekly conversations

with fascinating CEOs, founders, and agtech

visionaries. Join us every week as we dive deep into the

world of vertical farming with your host, Harry Duran.

Vertical Farming Podcast, Season 4. Welcome back.

First-time listeners, you're in the right place. If you're looking for a show where we

interview some of the most fascinating CEOs and founders of the leading vertical farming

companies, From around the world. I'm your host, Harry Durand.

In case you missed last week's episode, I spoke to Scott Bryson of

Orbital Farm. It's a company supplying fresh veggies,

fish, vegan protein to local markets around the world. Scott has

spent his life and career as a problem solver, from picking stones and baling hay

in farm fields to becoming an entrepreneur at 22 and building a

multimillion-dollar advertising agency over a decade. Really

insightful. Conversation with Scott, make sure you check that out. This week I speak

to Eric Levett, co-founder and managing director at Cultivated, our

seasoned sponsor, and round 2 visit

from Eric. Can't say enough good things about the relationship we've

had with Cultivated, and it was great to bring Eric

back for a deep dive and a revisit of what's been

changing in the industry rapidly in the year since we've

spoken last. And it is a Insightful

conversation, to say the least. We had one new review come in from

Tyler. He says, great podcast with key leaders in

indoor ag. I really enjoyed the guests and the discussions. Highly recommend,

5 stars. Thank you for that, Tyler. Don't forget, if you'd like

your review read out, head on over to ratethispodcast.com/vfp,

and we'll be sure to read those out on future episodes. Okay, let's get into

this Round 2 conversation with Eric. So Eric Levesque, welcome

back for round 2 on the Vertical Farming Podcast. Glad to be here.

Thanks for having me. Yeah, so lots has been happening

as of this recording, December 28th, uh,

2021. We recently

announced the news that you had completed your Series A

$3 million round, so congratulations on that. Thank you.

What's, uh, I mean, there's lots of places to start, uh, You know,

interest in anything vertical farming related seems like it's been taking

off. And like, what's top of mind for you

as you think about— I mean, it's probably been over a year and a half

since we last chatted, and, you know, what's been buzzing in your mind?

Yeah, it's got to be about a year or so since we've chatted, definitely. Yeah.

This year has been pretty wild. You know, you start a

company and you set some metrics for yourself, but, you know, that's just kind of

a nice dream to have for yourself. It's

been, yeah, I don't know, the reception has been out of this world. I think

we've really hit a sweet spot here. We've hit a niche and the

reception from everyone has just been out of this world. The service we're

offering obviously is needed in this industry to, you know,

help people really succeed in purchasing farms and getting the proper

education that they need. And yeah, I guess

we made some assumptions of how it would go, but it's been, we've been crushing

those metrics, which is a dream for any entrepreneur. Talk a little bit about

those assumptions in the beginning. Like, you came into—

and maybe a quick refresher for folks. Obviously, we'll direct them back to the

first conversation we had together, but for people who just

want the overview of the Cultivated story and how you got started, if you want

to give the abbreviated version. Yeah, so my partner and I have

been in the industry for the better part of a decade. We've been in a

few different startups in the space, and we realized that one of the biggest

problems was that people were being pigeonholed into the wrong solution. It's really

cumbersome to try to try to find the right information when you're getting into vertical

farming, and to try to find the right company for you. And so,

sometimes you might bump into the wrong company and go down that rabbit

hole and end up purchasing a system that, although is great for something, might not

be great for what you want to accomplish. And we saw so many

farms closing, we kind of wanted a new way of addressing this problem. So, what

we did was partner with 40 or 50 of the industry's best companies to

be able to offer their solutions. And so, when somebody reaches out

to us with their goals and what they want to accomplish, we'll have a solution

Regardless of what that might be. And then we even

offer a farming as a service package to kind of wrap it all together,

where we'll send farmers to your location for a short or extended

period of time to either train or operate your farm head to

toe. You mentioned this idea of like people starting

and going down the wrong path. Are there some like horror

stories that you heard of people that when they got started or they had a

preconceived notion about what they were expecting with a different service and

it didn't turn out the way they planned? Yeah, I think there are quite a

few people who are not educated properly in

terms of thinking that these systems are more automated than they are.

Obviously, there's a great deal of automation, and the systems are

wonderful, but you have to be careful in telling somebody that the

system is automated when most of the time it's kind of the lights turning

themselves on or off, or the doser, you know, pumping the right amount of nutrients

to the plants. But there is still quite a lot of labor that goes into

the majority of these. And so I think it's less on that side of things,

although that is an issue, and more in terms of, you know, somebody

wants to grow kale and basil and they go to your company and say,

this is what I want to accomplish. You might know that the neighboring company does

this better, but you're in business, and so you still have to suggest your

products to them. And so that's why we ended up with this solution. We just

kind of wanted to alleviate that issue. It's really hard to find the

right stuff since everything is so new. And so when you're coming in here, we

just want to make sure that whatever you want to do, if you're wanting to

be a part of the solution and join this industry, we want to give you

the best chance at succeeding, which is why we partner with companies we trust and

we work well with. And so we've got something to offer to

everyone. What were those early conversations like with some of these

companies? There's other people that have done

similar brokerage-type services in the past, I would imagine.

And I wonder, as you start to have these early conversations,

they're trying to figure out who you are, what's your background, and what's your

approach and how you're going to treat this differently. Yeah, so we

were a bit lucky in that my partner and I, like I said, had been

in industry for a while, and so reaching out to most of these companies, I

had worked with a good portion of them, and so they all—

we kind of all worked together. We had a pretty good reputation coming into this,

and so setting up those agreements, although it's time-consuming, was

fairly simple. But yeah, nothing more than that. I

think they kind of knew what we were aiming for, and we've had, like I

said, quite a reception. Everyone has really loved

the concept. We're able to offer the majority of our services for free because we

get paid on the back end from the suppliers. And so it really alleviates the

pressure of somebody trying to come in and thinking, I might have to pay X,

Y, or Z for a plan to just see whether I want to do this

or not. And so that's been, you know, I think a big portion of our

success. Where do you see people have the most success when they

work with you in terms of pre-work experience,

business experience, farming experience? Is there like a sweet spot

where When they start, like you've seen, because they have like A,

B, and C, they're more likely to succeed? Yeah, so we're basically

just doing all of the legwork for you. You tell us, the

majority of our clients for on the small side at least are telling us,

I wanna grow something, I'm not sure how to get there. And so what we

do is we will tailor a solution that we feel

adequately resembles what they are trying to accomplish. And then

we can kind of just tailor it from there depending on what they actually wanna

do. Do you have a building? Do you have funding? What scale do you want

to start at? What market are you trying to serve? What crops in your area

are commanding a price? And then we can just give them some tips that some

people kind of overlook, where usually if you're starting a smaller farm, you want to

try monocropping instead of diving into a bunch of different things, and just some things

that they haven't thought of in the past. But we help with business planning, we

help with marketing, market analysis, research, all

of these things. So we're really taking out all of the legwork and giving you

basically a finalized business plan with a number

at the end that says, hey, if you want to move forward, this is it.

And, you know, then you just kind of sign on the dotted line and you're

off to the races. Are people expressing an interest in

specific types of crops? Are you seeing trends? I think we're seeing still

the majority of people for leafy greens and herbs since that's what the systems

are capable of producing. But we're seeing a

lot more trending towards fruiting crops, mostly

strawberries, which is kind of the next big ticket item. And so a

few companies are kind of pushing their tech to see what they can accomplish in

terms of that, but I would assume that strawberries will be the next

frontier for us. I had a really good conversation with Hiroki from

Oishi. It was fascinating to understand

how important the varieties are. It's almost like wine

in France, right? That each region in Japan has like different

strawberries, and I guess because of, you know, obviously because of the size, it's something

that people have trended towards as the next crop that's of

interest to them. Yeah, certainly. I think there's a really good margin there. And

because the crop is so hard to, to get your hands on in

specific parts of the world because it's only grown in some very small

portions, yeah, it can, it can definitely be a little bit tricky to

get your hands on them. So being able to offer a solution that grows this

365 days a year regardless of where you're located makes that

product even more premium. How much of this is a learning process for you,

or is this the part where you rely on the partners who have a specialty

or expertise in certain crops? Yeah, so in the beginning, we

certainly leaned on them a little bit more than we do now. We

have been able to round out our team. We're about a dozen full-timers right now,

and so everyone's kind of taking their crack at a few of the partners to

make sure that we are specializing. But we do lean on them quite a bit

still. Obviously, it's their technology, it's their experience, and we want

to make sure we use the best version of that. But

yeah, I'd say it's a good mix, but in the beginning it was certainly quite

a bit of leaning on them. So talk a little bit about how the,

if any, the business model has changed since the last time we

talked and what your thoughts were about, you know, if I was to have asked

you back then what you thought it would look like a year

and a half into the future, how different is that than what's actually happened? Yeah,

so I think last time we spoke we had assumed that we would be

seeing smaller deal flow. We

had expected deals to be probably in the range of a quarter million to half

a million, where our average deal right now is probably $5 million plus, and

we're working on quite a few mega projects of $100 million

plus. And so, yeah, I guess that would be the biggest, the

biggest kind of shock to me is that there are so many larger corporations who

are looking at doing things at scale and that have realized

this is the only answer for the time being. We have to adapt to this.

We have to go indoors. We have to be part of the solution. And so

they're looking at making change at a really high level on a big scale.

And so it's pretty exciting for us. We're

biting off maybe almost more than we can chew, but we're bringing on the right

people to make sure that we don't have any issues with that. And so

yeah, we're really excited to see what 2022 brings. It feels like a

strike while the iron is hot moment, right, in terms of the interest in

the space. I'm wondering if that's changed the

mix of the The partners you had, so I think the 30 companies that

you started with, how has that changed? Has that grown? Have some companies

left and others come on board? Yeah, we haven't any companies as

of yet, I don't believe, but we have brought on quite a few

larger partners, some of the bigger technology providers to be able to

satisfy the needs of some of these big clients who are looking at doing, you

know, operations where they're growing millions of pounds a year. And we've also,

we'll be announcing in the new year, a capital fund called Cultivated

Capital with our funding partner, who has just closed our

Series A with a minimum subscription of $50 million that we're hoping to

oversubscribe by quite a bit so that we can help fund some of these larger-scale

projects that we really believe in as well. So really an A to Z solution

here where we'll be able to fund the project, at least a portion in equity

financing, and then also select a technology and then

help to operate the farms with our farming as a service package as well. How

has that changed the things you thought you'd be focused on

when you started? Yeah, I think any entrepreneur knows that at

least in the beginning you have to be a little bit agile with your business

since sometimes the model seems to pivot quite a bit, and

that's definitely what we're seeing here. We were going to be focusing, you know,

on just smaller clients on a one-on-one basis, and now we've kind of

segmented the company into 2 or 3 different

portions where we'll have these smaller farmers who are looking to just

start a little farm for their community, and then we've got the larger-scale

projects with bigger conglomerates, and then we've also got the farming as a service

for, for all of these. We weren't thinking that the farming as a service would

take off quite as much as it did, but it seems like almost everyone is

wanting some level of oversight for their farm, at least in the beginning, to ensure

its success. So that's a super exciting avenue. We've brought on some people

specifically for that. as well. So they're operating that side of the business, but

everything's been flowing extremely well so far. Talk a little

bit about how that's changed or what you need

to adjust as the founders, like

maybe the skill sets that you guys had in place and were thinking

of hiring for. Has that changed at all in terms of because of the

scale at which you're growing now? Yeah, so the team members that we've brought on

recently have actually kind of replaced the jobs that we thought we would be doing

in the beginning so that we could focus on some of of the bigger picture

and the larger projects that we have. We didn't

anticipate so much travel, return to travel. I've been on the

go quite a bit doing kind of the conference circuit and visiting with a lot

of our partners and some of these bigger farms, which has kind of taken me

out of my previous role, which was kind of in the business development and

sales side of things. But we've brought on some really key people. Almost all

of our staff comes from the industry as well, from different companies. So it's been

a bit quicker to get them up to speed since they're coming with a good

base of knowledge. How has that changed your

management style, or how have you had to like adjust in

terms of like, you know, learning or putting yourself in a position

that is different than what you thought would be when you started? Yeah, I feel

like ever since I got into this industry, it's been a million miles a

minute. I've been kind of just thrown into the fire from day one, and

it hasn't really slowed down. Yeah, I kind of always feel like I have a

grasp on something, and then somebody throws me a brand new curveball of something new

and gigantic and exciting that we can't turn away from. So

yeah, it's definitely always evolving. I think we're still kind of finding our footing as

a company, but this Series A certainly helps to kind of cement

what we're looking to accomplish here. So how have you had to grow

as a person and as a leader? Definitely had to get a

bit more organized, which is quite the task for me. But yeah,

we've, like I said, we've hired some people to help with that specifically as well,

just manage my time better. Obviously, when you start a company, you're of just

seeing what sticks and seeing what the market has an appetite for. But then

when you raise some investment, you start to be held a bit more accountable

and you got to make sure you perform based on the metrics that you've pitched.

So yeah, I think we've got the right team in place for it. I'm super

excited to see what we can pull off here. How long was the

process for the funding? Talk a little bit about that journey. The

funding took a little while. That was an evolving discussion as well.

And because the fund was a condition of it, of the fundraise.

It added some complexities there. So raising

money is always kind of a complicated task since it's

always got so many moving parts. It took us

probably about 4 months, which is actually not so bad in

terms of how much we raised as a new company, and attaching a $50

million fund to that is quite a big deal for us obviously and for the

industry. So 4 months might seem long, but it's actually

probably pretty short in terms of Have you ever

had— had you had experience raising that amount of money before? So we did

raise a pre-seed round in, I believe, January or February, maybe right before

we spoke, or that was about to close last time we spoke. But no,

that was as much as we had raised. We had had different discussions with different

groups, but yeah, this is the most I've raised so far.

And like I said, attaching the fund, we're hoping to oversubscribe to

$200 to $500 million, fingers crossed, so that we can really make a

dent in the industry and make a big splash this year. So when did

the idea for including the fund as part of the raise come about?

So our investor was really interested in

owning some equity in some different farming projects and doing his own farming projects as

well. And so he kind of came up with the idea of a fund

with us, and we were kind of positioning it in a way

that we could invest and get some equity from these farms that we're

funding and launching and operating ourselves. And then we were kind of debating back and

forth whether we should be investing in startups like ours who are

leading the industry or if we wanted to do farms solely. And I think for

this first fund, we'll be looking at doing equity

financing solely for farming projects, probably

within $2 to $5 million range per deal. But

these details are still being ironed out. The fund is closed and we'll be announcing

it probably first week of January. But yeah. I imagine

you have a lot of the experience from a due diligence

perspective because it's what you guys do. So is that What you're

applying to thinking about which of these projects you guys want

to actually invest in? Yeah, exactly. So we'll be managing the fund and picking which

projects will be being chosen by our fund. One of the conditions is

that they must be working with a brokerage, obviously. There will probably be some

form of farming-as-a-service contracts unless you have a team in

place that we feel is capable of operating it without our help. But

yeah, there are a few conditions we haven't fully ironed out. We've

identified enough deals for nearly the first

set of $50 million that will come into the fund already. We've been having chats

with them. These conversations have been ongoing for a while, but we were

just waiting to kind of dot the i's and cross

the t's before we announced it to the public, which should be, I

believe, the first week of January, as mentioned. Yeah, so it coincides

nicely with the release of this episode. What's been the

reaction or the interest? Is Were you surprised by that as well?

Yeah, so the fund obviously has been super exciting for us. We know that launching

that is going to get a lot of attention. Everyone that we've spoken to about

it now that it is kind of closed has been extremely

excited. Everyone has projects they want to bring to us. Obviously, that's why we're hoping

to oversubscribe the fund. There is, you know, one of the biggest issues for funds

is that usually there's not enough projects for it and you're always searching for something.

In this industry, it seems to be the complete opposite where we have too many

projects that need funding. And too many great businessmen with good

ideas who are in great locations. And so we have to be really

selective in which companies we work with and which projects we take

on. But that's kind of an exciting part and obviously

a pretty good thing when you have too much business to take care of.

How do you think about the mix of crops or

technologies, or are you trying to make sure that that's balanced out as

well? No, not specifically. I think it'll end up being that way,

but I don't think we really have a focus on that. We're really looking for

projects that make sense. You know, some locations make

more sense than others, and some technologies in certain places make more sense.

And so we're just making sure that we're doing our due diligence and vetting

the partners and the people bringing these projects to us to make sure that they

have the best chance of success. Are you starting to see overlap

in terms of multiple similar type

projects existing in the same region and you have to be

selective about which ones you help support? Not

yet. We obviously don't want to create competition for people that we work with. That's

definitely not what we're here for. But I think for the time

being, there's still so much appetite for vertical farming and such a need for,

for produce to be grown in these locations that even if we were to deploy

multiple farms in the same location, they still wouldn't really be

affecting each other. That's one of the most common misconceptions about indoor farming

is that if somebody puts a small farm in a city of 100,000

people, then there can't be another one when there could actually be a dozen and

they probably wouldn't even really be aware of each other's existence. Yeah, I think the

biggest analogy people can think of is just multiple big chain

supermarkets existing in the same— or even like a CVS across

from a Walgreens. Yeah, exactly. It's the same type of vibe.

How much of that is an education process for the people, for people that that

are worried about competition? So most people will bring

that up. It's been, I wouldn't say an issue, but people

usually will ask for some form of exclusivity. We kind of have to comfort them

and tell them that it's really not needed. There have been deals

with some companies for exclusivity in a certain region based on aggressive

expansion plans, but yeah, that has been one

of the things that people have been a bit concerned about, which seems to be

pretty simple once we show them the metrics and the market analysis that we've done.

and the appetite for how much it really needs to be grown in a city

of that size, and then how much they're growing, they see that they're, you know,

maybe growing half a percent of what is being consumed in the city, it makes

them feel a little bit better. And how much of the support do they get

from you versus the partners they eventually get connected with when it

comes to the marketing aspects as well? So,

I'd say it would depend on the partner, but for the most part, it's probably

about 50/50. We offer ongoing support for the lifetime of the

farm, on our end, and most of the companies are pretty good at

doing that as well. So we just want to make sure that they're fully supported.

Depending on what level of help they require, there can be some

fees to that, like the farming as a service. Obviously, if we're sending somebody to

your location, that's a paid service. And then if you want a business

plan or some market analysis or help with research, usually we just

quote based on the size and scope of the project. So you've been doing a

lot of travel recently. I think we had to work a couple of times to

get this scheduled because you were in Dubai. So what's been

the itinerary the past year, where you've been traveling to?

So I just came back from Dubai recently. I'm actually leaving for Texas

in a few days here for the next few months, try to escape this Canadian

winter. So that's pretty exciting. But yeah, I've

been mostly in Canada and the States doing some of the

conferences and meeting up with our partners that we didn't have a chance to visit

with during COVID But we are looking to expand right now. We have some

really big projects, one or two in Texas, one in Perth,

Australia, and a handful in Dubai and we're looking at opening offices there,

which was part of this funding round as well. So you should see some pretty

extensive and aggressive expansion plans from Cultivated this year.

Can you talk a little bit about the sort of the environment there?

Not the physical environment, but actually like the vertical farming space,

like when you go to places like Perth, when you go to Dubai, talk a

little bit about what you're seeing and hearing on the ground there. Yeah, so this

was my 4th time in the UAE, I believe, and the last few

times there definitely was an appetite for it, but I think the

general consumer was not ready to pay a premium price for a premium product, which

seems to be coming around now. You know, when we got into this

industry a handful of years ago, everyone I would talk to about what I was

doing had no idea and had never heard of it, and that seems to be

happening a bit less and less, and people are starting to understand that this really

is the only solution That we have for the time being. And so that if

we don't adapt now, we're going to be left holding the bag, so to

speak, in a few years from now. And the UAE seems to really be coming

around. The government is pouring hundreds of millions of dollars of funding

into projects like this. And I think more and more

people are just paying attention and realizing that this needs to be done.

So from my dealings there, it just makes sense for us to have an

office and maybe a small staff on site. Obviously, it's a lot easier to do

business face-to-face and makes things a bit more comfortable. And so

we're hoping to have an office in all 3 of those locations before the year's

end. What type of farms? Is it the same mix like what

you would see here in the States? You know, everything from container farms to, you

know, obviously the big box spaces. Are you seeing that same mix in places

like Dubai and Perth? So we're actually seeing kind of a mix of

what we're calling a hybrid farm where there'll be some container

aspect and some warehouse aspect and some greenhouse aspect as well.

Not all of them being copy-paste versions of each other, but some

environments like Dubai are a little bit better for

greenhouses just based on the weather out there and the

lack of water and some other issues. But yeah, we're really seeing

a mixture of people want to grow different crops

and they're realizing that not every crop can be grown as well in

every system. And so they're really doing a mix to

alleviate that and to make sure that they're able to grow some berries with some

fruits, maybe some vine crops and just to

kind of diversify the portfolio. What's the mix look

like when it comes to thinking about things like access to power? Obviously,

that's going to be very important for the running of these farms and that's

different from the— actually, when you mentioned Texas, they just

had the complete issues with their power last

winter. Do different regions have different challenges

when it comes to things like that? Yeah, so the biggest challenge for a lot

of the regions is water scarcity, which

is one of the biggest problems that indoor farming addresses. And

for power, we've actually been seeing more and more projects where we have

a microgrid partner that we're working with now that would be installing microgrids in some

of these locations, especially on tropical islands where the power is

extremely unreliable and you might be without power for 48 hours at a time,

once a week. They have gigantic backup generators there, but

that's obviously not the best possible solution for projects like this

where you can't really have any downtime and generators can only do so much.

So we're looking more and more into installing

microgrids specifically for these larger-scale projects, especially the ones that

are upwards of $10-20 million. And

is that relationship that you had or that factoring that into the equation,

the idea of microgrids, is this the first time you've had to think to We

hadn't really thought about it so much until we had a large deal in

the Caribbean on an island where, like I said, the power was shutting

off once a week at least for 24 hours. And so,

installing a system like this that would grow millions of pounds of

food is going to require quite a bit of power. It's going to need to

be very sturdy and very robust and make sure that it

addresses those problems, which is how we kind of got connected with a microgrid partner.

and started going down the line of, hey, if we wanted to install these in

locations X, Y, and Z, what would that look like? And what's that add to

the CapEx, but then remove from the OpEx later on? And so this is

going to be a partner you're going to be working with going forward? We have

more than one partner we've spoken to, but there is one that we've identified that

I think we'll be moving forward with on the majority of these projects. And then

that situation that you saw with Dubai, that's basically— is that— do you

see the same things? Because you mentioned Perth as well as— and I remember from

the announcement that it's one of the key locations you're focusing on. Yeah, I think

it's less of an issue in some other locations like that, but there

are still quite a few places. We have a deal that we're working with in

Lagos right now that has absolutely no power and has these same

issues. So tackling these water and power issues is going to

be a big proponent of installing some of these larger farms in

areas that really need it. Are you running into any regulation

issues or government-related hiccups? So

far, not so much, although that's not my forte. We do have people that kind

of handle that portion for us, but no, less than you

would imagine. So, I mean, I imagine they're, to the extent that you're

providing the access to food that's

previously been, you know, not available, I

don't know that they're— I mean, imagine to some extent welcoming you with open arms,

but also trying to make sure that you have all the

resources at your disposal to make sure that the project is a success.

Yeah, absolutely. And that's why we brought people on to the team for the farming

as a service side that are kind of identifying even more at scale

all of these metrics and all of these things that need to be accounted for,

which includes obviously sending people in visas and power and

all of these things that sometimes are overlooked when you just kind of see the

grand scale of a project and you say, wow, it would be great to deploy

a farm in Lagos and

feed a million people, but that's going to require 100 people

to operate the farm. It's going to require the microgrid partner. It's going to require

visas and accommodations, travel. Where are we putting these people?

Where are they going to live? What's the term? What's all these other issues? So

that portion, like I said, we've brought somebody on specifically for that, which

has helped us greatly to kind of flush that out and determine

what that's going to take. Yeah, it is quite a bit of work, but in

terms of regulation, it's been simpler than I had

previously anticipated. Where are you being personally pushed out of your

comfort zone because of the rate of this growth? I'm

generally pretty easygoing, so I kind of tend to go with the flow.

I've had it pretty easy this far, especially with this company. The staff I have

around me is fantastic. I definitely wouldn't be here without them.

I haven't been pushed out of my comfort zone a bit too much. Honestly, doing

some stuff like this in the limelight is a little bit odd for me. Definitely

not something I would have wanted to do previously. But

yeah, it's honestly, everything's been so good. It's hard to find something

to complain about. How do you think about the mix of the team

that you have to build to sustain this growth and to

ensure that everything, you know, all the moving parts, especially now

different locations, you know, I don't know if these are things

that you thought of when you started, but I imagine there's

some different things that are top of mind for you than they were maybe a

year and a half ago. Yeah, certainly. So, we

mostly assumed we would become kind of a sales and marketing

team, and that's kind of the focus that we had with our original staff

members. Obviously, this farming as a service is a gigantic endeavor that will

require hundreds of employees for these locations, the majority of

which we hope to find wherever we deploy these farms.

We have started warm pooling. We have open applications

for farm tech operators and some other roles that you can apply

for directly on our website or through our LinkedIn. But we will

have to find, you know, like I said, 100 or so people for these

deployments, which has been the biggest pivot for us. There

aren't a ton of people who have a handful of experience farming

indoors. And even though farming outdoors does translate quite

well, there is still quite a learning curve that we're looking to bridge the gap

with. And so, we have a handful of farmers that we have

on our staff who have some experience, and we've been sending them around the world

to our partners to work with them so that they learn their

technology better, so that they'll be able to transfer that knowledge onto these new

employees. But I would say that that's definitely been the

biggest challenge thus far, is just finding more operators who are willing to

move to different portions of the world and operate these farms. It feels like there's

a, like, a moment where the awareness is just

continuously increased. And, you know, we're on season 4 of the show, and

it feels like when you think you might be hitting a plateau, it's just like

new companies coming up and new people going to specific

niche industries within vertical farming as well. Are you seeing

anything new in terms of technologies or companies that are

moving into the space? There's definitely never a lack of companies

coming into the space, but that makes it super exciting. We're bumping

into new partners, new innovations. We're seeing a lot more on the

smaller side of things, on the hobbyist side, just

somebody who wants to go kind of off-grid in their home with some little, little

devices or little machines that you could have in your kitchen, and then some

larger scale ones for restaurant use and hotel use, which are

really cool. I think in the beginning, Those were kind of

piecemealed a bit and just kind of an idea,

but these new iterations that we're seeing from these companies, like fully

automated with an application on your phone that allows you to run it and that

tells you when it's going to run out of nutrients or if your plants aren't

getting enough X, Y, and Z, is super cool. It's really taken

all of the grunt work out of it. And so you can have one of

these systems in your home growing all the herbs and lettuces that you could ever

want, and it's kind of at the touch of a button, it turns itself on

and off and tells you, you know, 12 hours or 24 hours

before you're gonna have any issues to ensure that it runs properly. So

that part's been pretty cool. Any of them that you've been able to test in

your own home? Yeah, quite a few actually. Most of our partners

who have those smaller scale models have sent us some for testing. So

some that we work with like Grobo or Just Vertical that have some pretty cool

products. We've got one in our office growing some lettuce and

some basil in there. But yeah, the phone applications has been

kind of the coolest portion for me. It's nice to see it really

coming together and it really working instead of the first iterations where they were

kind of just figuring it out. Is there anything that

you hadn't mentioned in terms of technologies that has you excited that you've

seen, even if it's some of it could be, I'm sure, cutting edge or bleeding

edge right now? Yeah, we're seeing more automation.

Definitely some of the larger scale partners, like you said, we had to

reach out to some larger scale partners to satisfy some of these

larger-scale projects, and those come with quite a degree

of automation. It's pretty exciting and cool to see

some of these farms at scale and what they're capable of producing because of that

level of automation, where you're doing most of the hands-on

portion, either planting or harvesting, but the rest is kind of done for you. Yeah,

there's some really cool containerized solutions, and we've seen a

push too for containers being put indoors, but I can't think of anything

off the top of my head right now. But there has been some really cool

things on the mega farming scale. How would you define a

mega farm? Maybe something over 25,000 square feet of growing space.

Okay. And are you seeing more of those now than

when we last chatted? Yeah, absolutely. I mean, I thought that

projects like that would be kind of a one-off for us, and it seems like

that's kind of becoming our bread and butter. We have all of these larger

conglomerates reaching out to us and asking for advice. They know that this is the

next step for them and they're not sure where to start. And so the education

that we offer is exactly what they need to move forward on a project.

And now that we've been able to secure these partnerships with these big players, it

just makes our lives easier and makes theirs easier. So exciting to

see where that goes. How much of the conversations when these

conglomerates come into the space is about you educating them on

what the space is and what the potential is, or do they have preconceived notions

where you have Do you have to sort of manage expectations for them? It's

been a mix of both. Some of these companies you can tell have done their

homework a little bit more and they're ready to dive in and they already have

some idea of where they want to end up or who they'd like to work

with and they're just kind of looking for confirmation that what they believe to

be true is the way they should be thinking. And then we've had

the other ones where they just kind of hop in and say, hey,

everyone's making waves in this industry. I

need I need to know what I'm missing here. And so, those conversations are

pretty fun because we get to kind of mold them from the beginning

and really show them the power that indoor farming has. But yeah,

it's exciting regardless of the project. Are some of them

surprised by what the potential is when they come into the

conversation and after being educated from you guys, like, seeing what the potential

is? Yeah, we get clients all the time who are shocked at the level of

automation that can be achieved in some of these farms. I think they just kind

of assumed it's about of racks growing lettuce inside of a gigantic building. But when

they see the lights turning themselves on and off and the dosing and robotic

arms cleaning and moving plants and harvesting,

I think they— a lot of people haven't realized the level of commitment that some

of these companies are going through to really push this forward to ensure the future

of the food chain. Are they looking to

really make a name for themselves in the space, or are they happy to partner

with folks that have had success and maybe something along the lines of a

white label, or what type What type of mix are you seeing? Yeah, we're seeing

a bit of everything when it comes to that. Different companies have different end goals

here. Some are looking to shorten their chain

from food to fork. We're seeing a lot of grocery store

chains that want to have their own kind of white-labeled products. Most of

them, luckily for us, are not willing or wanting to operate

their own farms. They're just looking to, you know,

understand why this would make more sense for them and how this would get them

a better bottom line with healthier, safer produce that could be

labeled under their umbrella, which is obviously a big factor for them.

And that's kind of the majority of what we've been seeing. Everyone

wants to have their own kind of solution and not have to rely

on a third party or fourth party to ensure that their lettuce

or basil is getting to their store. They're dealing with such astronomical numbers,

and some of these are importing from so far away. It's been such a

problem pre-COVID, and And I think COVID just shed some light on

how poor the supply chain really is, especially in terms of food and how

fragile it is because of how short the shelf life of produce

is. And so this is a problem that they've realized

needs to be addressed now. And they're thinking, instead of having somebody else do it,

how can we do it? Do you see that after

those conversations and the light goes off in their

head, like they get excited at the potential for what's

available, but also coming out with different ideas than they had when they

started the conversation with you? Most of them, yeah. So

it's a little tricky to say because we have so many different active projects.

But yeah, most people when they want to dip their toe and they're

just kind of wondering what can be grown and what is the scale, I think

people don't realize that we are really

capable of going to scale now and the industry is progressing so much

faster than most others. The technology and the money that's being put

behind all of these ideas is out of this world.

You really have to see some of these farms and see some of these technologies

to believe it. And so, once we can show them that, it's

really opened their eyes to what they're capable of

accomplishing, especially with the budget of some of these larger companies that are already

dominating the market for fruits and vegetables. And I

think it's just kind of a no-brainer for them to slowly pivot into a mix

of traditional ag and indoor ag for their products. Given the

pace at how everything is moving and the fact that you have a front row

seat to, you know, a lot of these big, big projects

starting, if you had to sort of pull out a crystal ball and

we're having this conversation like a year from now, like, how do you see the

space evolving? Yeah, it's hard to say the shelf life.

I mean, the projects that we're seeing right now, the sales cycle is

pretty lengthy. Obviously, if you're trying to execute a $100 million project,

that's not a 3-week scenario. So we're seeing somewhere

between 6 and 18 months for the majority of these projects and then even longer

for some of them. 18 months could mean a project is executed on paper, but

then a building still has to be built and the technology

manufactured and shipped and ordered and then turned on and we have to show them

how it works before they really get any traction there.

So we could be looking at 24+ months before some of these larger

projects hit the ground. So it's exciting to see what that'll

turn out to be. But yeah, I think we're going to

be seeing a lot more press releases and a lot more splashes from

some of these larger companies who are diving headfirst into

vertical farming. If you had to guide them on

things to look out for or to be concerned with or things they

should have on their radar, because as we all know, a lot can change in

24 months, just look at the past 24. Do

you think about those things or do you prepare for those things or

can you? Yeah, so we prepare as best we can. I mean, the

number one thing for vertical farming, I think, is still you

just have to have your offtake agreements. You can't be purchasing a farm that

grows hundreds or thousands of pounds of produce without having some plan to

offload those. I mean, obviously the shelf life of produce grown in an indoor

farm, it travels a lot less, so it will last a lot longer. but if

you don't have a plan to get rid of your lettuce somewhere, it's not going

to be a great scenario for you. So, we really preach to

have that done, you know, tell your story properly so that you're able to command

the price that you're looking for. And for some of these

larger-scale players, they have the luxury of purchasing their own produce

because they own a grocery store chain or what have you. Yeah, other than that,

we just really preach proper operations. You have to have the right team in

place to make sure that if you have any issues with your system, you know

how to address them right away. which is what we're looking to really solve with

this farming as a service. And

yeah, those are the 2 biggest keys, I believe.

And how do you think Cultivated's role in this is changing and

evolving? And how do you think about like the mix of

specialties and experts that you

start to need in order to grow at this scale? Yeah, we definitely

did not anticipate we would need so many experts so quickly.

Luckily, we have been in the space for a while, and so we've been able

to lean on some of the resources that we thought we could

wait a little bit longer to lean on, but we know quite a few people.

We do know a lot of operators, and the nice thing is that with this

space booming the way it is, there are so many people who want to become

an operator and who want to become knowledgeable in this space to operate

farms, and they see the opportunity that that brings them. And so, it's

not been hard for us to find candidates willing to go and

operate these farms. It's just looking towards the

future of how do we train them properly to ensure that

whoever goes to this location is capable of operating the farms

that we're sending them to. So for the time being, we've got a handful

of true experts who have a lot of hands-on experience and some,

you know, education into these farms. So we're sending them

with people who have not been trained or have very little experience, and they will

be trained by the expert, and then the expert will keep moving from

location to location and training these, these new employees who are

looking to get into vertical farming. Do you see that that's

one of the spaces where if that doesn't keep

pace with the growth, the education and the training

and the job pool, like, because to your point, I think you

said there's 100 jobs opening across what we

just talked about, but it feels like there's a big need

for education, a big need for people being trained and well-trained and

qualified in the space. Yeah, so we're actually looking to potentially open up

a hybrid farm that we're going to turn into kind of a vertical farming university,

hopefully this year. That's kind of an ambitious plan that we have with everything else

that we have on our plate, but something that we've been discussing for a little

bit here. I think you're going to see more of that in the near

future. It's definitely something that's needed. There is

no lack of farming jobs that are going to be coming in

2022 and 2023. Hundreds and hundreds, and that's just,

you know, on our side of things. So I can imagine how much all these

other farming companies are gonna need. And so I

think that education component is really huge, and we're looking

at different avenues of addressing that. There are some platforms online where you can get

some education, like Upstart University, that I'm aware of, but

there needs to be something more for people coming into the space so that they

can really dig their teeth in and better understand what they're

So with all the moving parts and the speed of the growth

that Cultivate is experiencing, what keeps

you, you know, motivated to keep going? Like,

why do you— like, the short question is like, why do you do what you

do? But like, what has you so like excited about the space? Because

obviously you have a passion for this and there's so

many innovations happening in the space. But I'm wondering just you personally, like,

when you get up in the morning and you think about like what you have

ahead of you, both in the work for that day, but just as you think

about these long-term plans, these like 1-year, 2-year projects, like, you

know, what goes through your mind? I think the most exciting opportunity is

that we actually have the power to make a dent

in this gigantic issue that the world is facing. It's kind of cool

to have this opportunity where we can really address this. We can

really make a difference. We can help people. We can

grow food in places where food has never been accessible and we can

make a change for the better. Whereas, you know, there's a lot of

other jobs that I've had where I didn't have this feeling. And

the staff I have around me is so great and what we're building

together is, you know, that's what keeps me going.

Everyone has drank the Kool-Aid, so to speak,

and it's really awesome to see the team grow together and,

you know, we're really close-knit. And everyone we bring on

helps so greatly. And yeah, it's just exciting. We get to

travel the world and make it a better place at the same time. So pretty

good on all fronts. Have you found that family and

friends have a better idea of what you do now? Because vertical farming

is like hot and it's a hip thing to be involved in. I

spoke to John Purcell at Unfold, I think last

year, and his daughter was saying like, oh, Dad, you're cool now

because you're into vertical farming. Yeah, the last

year, I'd say the last 12 months or so, people have

really kind of— when I bring it up, they're like, oh wow, I actually have

heard of that. That's really cool. I can't believe that. I've never met somebody who's

doing that. I think that's gonna go away soon too, because more and more

people are hopping into this industry. Kind of feels like the

dot-com bubble right now. Yeah. Where are you sending folks to when

they want to learn more about the industry, or they

want kind of start to dip their toes in the water? So we're developing our

own materials, just brought on a couple people for content writing, a new

director of marketing and social media director. So we're trying to

develop our own materials because we like to tailor that information to make sure that

people are getting the right stuff if they want to dive headfirst. I mean, then

there's Upstart University, Agritecture has some great resources as well,

and then there's some companies like Nelson and Pei that offer some aquaponics

crash courses and stuff. So So a little bit piecemeal

here and there that we're trying to aggregate together, but—

You mentioned architecture. Is Henry in Dubai

permanently? Henry Gordon Smith? Because I keep seeing his posts on social and

he's in Dubai. And I thought he got stuck there in COVID and I think

he's— I don't know if he's there now. I spoke to him last week and

he was in Spain for the holidays and I think he's

going back to the UAE. I'm not— don't quote me on that. But yeah, he

was there while we were there at the conference. He was the keynote speaker. I

believe. Was that— you guys had chatted before? You met in person before? No, that

was actually the first time I chatted with him. Okay. And what conferences

do you have lined up for 2022? We've got about 30 or so

identified already, so quite the circuit. So if

anyone wants to chat, I'll be around.

I'm going to try to make Indoor ICON in Vegas. Perfect. I will definitely be

there. Yeah, yeah, yeah. So really exciting stuff. I'm glad

you came back to get us updated. It seems like

It was moving at a breakneck speed when we chatted last, and it feels like

the pace hasn't let up. And I'm, you know, super excited for what you guys

are doing because I feel like you, you hold a really important role in this

space in terms of education. And, you know, with new

industries like this or growing industries like this, I think there's a, there's a

lot of room for people getting the wrong information or

starting off on the wrong foot. And I think what Cultivated is doing is,

is a really invaluable resource for this industry because I think the

more people have success, the more they can tell these

stories, and for people that are new to the industry, they can see

the potential. Because if people were having, you know, not a good

experience with their first farm, they would tell that story to like their family and

friends, like, oh no, don't do it, I tried it, didn't work out. But I

think so this hand-holding that you're providing, I think is extremely valuable.

Yeah, definitely. We want to see farms operate and then

expand instead of shut down, and then obviously that's going to have a ripple

effect like you said. when they're pitching that to other people in their

network or friends or family. And so everyone who is

entering the industry is being a part of the solution, and so we want to

make sure we're maximizing that. So any ask you have of the

audience? Not specifically, but feel free to reach out to us for

anything you need, whether it's just a question, just want to get your feet wet,

you want to learn some more information, give us a shout. Okay, so we'll

make sure we have links to the, the site Cultivated on the

show notes, and we'll have people keep an eye out there for some

upcoming announcements. I'm sure there's, there's stuff that's pending that's in the works as

well, especially new partnerships and things of that nature. Yeah, absolutely. We'll be announcing

quite a few things in the new year, so stay tuned. Well, I appreciate you

taking the time to come back and share the new news with us, Eric. Perfect.

Thank you. Thanks again to Cultivated for being a fantastic sponsor. If

you're looking into a vertical farm and don't know where to start or which technology

would suit your needs, make sure you reach out to them today. The best part

about it is that their service is free And it's because they work on behalf

of their partners. So head on over to cultivated.com, just leave off

the last E. That's C-U-L-T-I-V-A-T-E-D.com.

Fullcast production and marketing provided by Fullcast. Sign up for a free podcast

brainstorm at fullcast.co/vfp15.

Another reminder, if you're enjoying the show, please leave us a rating and a review

at ratethispodcast.com/vfp. We'll be

sure sure to read those out on future episodes. Until we meet again, here's to

your health. Thanks for listening. To read the full show notes for

this episode, which includes any links mentioned in the episode, as

well as a full show transcription, visit

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