0:01WOMAN: Luminaries talking to the brightest minds in tech.
0:05 MAN: We have always believed that if we built the right technology, we could amplify and enhance and enable human progress. And when I look at what lies ahead, I realize that we’ve really just barely begun.
0:22 WOMAN: Your hosts are Mark Schaefer and Douglas Karr.
0:29 MARK SCHAEFER: Welcome, everyone, to another amazing episode of Luminaries, where we talk to the brightest minds in tech. This is Mark Schaefer with my co-host, the effervescent Douglas Karr, also known as Dougie Baby. How are you doing, Doug?
0:46 DOUGLAS KARR: I’m doing fantastic, Mark.
0:48 MARK SCHAEFER: Doug, you know what is miraculous to me?
0:53 DOUGLAS KARR: What’s that?
0:55 MARK SCHAEFER: Arugula. Think about it. Did you ever see arugula when you were a kid? No. Where did all this stuff come from? Now we go in the stores, and we’ve got arugula. We’ve got all these exotic vegetables. And the people listening to the podcast are thinking, where are you going with this, Schaefer?
1:18 But really, there is a purpose here because we’re going to be talking about technology and vegetables today. We are going to be talking to this amazing, amazing man. David Rosenberg is our guest today. He’s a serial entrepreneur. He is the cofounder and currently leads AeroFarms, a clean technology company that builds and operates advanced vertical farms in urban environments.
1:49 I am just blown away by what AeroFarms is doing. They’ve won the World Technology Award for most impactful environmental company. They were voted the most innovative company at the Future of Agriculture Conference. This is a company, if you can imagine this, that’s growing high-quality, nutritious greens and herbs. Arugula? Who knows. We’ll find out.
2:14 They’re growing this without sunlight, without soil, without pesticides, driven by technology and analytics. It’s so mind-blowing. I don’t know where to begin. So let’s begin at the beginning.
2:29 David, welcome to the show. And could you just tell us how did you get to this place?
2:36 DAVID ROSENBERG: Yeah. Mark, Doug, it’s great to be with you. And if you think thinking about arugula is miraculous, tasting it is that much more miraculous. What’s surprising is that we could take an arugula and amplify qualities that people like.
2:55 So, for example, if you like a peppery arugula, we could grow an arugula in a way to make it peppery. Another example– people like kale because it’s healthy. They don’t like kale because it’s often bitter and rough. And we could stress a kale plant to make it more tender and less bitter. And when I say stress, a way to internalize that is as we grow as people, if when you’re in a growth spurt, if you ate differently, slept differently, exercised differently, you’d be bigger, you’d be smaller. It would impact your biochemistry.
3:34 As funny as it sounds, we grow a plant to get it to eat differently, sleep differently, exercise differently to amplify these qualities. And there is ways to do that. You can change the qualities of a plant genetically or environmentally. And we’re really good at the environmental stressing. So getting a plant to eat differently, getting it to absorb different nutrients, micronutrients, getting it to absorb different spectrum of light, all of these things that leads to the big data problems and curiosities that we’re putting these puzzles together to grow plants and be the most fantastic farmers.
4:09 That all said, that’s obviously– well, maybe not obviously– but that is not what I understood the world to be when I started this journey. So to answer your question, I was a nanotech– I built and led a nanotech company. I founded and led a nanotech company for nine years. And then coming out of that journey, wanted to have a big impact in the world.
4:33 And one of the challenges, the tensions, that struck me was that 70% of our fresh water goes to agriculture. And 70% of our freshwater contamination comes from agriculture. So if one wants to help solve the world’s water problems, look at agriculture. And one of my mentors, a man, Bill McDonough, who cowrote the book Cradle to Cradle– Bill’s an architect. And he educated me on those numbers and the possibilities of fully-controlled agriculture and growing plants where you just give the plants what they want.
5:11 And net net, when we grow as farmers the way we want to grow, we can grow a plant using 95% less water. So again, 70% of the world’s water goes to ag. And when we’re successful, we can grow using 95% less water. It really jumps out at you. You said, wow, like a huge opportunity. And that was some of my passions.
5:33 MARK SCHAEFER: It’s amazing, David. I saw something that blew my mind once about how many gallons of water it takes to create an almond or something like that. It’s like, oh, my gosh. You never realize how much water goes into agriculture.
5:49 DAVID ROSENBERG: Yeah. It really speaks to, like, we have to be smart as humanity about where we grow, how we grow food. Just because we could grow food in, like, the Central Valley in California doesn’t mean we should if it means pumping water from the Colorado River to those areas, if it means 25% of California’s electricity bill goes to pumping that water.
6:12 There are smart ways of doing things. It also opens up a whole nother dialogue around policy and the interactions between policy and commerce where maybe philosophically, we think everyone should have free water, but underappreciating that there’s a cost for that water. And once it has to get moved around, that cost could be amplified. And if we reduce the price of water, commerce isn’t going to solve the problems of water usage. And we want to increase standards of performance and get innovators to solve problems, not hide problems.
6:50 DOUGLAS KARR: Well, that’s a great opening to my question. One of the things that stands out for me is that you seem to be– the only term that I can come up with is activist-capitalist. Is that an accurate way to describe your place in the world?
7:06 DAVID ROSENBERG: Nomenclature aside, I’m a business guy. And I want to use business as a force for good. So in that sense, that might be the right way to word it. But I’m a believer in not make money, and then figure out how to give money, but how can business be a force for good? And as a business leader, more and more in society, society’s looking at business leaders to make sure we’re building businesses being conscientious of societal problems, of environmental problems.
7:37 So these are all stakeholders that need to be part of our thought process as we build business plans. I’m proud that in the World Economic Forum, we just had our annual meeting in Davos, I co-chair the Circular Economy Task Force. By the way, I was very proud to be there behind stage with Michael Dell, as Dell, three years ago, won award for companies leading in a circular economy for big international companies. And congratulations to Dell for the pioneering work that Dell Technologies is performing there.
8:15 It’s those kind of stories that are really inspiring, that are meaningful to share to the broader Davos community and the world business community, that one doesn’t have to just think in a very linear way. But we really need to think more broadly about all of our stakeholders.
8:33 MARK SCHAEFER: So you used this term circular economy. Could you expound on that a little bit more?
8:38 DAVID ROSENBERG: Happy to. It’s basically the idea of, most simply, keeping nutrients– technical nutrients or biological nutrients– in closed loops, in circles. So eliminate the whole concept of waste. And I use the term technological and biological nutrients. Materials either biodegrade into the soil, or they could be upcycled into something else. Downcycled means eventually, there’s less and less of it, or it goes to landfill.
9:11 And you want to keep those cycles separate because when they’re combined, you have these monstrous hybrids, as– back to my mentor, Bill McDonough, would say– that go to landfill. So if you have a wood and a metal combined, the wood would biodegrade. The metal you want to design for disassembly so you could take away that metal, that aluminum, that steel, whatever, and upcycle.
9:32 And here when you think of e-waste and all the chemicals in e-waste, I understand Dell thinks about these issues, thinks about design for disassembly and how those materials can be used in future iterations or how they could be collected. These are all concepts and problems that aren’t necessarily solved day one. But what’s important as business leaders is we paint the vision, we set the hurdles, we track progress. And we move towards that goal of eliminating waste using renewable energy.
10:08 And there’s a whole bunch of ways to look at it that it also incorporates societal benefit. But most simply, it’s eliminating waste. That’s where the term circular came from.
10:19 MARK SCHAEFER: I love that. I love that concept, the circular economy. And speaking of circular, when I was preparing for this episode, I went to your website. And I saw the amazing 360-degree video tour of your operations that you have there. And I’d love to show it to everybody right now. But this is a podcast.
10:43 So can you help our listeners visualize what a vertical urban farming operation looks like. If I were walking through a big city and visited one of your locations, what would I see there?
11:01 DAVID ROSENBERG: You mentioned we grow without sun and soil. So this does not look like a greenhouse. There’s no glass roof. We build these in warehouses. If you go into a modern warehouse, 36-foot-high ceilings, you see a racking system similar to if you think about an Amazon distribution center or some distribution center. And many racks, but instead of boxes, you’d see plants.
11:34 So you’d see these long towers. For us, they’re 80 feet long. And they’re about 5 feet wide. Those dimensions are changing. But you would see plants growing on every tower. The levels are about 3 feet spaced apart. So in a 36-foot high ceiling, we have 12, we’re going on 14 levels of growing. And that’s important because you want to spread out the real estate costs, the lease payment cost, to a lot of product.
12:06 And you would see lights shining giving specific spectrum. The human eye wouldn’t necessarily pick this up, but to the plants, they’re getting specific spectrum that they want to grow the way they want to grow. But you would see tower after tower of these farms. So it’s a tremendous amount of crop density. In fact, if we were growing in the field in New York state, we estimate that we have about 390 times the productivity per square foot acre higher than a field farmer.
12:39 Growing in the Central Valley in Salinas or San Joaquin, that number is more like 130 times because you have more crop cycles. But in either way, it’s tremendous crop productivity. I’ll share some other numbers. We have approximately 22 harvests a year versus three in the field.
12:58 MARK SCHAEFER: Oh, wow.
12:59 DAVID ROSENBERG: And that’s because we’re able to accelerate all different aspects of the growing, whether it’s the germination, which is when a seed opens up, or the growing itself. On average, we grow a plant in 16 days from seed to harvest. And this is not genetic modification. This is just giving the plant what it wants when it wants it. It’s like Popeye, eat your spinach. Here we’re actually growing spinach and feeding it to the people. Ironic, isn’t it?
13:25 MARK SCHAEFER: So David, let me ask you something that’s kind of in my mind. We see this movement from the brick-and-mortar economy to this digital economy. And that means there’s going to be a lot of big box store real estate that’s open. I mean, could we possibly turn this real estate into farming? I’m reading about how we’re going to have all these empty malls. Could that become farming operations?
13:53 DAVID ROSENBERG: That’s a possibility. We do look at what’s the price of real estate. And obviously, if there’s lower demand and higher supply, then the cost of real estate goes down. We also look at the price of electricity. We also look at proximity to where the mouths are to build these farms.
14:15 There are economies of scale in the farming system. We’ve built nine farms so far. We’ve built small ones that are the size of a car, to give your audience a sense of scale. And we’ve built big ones that are 70,000 square feet of warehouse. The economics of a big one make more sense. So there are a few considerations here, obviously. But the short answer is that these go into similar structures. So that would be a possibility of taking some of that empty real estate.
14:49 DOUGLAS KARR: That’s incredible. David, I’m curious, from a timing standpoint, why now? What key intersection between farming and technological advancements has made this both possible and affordable now?
15:04 DAVID ROSENBERG: A few things. First, it’s the cost of a diode and the efficiency of a diode. So we use light-emitting diodes to grow plants. And there’s something called Haitz’s curve, which is similar to Moore’s law, where it talks about the cost of a diode improving. I think it’s by a third every three years.
15:27 So diodes are becoming more cost efficient. And as such, that replaces the light that helps the unit economics work. And what it also enables is– so right now, the economics work for leafy greens. We’ve grown at AeroFarms 300 different varieties, and we’re growing more varieties. The economics work for leafy greens. They’ll work in the future for more and more products.
15:50 And the digital transformation, understanding the data of what’s going on on the farm has really made AeroFarms better farmers. So we’re a tough business to build because on one hand, we’re so far ahead. We think we’re two years ahead of the next vertical farmer. And we have to be a technology company to both create the mechanical systems, mirror the biological systems.
16:19 And it’s the digitization, just understanding how the farm’s operating, that allows us to grow plants. We have to figure out how a plant grows most efficiently, effectively, outside, and mirror those conditions inside or even improve upon. And it’s a tremendous amount of data. We have sensors all over. And this is where we’re working with Dell to try and understand these interactions between the frames, lights, pumps, airflow, CO2, all of that and how it translates to quality, to food safety, to yield, which lowers our cost of goods sold.
16:58 And there are all these ways– like, when you think about what’s going on outside, sometimes crops grow well. Sometimes they don’t. It’s because it was a cloudy day. It was a warm day. It was a hot day. It was a humid day. It was a dry day. The nutrients in the soil were X, Y, and Z. So we have all these levers that we’re simulating inside. We’re collecting that data. And the place we’re going with Dell is a fully-connected farm. We’re working on it now. We’re not there yet. But very excited by the Dell Technologies relationship, pulling in from the different parts of Dell to speed up that journey.
17:37 MARK SCHAEFER: I mean, that’s so exciting because I think we hear a lot about big data. We’ve talked a lot about it on this program. But I think to a lot of people, it’s still not something that’s real. And here we’re hearing you talk about how it’s optimizing technology and optimizing a process in a very tangible way, something that we can hold, something that we can eat.
18:05 Can you give us an example of what you’ve learned through this analysis of big data that provided a real breakthrough in your technology, a real breakthrough in your effectiveness and the productivity of these vertical farms?
18:23 DAVID ROSENBERG: I have to be somewhat opaque here. This is getting to the heart of what makes AeroFarms special is understanding how to grow plants. It’s even less, while there’s a lot of innovation, on where the frames, the lights, and all of that interact. It’s what to give the plants when that I think is the hardest nut to crack and how to create this great-tasting product.
18:49 But to share, so if on average, let’s say there are 20 nutrients and micronutrients that we give different varieties. And we want to play with what’s the absorption rate at the roots of those different varieties, and what are the cause and effects to get a plant to eat differently? Just like if you’re trying to figure out what’s the best diet for a person to eat, and it might change for different people.
19:16 Some people might just digest food differently. And there are small subtleties there that are meaningful. Some people might be allergic to some food or not allergic to another food. It’s those same sort of concepts in plants. And we’re taking all this data. And whether it’s the nutrients, the micronutrients, whether it’s all the colors of the rainbow, and understanding if we changed these assumptions, what’s the outcome? And with fully-controlled agriculture, we could go assumption by assumption to test and understand and optimize, which you can’t do in the field. You can’t tell the sun, hey, just give us a little more blue of that color or red of that color. But that’s exactly what we could do.
20:03 And it’s very exciting. And we could kind of clear out the noise of what else might impact the plants. And that’s a tremendous amount of data. And working with Dell Technologies, it’s also understanding what needs to be stored in the core, what on the edge, what in the cloud. And where does that information go? Because we are talking about terabytes of information. And what’s the sensitivity of the time in which it needs to get to its destination?
20:32 So maybe food safety needs to be there instantaneously. R&D needs to be there pretty quick. Finance– no offense to the finance team, maybe that could wait a day. And how that all interacts and gets to the right place. And there’s information coming from all different parts of the farm. And right now, where we are today, we can see there’s benefit. And we appreciate there’s still a long journey to go to have this fully-connected farm. And when we get there, appreciating getting there faster with Dell Technologies, it’s going to be beautiful. And we’re going to be able to solve more and more problems, create better-quality food at a lower cost.
21:17 DOUGLAS KARR: Well, on target with data and benefits, I read that AeroFarms is committed to harvesting and sharing the data with other organizations to understand that relationship that you’re talking about between biology, environment, and technology to drive better performance. What does that sharing look like? And are you seeing any results from it yet?
21:40 DAVID ROSENBERG: It takes different shapes and sizes, different forms. This is a new industry. We’re the world leader in this industry at AeroFarms. And there are a lot of problems to solve. We appreciate that we’re gonna get there faster with partners.
21:59 So we have relationships with probably six different universities. And they vary in nature. We have relations with ag companies, with companies like Dell Technologies. So there’s a number of different examples. And sometimes part of that figuring it out is sharing some of this data, interpreting the data, and appreciating how that might interact with– again, being purposely vague– something on the plant side.
22:42 And the way we often are able to slice it and dice it is we kind of are seeing the full picture. But there are certain more specific pieces of this puzzle that we could work on with a partner to help solve, where they have value from kind of sharing of that data and understanding some curiosity related to some specific part of how we’re looking at a plant. It could be the root structure.
23:12 So for example, using an aeroponic system– the “aer” in “AeroFarms” is referring to aeroponics– physiologically, we have a fantastic root structure. And that might sound funny to hear. But the roots grow in a certain way in the soil, that we’ve worked hard to mimic this root structure, even optimize it aeroponically. Roots want oxygen. Leaves want carbon dioxide. And we have a very healthy oxygenation of the roots.
23:41 And working with physiologists that specialize in roots, we can share some data, some images. And we’re getting better at imaging parts of the plant. And we can course correct to further optimize that physiology, that root structure.
23:59 MARK SCHAEFER: I noticed in one of the write-ups that I was reviewing to prepare for this episode that you were involved in something with Dell called the Internet of Things Vision Workshop. That just sounds so cool, so futuristic. What was that? What was that experience? And how did that change your business?
24:24 DAVID ROSENBERG: We had people from the Dell Technologies team come and spend time with us at AeroFarms and listen to our vision of the world and talk about what is possible and share some problems with tactically how to get there. And what was exciting is there were some tactical gaps that we didn’t appreciate.
24:54 And the conversation changed in degrees from being close to the problem to then elevating and asking if there’s some course correction on the vision, or some broadening of the vision. And it led to a more exciting vision about a more interconnected farm and this digital transformation to enable these learnings. And now we’ve got to do it. So we’ve sort of mapped it out. And we’re looking forward to these next stages with Dell Technologies of making it all happen.
25:30 DOUGLAS KARR: Wow, this is so much infor– I feel like I’m already talking about the future, and it’s already here. But I am curious, where does it go from here? What’s next? What’s your vision of the future of agriculture? Is there a AeroFarms 2.0, any specific technologies that will help make the next leap?
25:51 DAVID ROSENBERG: For us, we say there are five pieces we need to be great on to build a great company. There is the mechanical side, which is where the plants actually go. And also, that includes automation, seeding, harvesting, cleaning, packaging.
26:09 There’s the environmental side, which is what’s the environment the plants want? There’s the operational side. How do you operate a farm? We have over 250 standard operating processes.
26:20 Then there’s the biological side. What’s the algorithm to optimize the growing? What’s the right seed variety, et cetera. And then it’s the digital side that really connects it all. What’s our sensory system? How often do you need to put the sensors? How often do you need to collect the data? And where does the data go, and where do we need that machine learning to interpret the data? Another area we’re going to be working on with Dell.
26:50 All of that is going to continually drop capex, allow us to make the course corrections to drop our capital costs, to drop our operating costs, to improve quality. We’re on what we call model four. We have a team which is, like, our fourth iteration of what the farm looks like in our ninth farm. We have a team working on model five and model six.
27:10 And there are some step changes, a bunch of incremental changes. And ultimately for the customer, they’re going to have better product at a lower cost and more varieties that are grown right in their backyard. The trend towards fresh is a trend, not a fad. People appreciate the benefits of having fresh food. It’s healthier food. It tastes better.
27:32 And vertical farming isn’t going to solve the world’s problems or the world’s agricultural problems. But it’s illustrative of how technology can solve or alleviate some of the tensions, how we can– back to a circular economy– how we can do more with less.
27:50 MARK SCHAEFER: Well, David, thank you so much for this work that you’re doing and the insights that you’ve shared with us today. If people want to follow along, and if they want to learn more about your work, where should they go?
28:05 DAVID ROSENBERG: Well, for one, we’re hiring a bunch. We’re 120 people in the company. We’ll probably hire another 20 or 30 this year. And so we’re always attracting great people at aerofarms.com. People can buy our product. We sell through a number of retailers on a label called Dream Greens. And there’s a lot of information on our website, aerofarms.com.
28:34 MARK SCHAEFER: Well, thanks so much. This has been an absolutely amazing and inspiring show. And thanks to all of you for listening. We’ve only been on the air for about a year. And Luminaries has already reached the top 1% of all business podcast on iTunes.
28:52 Unfortunately, we’re out of time on this show. So thank you so much for listening. And until next time, this is Mark Schaefer and Douglas Karr. And we’ll see you on the next episode of Luminaries.
29:07 Luminaries, talking to the brightest minds in tech, a podcast series from Dell Technologies.
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