IFPA Takes on Tech

Vonnie Estes, PMA:
Welcome to PMA Takes On Tech, the podcast that explores the problems, solutions, people, and ideas that are shaping the future of the produce industry. I'm your host, Vonnie Estes, vice-president of Technology for the Produce Marketing Association, and I've spent years in the ag tech sector. So I can attest, it's hard to navigate this ever-changing world in developing and adopting new solutions to industry problems.

Vonnie Estes, PMA:
Thanks for joining us and for allowing us to serve as your guide to the new world of produce and technology. My goal of the podcast is to outline a problem in the produce industry and then discuss several possible solutions that can be deployed today.

Vonnie Estes, PMA:
This last season of 2021 will be focused on controlled environment ag, and as sponsored by one of the leaders in the industry, Plenty. Plenty as an indoor vertical farming company that uses less space and fewer resources to grow flavorful, healthy, fresh, and clean produce, year-round. Plenty's mission is to improve the lives of plant, people, and our planet

Vonnie Estes, PMA:
Regulars of the podcast know I love talking to Nate story, CSO and co-founder of Plenty. We have had several conversations in the past episode, 23 with Scott Komar on Plenty's relationship with Driscoll's, and episode 30 on food safety. I wanted him to kick off this season to give a good snapshot of vertical farming now. Whether you are a practitioner or know nothing about vertical farming, you will learn something from our discussion.

Vonnie Estes, PMA:
We cover the advantages and challenges of indoor farming. We talk about the origin of Plenty's proprietary towers and intelligent platform that allow it to grow multiple crops with consistent flavors and yield near the. Near the end of the conversation, I ask Nate about breeding, one of my favorite topics, for indoor farms. I challenge any breeding companies to get back to me with a different point of view. I'll do an episode on it if we get some feedback. Let's drop into my conversation with Nate.

Vonnie Estes, PMA:
This episode is the start of my season on a controlled environment ag. So for those who might not be familiar, can you explain a little bit what CEA, is and what Plenty does, and a little bit about yourself, Nate?

Nate Storey:
Yeah. So CEA is Controlled Environment Ag. And historically, this has been mostly in reference to greenhouses. So greenhouses basically took field conditions and said, hey, how do we control more control, more control, more? And you end up in these buildings where they're much more controlled than the field. A lot of time they're growing things like tomatoes, tropical fruit in the Netherlands places. Definitely not the tropics.

Nate Storey:
And in the last couple of decades, we've really kind of taken this idea of control a little bit further, right? So greenhouses are mature industry. This is like the mature CA industry. And what's happened is the indoor farmers have kind of come along and have built upon the CA concept and said, what happens when we have more and more and more control over the environment? Well, the outcome is you get more and more and more yield. You get more and more and more quality. So today, CEA kind of encompasses both greenhouses and indoor farming, but my world is almost entirely indoor farming.

Vonnie Estes, PMA:
Hmm. Interesting. So who is Plenty, and how long has the company been around, and what do you all do?

Nate Storey:
Yeah. So Plenty is an indoor farming company. So we grow entirely under artificial light. So the greenhouse, they get some natural light and then they've got a lot of supplementary kind of artificial light. We grow entirely under artificial light. So we control the intensity of the spectrum, all of the conditions in the farm. And the one kind of unique thing about Plenty is we have a pretty unique architecture.

Nate Storey:
So we've gone out and we've taken the stacked beds or these horizontal flat surfaces of the greenhouse. We've flipped them on their side, put them back to back, and increased the amount of growing space that we can pack into a square meter of floor plan. So we've kind of gone out and figured out how to condense all of this production into a teeny tiny space, control that space really, really closely, and to produce an incredible amount of products out of a relatively small volume.

Vonnie Estes, PMA:
Yeah. We'll talk more about how you grow in a minute, because that's very unique to Plenty as opposed to some of the other companies. But how does Plenty improve food security, safety, and availability?

Nate Storey:
Yeah. I think there's a lot of different lenses to answer that question at a very local or consumer level. Our food today travels very long distances. And it's reliant on things like cold chain, both for supply and for safety, it depends on fields that are under pressure, right? Environmental pressure, smoke, drought, you name it. It's getting harder to grow. It's getting harder and harder to grow every year. And that's not going to change, right?

Nate Storey:
And so at the consumer level we can think about it as a guaranteed supply that you know is safe, it's produced the exact same way at the exact same place, every single time. You may be come up a level from the consumer level to the supplier level and you start to think about, well, what can indoor farming be to a mature industry, right/ A mature industry that's growing at maximum capacity.

Nate Storey:
There's not a whole lot of land left to go out and get and yet demand is growing, right? So how do we grow our agricultural capacity as producers in order to meet the demands of consumers? And how do you do that in a way that's predictable, that's safe, that allows us to scale, right/ Something that has historically kind of hit the limits of scale. And if we zoom out maybe one more level and we say, globally, what does it mean?

Nate Storey:
I think we tend to think about whether a shelf is bear in local supermarket as kind of a local issue, but these are symptoms of a global problem, right? Shipping is disrupted. It's harder and harder to move things reliably around the world. COVID was a great example of that. We're dealing with the post-COVID, stimulus, ramping up demand before supply can match. And we couple that with all the craziness of the environmental pressures on the field globally.

Nate Storey:
And we have a food security issue on our hands. And so we can view CEA or indoor farming [inaudible 00:06:53] global lens of saying, hey, listen, we're kind of a new form of real estate, if you want to think of it that way, we're a new way to grow the global capacity to produce without actually going out and really converting more landover, right? Or finding water, or finding a place that's sheltered from the elements.

Vonnie Estes, PMA:
Yeah. It's fascinating. I was listening to a podcast this morning, really talking about the scope and the hugeness of our supply chain issue and how this whole idea that you and I have kind of grown up in business with just in time where something comes from China and it's ready and you don't have any backup and all the problems we're having our supply chain right now that are going to continue. And so when you think about it, you think about, okay, that comes down to our food. And your suggesting let's just grow this in a whole different way so that it's close by, and people can get it where they are, there's no shipping containers and fewer trucks. And that just makes a lot more sense of having food available to people.

Nate Storey:
Yeah, that's right. I think that the answer, too, is like, where are we going to do it otherwise? Right?

Vonnie Estes, PMA:
Yeah.

Nate Storey:
Where are we going to do it otherwise? All the land that we can use is currently being used for this type of production. And we have to be honest about that. I think everyone in ag kind of knows that folks outside of ag. Folks outside of ag don't understand that, right? They're like, there are fields right next to my house, right? And in upstate New York or whatever. And you're like, yeah, but space does not a profitable field make. Right? And so walking people through the fundamentals of the industry and helping them understand what needs to be true in order to actually grow and make money and have reliable production year on year, that is a very different problem.

Nate Storey:
That's more of like a cultural educational problem, right? People don't understand the threat that the field is under. They don't understand what farmers have to deal with these days. Because they have this very abstract, romantic idea of what production and farming looks like.

Vonnie Estes, PMA:
Yeah. I think that's true. And I think with so many things changing right now with climate change and the water issues that we're having, especially here in California, and so you have to think about the forces on us and then supply chain, like we were saying, that things are changing. The forces on us are different. And so we have to respond in a different way and grow in a different way. And it doesn't mean outdoor growing is going away, but how are we going to make sure that people have the food that they need, when they need it, that's healthy and safe? And so this is an avenue to go down for sure.

Vonnie Estes, PMA:
So you've talked about all the good things about it. Tell us some of the challenges of indoor growing? And as vertical farms become more a part of the food that we eat, there's certainly things that people say like, you use too much energy and there's a lot of complaints about it. What are the challenges and how's the industry coping with solving those problems?

Nate Storey:
Yeah. That's a great question. There are a lot of challenges. It's in mass [inaudible 00:09:58]and industry, right? It's an industry with a lot of technology inputs. And that's both a challenge, as well as an opportunity. On the challenge side, integrating all of these different technology inputs into the business, making it all work together. That's really hard to do. You need a lot of engineers, you need a lot of plant scientists, you need a lot of folks that really know their business, right? To do this integration work. To take that integration and spin it into something even bigger, right? To basically become your own technology cost curve takes even more work. But what's necessary to make this industry go, right?

Nate Storey:
So a lot of folks will look at into our ag and... This is at the heart of the issue, because people look at indoor ag and be like, it's too expensive. Well, not necessarily. You have to know what too expensive means, right. If you're saying it's too expensive in comparison to the field, then yeah, that's a comparison that, without understanding the industry, people look at it and be like, yeah, it makes no sense. I can go buy an acre of land in Salinas for $70,000 or whatever the outrageous per acre price for prime farmland is now. I can go buy that land for $70,000. We're talking like tens of millions of dollars to build the farm.

Nate Storey:
And what people don't realize is what you're buying is a pretty massive amount of capacity. So like if we did an acreage to acreage comparison, we're matching the field in terms of the amount of profit that can be generated per dollar of input. Right?

Nate Storey:
I think the other thing to understand is that technology integration, work really, really hard, but unlocks improvement at a rate that's unprecedented in agriculture, right? So I'm talking about the opportunity, but that comes at a cost, right? That is hard work to do. In Plenty today, we've spent a lot of on that R&D work to build that cost curve. And what it's doing is it's steadily here on your driving costs out of the system at a rate that, if you're a field producer, is unimaginable, right? Because we don't have cost curves in ag. We don't get the pleasure of cost curves. Facebook does, Google does, Tesla does, other tech industries do. But in agriculture, we haven't gotten to enjoy those very often.

Nate Storey:
So what we're doing here is we're building our own cost curves. So that is hard. That is hard work. Getting the markets to understand this, right? Like, we are not a snapshot, we are a trend line as a business. The entire industry is not a snapshot. It is a trend line. And it's like a bunch of naysayers today will say like, well, it's still too expensive. It's still too hard. it's all these things. You're like, well, it was three times as expensive two years ago, and it was twice as hard. And we've cut our costs by 60%, right? And we're going to chop it by another 60% over the next two years, and another 60% over the year... And you can follow that line out and you realize, holy smokes, this goes to a completely different place than where we're at today.

Nate Storey:
So getting the capital markets to understand this, because this is like any other agricultural asset-intensive industry, CapEx intensive one, and getting... I think consumer acceptance has been pretty easy, pretty rosy, people are excited about the idea of clean food. But it's really just kind of waking up the capital markets, helping them understand the problem, and then helping, just culturally, people understand why we have a problem in the first place. Right? And all of that is a challenge.

Vonnie Estes, PMA:
Yeah. I think it's interesting you compare it to ag markets, but ag market... I mean, a lot of the ag markets, you don't have the type of fast change and new technology and driving that cost curve down. That doesn't happen in outdoor growing.

Nate Storey:
That's right.

Vonnie Estes, PMA:
So you're both a food ag company and a tech company, and trying to talk to investors and trying to talk to the market about, we are driving costs out and this is continuous improvement because we're learning more and more, and we're also an ag company. I'm sure that those conversations are kind of confounding sometimes.

Nate Storey:
Yeah. They're hard and food. And ag haven't historically gone together, even a lot of the modern food companies are not really tech companies. Right? So you look at... And they may have some technology element. There may be some genetic technology, right? Some type of modification to produce Herman soybeans or what have you. Right? But they tend to be these linchpin elements of the system of the business. Right?

Nate Storey:
And when you look at like the Plenty tech stack, we have dozens and dozens of patent families across dozens of different technology input areas. Right? And so you just have to walk a very fine line. And it's very hard to balance the very traditional incremental approach to producing safe, healthy food with the go-hand over fist as quickly as you can build, build, build faster, faster, faster. So those are not always complimentary ways of thinking about the world. So that's a tough line to walk and it's a tough tension to manage.

Vonnie Estes, PMA:
The other thing that's interesting about the type of work that you guys do is, because of your control of the environment, you're really able to look at some improvements that are harder to do outside. And so when you look at all the changes that you're making and all the technology that you're using and thinking about, okay, can we use different light to get higher nutrition profiles? And can we use a different way of growing to get better flavor? And so I think you're able... What's coming along with all this is kind of different food, too. I mean, great, highly nutritious, wonderful food, but it's giving people different options which is really exciting as well.

Nate Storey:
That's right. Yeah. We have the opportunity to kick open the doors to new flavors and new experiences that people don't usually get. Right? And I think that that's really exciting. Like we can talk all day about what it looks to just like scale the field endlessly, right? Through indoor ag. And I think that that's exciting, right? From a traditional agronomist viewpoint. Scaling the field endlessly is exciting. It unlocks incredible things that haven't been unlocked for a very long time for humanity. Like you think about going from hunter gatherers to the first agricultural societies. That was a step function leap forward. Right?

Vonnie Estes, PMA:
Mm-hmm (affirmative).

Nate Storey:
Then we think about like the Haber-Bosch process, or kind of Borlaug shuttle breeding, or these different points in time where humanity kind of just jumped forward on the agricultural production scale. Those are very exciting in and of themselves. I do think that we're looking at one of the first times here where we have, not just the opportunity to leap forward on the matter of scale, but also to leap forward in terms of quality, right? And experience, and being able to do some really weird stuff that people wouldn't otherwise get outside of their grandma's garden plot. Right? Outside of these very niche production. If you want to think about it as like a niche production facility, like your garden plot is a niche production facility. You're producing hand-selected cultivars, hand-selected varieties for your personal consumption in ways that a field producer just couldn't do it. It's not possible. Greenhouse grower can't do it.

Nate Storey:
And that results in product that tastes different, people enjoy it very differently, they consume it differently. And I think indoor ag has an opportunity to come along and access some of the joy that comes from those niche production facilities or plots or whatever you want to call them and make it widely available. Right? And I think in an urbanized world, in a world where most people live in cities and they don't get to eat that kind of food very often, that's also a pretty exciting thing.

Vonnie Estes, PMA:
Yeah. So for people who haven't really been inside and thought about how does a vertical farm work, can you take us through at a high-level operationally, kind of from seed to packing in the truck to go to the retail? Does it all happen there or does it...? How are things moving around inside of your production facility?

Nate Storey:
Yeah. I mean, it all happens in the facility. There are no weird processes, right? There are no processes that are unfamiliar to anyone in production. We bring seed in, it's all ordered by lot, and we scan it in, we do checks to see what our vigor is. We check for disease pathogens, that kind of thing. It passes. It goes in. We plant it by a lot. We keep track of each lot, each tray that each lot goes into or-

Vonnie Estes, PMA:
You use robotics for planting?

Nate Storey:
Yeah, we do. The planting's all automated. The Compton Farm is an example. Almost all of the processes automated in Compton. I think that's another interesting thing about indoor ag, right? It is easier to automate some processes than in the field. We've got this big, distributed production environment. Indoors, we can automate things much less expensively. I know that sounds weird, but it's really true, right? You're condensing your automation intensity into a smaller space. So yeah, we-

Vonnie Estes, PMA:
You're also not dealing with a hundred degree days and pouring rain and when and mud for it to get stuck in?

Nate Storey:
That's exactly right. I look at these guys who are building strawberry pickers and I feel so sorry for them. That is a really hard problem to solve.

Vonnie Estes, PMA:
[crosstalk 00:20:00].

Nate Storey:
I've got it easy, right? I have it so easy in comparison to the folks that have to figure it out how to ruggedize this robot to go drive through a field for 24 hours a day, for months on end, picking. That is a really hard problem. And it's just because weird stuff is going to happen, right? Birds are going to land on your machine and poop on it. There's going to be grit blowing into all of your joints constantly. It's sandy. It's wet. You name the worst conditions you can imagine. And it will experience those conditions.

Vonnie Estes, PMA:
Mm-hmm (affirmative).

Nate Storey:
And indoors, we just don't have those issues, right? So it becomes more of a pure robotics problem. Obviously, robotics wedded to great plant science and horticulture and understanding the crop. But it's less of this like, how do I just make my things survive The natural environment? Right? It's already in an artificial environment. It's controlled. It's clean. It's much easier to manage.

Vonnie Estes, PMA:
So back to the process, so-

Nate Storey:
Back to process.

Vonnie Estes, PMA:
... So your plants.

Nate Storey:
Yeah. So the seed, it goes in, we're tracking it the whole way. That's another great thing about indoor life. We know where every lot of seed goes. We know what every trade does over the course of its life. We know what towers that trade goes into. We know what clam shells that tower goes into, right? So we're able to kind of track the plans and measure the performance of the plants over time in ways that are pretty awesome. Give us a lot of interesting insights into the process itself.

Nate Storey:
So we plant our seed. It goes into the germ chambers. It comes out and goes into seedling production. We'll grow out seedlings. And then we take a robot. We pull that plug out and we stick it into tower in these are big vertical two-sided towers. We stand those towers up, hang them on a conveyor line, and they move through a growth space with light, with a perfectly controlled environment, nice, big, wide, open rows.

Nate Storey:
And those towers with those seedlings go in very, very tight, but as they move through the room and as the plants grow, the towers actually spread apart. So we spread those towers apart as the plants grow to make sure they're getting the optimal amount of light, air flow, all of the stuff that keeps photosynthesis and the growth of that plant at the maximum rate.

Nate Storey:
So that's really all it is, right? Moves through the room. Comes out the other end. We grab it with a lay-down robot. We set the tower down and zip it right through a harvester and zip zap. It's through. The tower goes off. Gets cleaned and replanted all in one motion. And all of that product goes off on a conveyor line. It goes through a sorter, and it goes through a cooler, and do packaging. It goes right into clamshells.

Nate Storey:
And so we hold those clamshells, we test all over lots. Right? So it goes into clamshells. And then it's positive release, it goes out onto the trucks and out into the world. So it's really kind of the same process that everyone else has from a plant growth standpoint. if you think about it from the plant's perspective, though, the plants just have the ideal growing day every day of the year, right? So there's not a day where they [crosstalk 00:23:05].

Vonnie Estes, PMA:
They're always having their best day.

Nate Storey:
That's exactly right. So your best growing day, when you see that relative growth rate just leap up on all of your plants in the field, we have the pleasure of that every single day. Right? And we can start to tweak things over time to give it perfect spectrum, perfect light, match the genetics with the environment. And it's amazing what you can get out as a result.

Vonnie Estes, PMA:
Yeah. It's really interesting to hear about that, because it is all the same processes, but the fact that you have them under one roof is, in terms of traceability, and providence, and all the stuff that we're trying to do when we grow outside of knowing where everything is and where it goes and the different fail points that can happen when you're moving things from one point to another. You have so much control because it's all right in one place, right?

Nate Storey:
Yeah. That's a risk and an opportunity, right? I mean, from a process standpoint.

Vonnie Estes, PMA:
Yeah, you could have a total failure, I guess, in there.

Nate Storey:
Yeah. Again, we are intensifying agriculture in a lot of ways, right? You think about it, we're growing plants fast, we're growing more of them in smaller spaces and pushing them through, right? And that's great in a lot of ways. It results in a really healthy plan, a really nutritious plan, a really delicious plant. But it also says, hey, if you really screw something up, if you lose power, if you mess this system up, then you've got a mess on your hands. Right?

Nate Storey:
And so it really forces us to invest in redundant systems and engineering things that are more fail-proof, more resilient. And ultimately I think it takes us to a really great place as an industry, just in terms of controlling production and controlling supply, but it is both an interesting opportunity as well as a risk. Yeah.

Vonnie Estes, PMA:
Yeah. So one of the things you've mentioned, and let's dive into this a little bit more, one of the big differentiators of Plenty are your vertical towers instead of growing in flatbeds, like you see pictures of a lot of the other vertical farms. Explain to us what those are, and what the advantages are, and kind of how you came to that conclusion to grow that way.

Nate Storey:
Yeah. I think the... So the towers represent an architecture, an architectural choice that we've made as a business. And it dates back to my masters and my PhD work. And at the time I was looking at greenhouse production, I was originally interested in working in greenhouse production. The thing that got me started was thinking about our production metrics. So like you measure the productive capacity of the greenhouse on the square meters of productive plane, right? How many meters of growing plane? What's the square footage of your greenhouse, right? That's how you measure productivity, but all of the costs on a volumetric basis, right?

Nate Storey:
So the size of your facility, the amount of covering on that facility, the amount of getting natural gas you burn to heat, the amount of lighting, all of this stuff tends to have a very volumetric way of being costed out. And so I thought, that feels like a weird mismatch, right? And that's what got me into my first research, which was like, how can we use space and volume more effectively in these growing environments? How can we build kind of photon traps, if you will? How can we use more of the light that's coming in and use it more effectively?

Nate Storey:
And that very quickly led to a realization that transitioning to the vertical plane allows us to really increase the amount of productivity within any given space, within any given volume. Right? And so then it kind of led to this experiment of saying, well, what's the best way to organize plants in space? A very fundamentalist kind of view. We just assumed that we do-

Vonnie Estes, PMA:
You have to forget everything, though, to even ask that question, right?

Nate Storey:
You have to forget everything, right? You have to say, how do we organize plants in space? How does nature organize plants in space? Why do plants grow the way plants grow? These are all very simple, fundamental questions that I don't think that many people, even in our ask. But it's all about light interception and management and space use. How can we organize plants in space to be most effective? And what I'd seen was folks were starting to tinker with the indoor production space, but everyone was doing these flat stacked beds.

Vonnie Estes, PMA:
Mm-hmm (affirmative).

Nate Storey:
And I started scratching my head because just thinking about spatial use, right? Like what's the spatial efficiency of this organization of plants and space? And when you did the numbers, you've got To have access aisles. You've got two layers to manage. Think about managing the environment as managing surfaces, right? Airflow past surfaces. Plants need CO2. You need to get rid of the O2, you need to get rid of the humidity, and you need to get rid of the heat, right? And all of these are generated in the process of growing plants doors.

Nate Storey:
So if you start to think about it that way, now you've got to manage surfaces. One surface is productive, meaning you make money on the plants, but you don't make money on non-productive surfaces. So I started to think about these physics problems, if you will, and realized that this is a really inefficient way to do plant organization in space, right? This stocked-bed approach.

Nate Storey:
Now it's not to me say it's bad and it to doesn't work, but very early on, people tended to mistake the ability to grow plants indoors with an actual profitable pathway, right? And what I realized was in order for the industry to go to where it needs to go, which is ultimately to be on price parity with the field, we needed to rethink how we organize plants in space.

Nate Storey:
So that's where that started. And I started playing with towers and then I realized, oh, lighting reception efficiency is a major problem in the industry. Meaning plants have to be spaced to their mature spacing very early on. Meaning most of the photons that you're dumping into the space just land on non-synthetic surfaces, right?. They just bounce off. They turn to heat. They increase your cost. It's a negative feedback.

Vonnie Estes, PMA:
Yeah. Yeah.

Nate Storey:
Right? And so, really, the fundamental premise became, okay, in a stacked-rack system, your productivity is roughly equivalent to LED efficiency improvements year-on-year. Right? That ends up being the fundamental whole rate predictor, I guess, for yield gain in stock systems. But if we can break that dependency, now we can build systems that are productive enough to get us to price parity with the field.

Nate Storey:
And so that was kind of what led to this idea of towers, but towers that spread apart, right? So it is like a lot of the European greenhouse growers do this already. These are the indexing gutter systems you see in Europe. And we basically took that concept, which is a fabulous concept. And some brilliant people back in like the seventies in Finland, in Denmark were pioneering these moving-gutter techniques. And we took that principle and we stood it up, right? And we just said, how do we do moving-gutters vertically? Growing on both sides of the gutter. All of the lights in the center, back to back. Air distribution in the center. And gives us convective cooling. Gives us a lot of airspace to manage, really carefully, our temperature, humidity, VPD, and CO2, and all these other variables.

Nate Storey:
So that's kind of what led us to the vertical tower architecture. But as you can imagine, building a new architecture is expensive and hard. We looked at it really hard and we said, listen, this is something that's way more productive per square meter. Double to triple what a sack producer can grow on square meter of floor plan basis. Right? It unlocks the door to more yield per square meter. So when we're thinking about a square meter of growing plane, unlocks new yields, right? So if you think about the field, the field for lettuce is at six grams per square meter per day. Okay? That's roughly what a field will produce in terms of saleable output, right?

Vonnie Estes, PMA:
Mm-hmm (affirmative).

Nate Storey:
And that's for head lettuce. So it's not a perfect comparison, but it's as close as we can get. You look at a greenhouse and you're at like 75 to 150, depending on how intensive that greenhouse is, how moderate it, how well-managed it is. Like the moving-gutter systems of Europe, incredible systems, incredible people. And they're pushing the limit. They're probably like 150 grams per square meter per day for a baby crop, a smaller crop. You go to the other indoor producers and they tend to be in the 200, maybe 300 grams per square per day. And this is growing plane, again not floor plan, but growing plane. And you look at Plenty and we're over 900.

Vonnie Estes, PMA:
Oh my gosh.

Nate Storey:
So with our baby products, we're over 900 today. And our targets are around two kilograms, right? Two kilograms of field per square meter of growing plane on a daily basis, 24-hour period. And that's saleable biomass. That's not stems, that's not roots, that's not all the other stuff. But that speaks to the fact that this architecture unlocks yield. It also unlocks new crops. So that's the other thing that I looked at in the space, like how do we grow as many different things as possible on the same platform? How do we build a platform as opposed to just building a farm and then happening to build an entirely new kind of farm to grow tomatoes, to grow strawberries, to grow eggplant, to grow peppers, to grow all the other things that we want to grow?

Nate Storey:
So yeah, at the end of the day, this is an expensive, hard thing to do, but it unlocks yield in ways that no one else can touch. Because, again, they have the heat problem, right? Their yield rate is limited by the LED efficiency improvement rate. So we're decoupled from that. That's not our problem. Our problem becomes perfection, perfection, perfection. How do we deliver better and better conditions and match those better conditions with better and better genetics?

Vonnie Estes, PMA:
So how many versions have you done of the tower?

Nate Storey:
Lots of versions of the tower.

Vonnie Estes, PMA:
I would bet.

Nate Storey:
And there will be more versions to come.

Vonnie Estes, PMA:
That's amazing. Yeah, because it's such a different idea. And so you started that when you were in school and you took that into your first company that then became Plenty as well. Is that how that progressed?

Nate Storey:
Yeah, that's right. Took it in my first company and built kind of a farm technology, farm sales business called [Brad Echo Tech 00:33:49], and then folded that into Plenty few years later. Yeah.

Vonnie Estes, PMA:
Wow. That's great. So what crops do you grow now? And what crops are you working on? You're talking about building a platform to be able to grow different things. So where are you now and what are you expanding to?

Nate Storey:
Yeah. Today we're mostly focused on greens and herbs. Right? And I think a lot of folks in the space dove into greens and herbs because they thought, primary growth, super easy, like-

Vonnie Estes, PMA:
Eat everything. Yeah.

Nate Storey:
Yeah. Everyone eats a salad, right? And I think the irony is that as we've gone deeper on it, greens are easier to optimize, but Gs from a process intensity standpoint, greens are maybe the hardest crop you can grow.

Vonnie Estes, PMA:
Huh?

Nate Storey:
And so it's ironic that... We did it, too. Everyone in the industry thought primary production, super efficient growth, LEDs are expensive, light is expensive, this is how we do it. Right? And now years later I'm kind of like, oh man, I wish we'd start it with strawberries or tomatoes.

Vonnie Estes, PMA:
Those greenhouse growers were thinking something good with those tomatoes.

Nate Storey:
Yeah. Yeah. Wisdom, right? Wisdom. So anyways, we're focused on greens and herbs today in terms of our actual commercial production. That being said, we've been breeding tomatoes for a couple years and we've got some insanely productive tomato systems. Think thousands of kilograms per square meter per year of floor plan as opposed to, say 45 for something like cherry tomatoes, two's of magnitude yield gain. One order of magnitude, you've got a great business, two orders of magnitude and it's like, holy smokes, this is going to be game-changing. Strawberries, we've been working on strawberries.

Vonnie Estes, PMA:
Mm-hmm (affirmative).

Nate Storey:
And I think as we look to the future and the future farms, we'll be building farming campuses, right? Where we have greens, tomatoes, strawberries, and then probably a host of additional crops that we bring along. The cool thing about tomatoes, strawberries, and greens is it's kind of, think of it as kind of a book-ending exercise, right. In between greens and in between strawberries, we have almost all of the equipment now integrated into the platform to grow almost any other horticulture crop we want.

Vonnie Estes, PMA:
Oh, right. Yeah, that's true.

Nate Storey:
So almost everything. Those two covered the two far extremes of the spectrum from a production standpoint. And it opens the doors to going very, very fast with new crops after that.

Vonnie Estes, PMA:
What's the criteria that you think about now that you've had the experience with greens and you know it's not as easy as everyone thought? And then strawberries and tomatoes, certainly huge markets for those. And especially getting strawberries and tomatoes year round that taste really good, that's huge. In between there, what's your criteria? How do you think about what you would pick next?

Nate Storey:
There are obviously market considerations, what do people want to eat?

Vonnie Estes, PMA:
Yeah.

Nate Storey:
I think that's a great first layer. We tend to think about that first layer as like the hero crops of the grocery aisle. Right?

Vonnie Estes, PMA:
Yeah. [crosstalk 00:37:14].

Nate Storey:
So the top performers in the grocery aisle, the real draws tend to be the berries, strawberries, blueberry, blackberry, raspberry tend to be right after that tomatoes. And then after that, greens. And in all of those categories, berries already embody it. But in all of those categories, consumers are moving more towards like snackability, convenience, simplicity. Right? So that's always like a good, I think first principle of human behavior, like, where are people going? Let's meet them there.

Nate Storey:
The next way is more on the science side. We say, is this crop appropriate for the system and for the things that we have today, or is it appropriate for the things that we'll have later, tomorrow, next year, 10 years from now? And then where on that timeline does it land? And the easiest way to explain that is, what's the cost of the carbon and the product, right? If we just want to get really fundamental. How much does it cost to fix the carbon? And then how much of that carbon can we sell in the product? What's the value of the carbon that we're selling? Right.

Nate Storey:
So that's kind of the fundamental calculation. But I will say that, I think on the science side, we tend to focus on a few, very fundamental things. Can we achieve the growth with habit that we want? The harvesting, training, pruning, all of the other human management inputs, can we minimize those with breeding or with hardware that's cleverly designed? And then what's the saturation point of this particular crop? How plastic is it? How easy is it to work with? Right? Tomatoes, easy to breed, so easy in comparison to other crops. So why wouldn't we? Right?

Vonnie Estes, PMA:
Yeah.

Nate Storey:
And potential for very high saturation points. Meaning if you think about these things as energy systems, right? The indoor farm is just an energy system. It's like a battery, right? It's like a car. It's like grid. It's like any energy system in the world. You put energy into it, you get energy out of it. A different form of energy. And all you're doing is trying to minimize the amount of inefficiency along the way.

Nate Storey:
So we put X number of kilowatts in, we get X number of kilowatts out. We lost so many to heat, to this, to that along the way. And with these systems, if you think about them that way, then the more energy that you can put in to the same size system, the better, right? It's like it's throughput. It's industrial throughput. Think of it as bottling plant. If you can run your bottling plant twice as fast as the guy next door, you can win.

Vonnie Estes, PMA:
Mm-hmm (affirmative).

Nate Storey:
And that's really what we're focused on. How do we run our bottling plant faster and faster and faster. Going back to that first principle, how do we divorce ourselves from the energy efficiency curve of LEDs? How do we put more light into the space? How do we not worry about heat and humidity and all the negative things that come with it?

Nate Storey:
So yeah, we've just built a really fantastic energy system. And a core component to that energy system is the plant. How do you build a plant that saturates at really high levels, that you can just pump the energy into and get an acceptable amount of energy out of?

Vonnie Estes, PMA:
Given that there's so much you can do with the environment around growing plants in indoor ag, how important is breeding to your programs? I know you've got the program with Driscoll's, and they're excellent in breeding, but in some of these other crops, do you think about breeding and are you doing your own or working with partners? How's that going?

Nate Storey:
Yeah. For most crops, breeding doesn't matter. And unfortunately, in the industry, most folks, especially like the seed companies and the breeders that are going after things, they don't know what doesn't matter yet, because they're not doing the work. Some crops, it does matter. But the other kind of sad thing is, for the crops that it does matter for, it's highly dependent on your system architecture, right?

Nate Storey:
So the kind of tomatoes that I'm growing, someone growing in rafts and a stacked bed system would probably not want to grow. They probably will have to rebuild their system from the ground up with a completely different approach to production. Right? So it kind of means there's a lot of targets out there, trait targets.

Vonnie Estes, PMA:
Mm-hmm (affirmative).

Nate Storey:
So if you're a breeder thinking, I'm going to jump into the indoor space and make a killing, I would say, wait for 10 years.

Vonnie Estes, PMA:
That's probably good advice. Yeah.

Nate Storey:
Because you don't know what matters yet, right? It's like, what are your targets? What are your targets? And no one can tell me what their targets are. So until someone can tell me what their targets are, I think genetics is best left in the hands of the producers themselves. I think there is a really interesting opportunity to reset the value chain dynamics with indoor farming. Meaning, in the field, the farmers get squeezed. That's just all there is to it.

Nate Storey:
I got into this because I got tired of seeing farmers get squeezed. And I think with indoor ag, there's an opportunity for the farmers not to be squeezed. We've got a head start on a lot of the folks that occupy other positions in the value chain. Now, I think there's an opportunity for farmers to own more of that value chain as we look to the future, or minimally to balance the value chain better so that it isn't just one party getting squeezed by parties on either side of them, it ends up being everyone shares the risk equally, right? And we've got a more efficient and more equitable food system from an engagement standpoint. Right?

Nate Storey:
So all of that to say some crops, breeding is really important. But I think for, probably the next decade, those breeding targets are going to be extremely specific to the producer. And I think that that means, ultimately, most of the breeding companies can't afford to play meaningfully for 10 years. Because even some of the fastest growers, there's some great folks in the space doing some incredible work, building a lot of farms really fast, but even the farms that the fastest growers are going to build are going to be a drop in the bucket in comparison to larger industry.

Nate Storey:
So if you think maybe there's an opportunity for a more equitable risk distribution in the value chain, and also it will take a long time for the total market share to be meaningful, that's a little less exciting, I think, for most breeders, at least the way they've done breeding in the past.

Vonnie Estes, PMA:
Well, it's interesting, I think, to your point of just waiting to see how far can environmental input take us. And you're still figuring that out, like just working with light and all the other things that you're working with, you're just still figuring out how far can we push this from the environment. And I think as we move further along and understanding that, and then understanding what the targets are, then there may be a way to work together that gets to traits that are more valuable. But still, I think, as you said, it's going to be more producer-specific because what you need is going to be different than what someone else needs.

Nate Storey:
That's right.

Vonnie Estes, PMA:
Yeah. That's interesting.

Nate Storey:
And to a degree, it becomes marketing intelligence, right? I see some of these companies that are working with breeders and I know some of the terms of those collaboration agreements. And the instate is that grower pays a lot of money to the seed company for seed for the rest of their lives. That's the outcome.

Vonnie Estes, PMA:
Yeah. That's true.

Nate Storey:
It's kind of like, come on, guys, play hard to get here. Don't give away the value of your market intelligence that easily.

Vonnie Estes, PMA:
Yeah, that's true. Hey, one last question. Last time we talked, it's been a while, Compton was just getting going, what's happening with Compton now and where are we in that whole project?

Nate Storey:
Compton's going well. It is a big complex thing to build. And this is our first time building anything this big and complex. So yeah, we're learning a lot. It's coming along. And we'll be excited to be putting food out into the world from that Compton facility next year.

Vonnie Estes, PMA:
That's it for this episode of PMA Takes On Tech. Thanks for allowing us to serve as your guide to the new world of produce and technology. Be sure to check out all our episodes at pma.com and wherever you get your podcast. Please subscribe. And I would love to get any comments or suggestions of what you might want me to take on. For now, stay safe, eat your fruits and vegetables, and we will see you next time.