This month, as we celebrate the graduation of our fourth cohort from our accelerator program, we are excited to share the stories of the fabulous founders and how their social enterprises are changing the food system for the better. From Indian snack foods to solar-powered greenhouses, these companies are now a part of our good food community.
PowerGrow is focused on bringing a wave of clean-energy-powered greenhouses to farmers around the country, primarily cited near major metropolitan hubs. CEO Sean Lyle acknowledges the value of outdoor farming, but sees a huge potential in farmers moving indoors. The crux of PowerGrow’s modular greenhouse systems is in the level of control they provide for farmers—without the variability of weather, farmers can ensure quality produce, as well as provide more speciality crops year-round. “We mitigate [farmers’] greatest risk—the weather—by migrating them into completely controlled indoor growing environments,” says Lyle, “On average, our farmers earn 2 to 3 times greater profit per type of produce than a standard outdoor grow operation.” What makes PowerGrow systems so profitable? Farmers who can offer consistent speciality products, like basil and arugula, can compete in the marketplace and guarantee their product’s availability and quality. They can also more often sell directly to local and urban retail markets.
Of course, all of these are oft-cited benefits of indoor agriculture, but indoor ag typically comes with the burden of high energy usage and massive upfront costs, making it problematic on both the sustainability side of the equation as well as on the economic side. PowerGrow’s systems are energy intensive, but they are powered entirely with renewable energy (solar power, bio-gas and hydroponics). PowerGrow also provides all of the capital for farmers to build their modular growing system, alleviating the traditional financial pressures for farmers to make the switch to indoor agriculture. Debt and equity partners provide the entire capital stack, preserving farmers’ credit facilities and allowing them to focus their capital for core farming operations and investments in scaling their farms. Lyle, who was born on a farm in South Dakota, knows the challenges to family farming: “To be a business person, a marketing person, a food safety expert—it’s a lot to handle. Being a farmer is tough. Then trying to make decisions about why type of greenhouse to build? What technology do I use? That’s where we come in. We use both AgTech and FinTech to take out the guesswork for farmers.” PowerGrow partners with greenhouse designers and renewable technology experts, as well as financial partners, to reduce the barriers for farmers to build and design a profitable, and sustainable, indoor growing system.
The folks at Harvest Returns are also looking to revolutionize how farms are funded and how they become profitable in the long run. In almost every aspect of agriculture, there have been substantial innovations of some kind—from the tools and tractors used for harvest, to plant-tech for increasing yields and quality, to the above-mentioned innovations in greenhouse designs. One area which has seen notorious little advancement is that of agricultural finance. Most farmers still navigate tedious, dated bank loans and convoluted government agriculture subsidies. Furthermore, much of the agriculture finance system is optimized to support staple crops, and banks simply don’t have the wherewithal to support farmers growing other more niche crops. Investors, however, do. And they see an opportunity for a reliable investment—we will always need to grow food and to feed ourselves. CEO Chris Rawley points out that in the long term, “investments in U.S. farmland have outpaced the S&P 500 and other indices. A growing population and consumer demand for protein make [farms] a compelling opportunity.” Through their online crowdfunding platform, Harvest Return makes the connection between a farm and potential investors. The platform is especially useful for those that are seeking an in-depth relationship with their investments, as it provides them not only with detailed information about the farm, but also with a direct connection to the people growing and producing their food. “It’s a natural evolution of our current interest in where our food comes from,” Rawley says. A sustained cultural interest in food and its source will translate into more and more people looking to put their dollars to work in the food system.
Our third new cohort member, ToMarket, is also thinking about better technology for farmers, and has built a digital marketplace to update how farmers can communicate with chefs. Founder David Moosman worked in restaurant kitchens around the world, and saw the same problem everywhere: inefficiencies in how farmers get information out about what they’re growing, and in how chefs connect with them and buy it. Moosman speaks to how his platform can help reduce what essentially ends up being a gap in technology: “Farmers and chefs are speaking different languages. The farmers (and distributors) are speaking a language from about 30 years ago, often still calling up folks individually to tell them what’s available. Chefs, on the other hand, are in a mobile, millennial generation, and are used to getting what they need in a completely different way, usually from an app on their phone.” What ToMarket’s platform aims to do is to translate the farmer’s inventory into a language that speaks to the needs of chefs (or other potential buyers down the road, like institutions or schools). A simple interface with intuitive tools makes it fairly straightforward for a farmer to post their available produce, and a user to “friend” them and set up an order. It uses the taxonomy of digital platforms, already used to sell to a younger generation, to leverage the need of farmers to move their perishable product quickly and efficiently. “Time is of the essence,” Moosman says. “In Colorado, farms are throwing hundreds of thousands of pounds of peaches into the river every year because it was easier than trying to find a buyer. And that's unacceptable.” ToMarket hopes to alleviate that kind of waste by providing more buyers for available food. For farmers who end up with a huge amount of hyper-perishable items, like peaches or spinach or lamb’s quarter, they can find people that want to make pies or shrubs or pesto. Furthermore, they can provide farmers with better data on what’s in demand, helping them increase profits. In the future, ToMarket may also be able to connect seed purveyors to farmers, hop-growers to brewers, and other producers across the food system.
Sasya foods is at the other end of the food chain, with an Indian snack foods concept that’s currently on shelves in the DC Area and available online for ordering nationally. Hidden in the unassuming idea of snack foods is a striking new attempt to create more culinary awareness around Indian food, and at the same time, provide genuine, healthy snack food options to consumers. Founder Krishna Matturi (a snacker himself) recognized that the challenges to eating well in the U.S. are notoriously stubborn, and habits like snacking are entrenched in American eating culture. So-called healthy snacks, marketed as either functional, diet-specific, or somehow marginally more healthy than traditional chips, have stuffed supermarket shelves in the past five years, projected to reach $32 billion in market share by 2025. Matturi is interesting in providing an alternative to “diet” snacks, which can be didactic in their branding as low fat or low calorie. He saw a huge opportunity in snack foods from his native home of India, where food is often healthy simply by design. “Our products are made exactly the same way they are made in villages in India,” Matturi explains. “So they are extremely healthy and nutritious (and flavorful!). Our foods are made with only non-GMO and gluten-free ingredients, as well as no sugars, no color additives, or preservatives.”
Beyond the embedded health benefits in Indian snack foods, there is also an opportunity for Sasya to bring a wider awareness of what Indian food is for American consumers. The availability of Indian flavors in the U.S. is a sliver of the comparatively huge diversity of cuisine in India. Matturi hopes Sasya will open Americans up to the real potential of Indian food culture and to the diversity of how India eats and cooks. Broadly, Matturi believes that the separation between food and health that happened in the past century in America will ultimately have a reckoning, and the future of food products here could look more similar to the marriage of food and health present in Indian cuisine. He sees Sasya as part of a fundamental shift in how food companies in the States can authentically incorporate healthful ingredients into food products. “I really believe we’re creating an entirely new category of snacks in the United States,” Matturi says.