No better time than now

Features - Cover Story

Kalera, one of 2020’s biggest headline makers in vertical farming, has even bigger plans for its still-under-construction nationwide network, and there’s nothing that can slow it down.

Kalera, based in Orlando, Florida, is taking the local indoor farming concept and stretching it from coast to coast during a nationwide pandemic. This all while turning out flavor and nutrient-packed and conventional crop price-competitive lettuce and leafy greens in a zero-pesticide, 95% less water-requiring closed loop automated production system.

The highly automated vertical grower (with the slogan The Science of Great Greens) operates three indoor vertical farms, two of which are situated near its corporate headquarters in Central Florida.

The operation’s third vertical farm, located in Forest Park, Georgia, recently completed its inaugural lettuce harvest. This farm is one of the largest indoor farms in the U.S. Southeast at 77,000 square feet and is reportedly capable of churning out 10 million heads of lettuce to local Atlantans and food service distributors annually. Heads of lettuce pulled out of the new Atlanta facility have already made their way to local operators like Publix, Sysco and Fresh Point.

With the first harvest in Atlanta now under its belt, the nationwide farm network rollout rolls on into the summer.

The latest scoop: Kalera is pursuing a whirlwind agenda for the home stretch of 2021 and into the next year, opening new, modular farms in places like St. Paul, Houston, Denver, Columbus, Seattle and Hawaii. There, the company says the farm will be the island’s first operable commercial indoor farm when launched.

The new farm building campaign is not the only big news with Kalera. The group recently made waves by acquiring Vindara, an up-and-coming disruptor in the plant breeding world. The operation says it leverages machine learning and AI alongside traditional breeding techniques to drastically shorten the development window of new seed varieties and traits bred specifically for indoor vertical farming.

Leading and innovating

While the Kalera name is fairly new, the group is not some fly-by-night operator that just sprang up in a retrofitted warehouse one day. CEO Daniel Malechuk says the group worked for 10 years “behind the scenes in stealth mode” to develop the coast-to-coast indoor farm network concept.

“For the first time ever, an indoor farming company can offer you something from Hawaii to Seattle to Florida, and everywhere in between — which is exactly what the food service companies want — and it’s a consistent, quality product,” he says. “We’re bringing scale and unit economics and high yields unseen to this point in the vertical farming world, a couple years ago people laughed at this concept, but clearly this is no longer a pipe dream.”

Malechuk has been with Kalera for just about a year now, having spent the bulk of his career in supply chain and retail purchasing across the food industry. The former VP of supply chain for Mastronardi Produce has a firm grasp on what consumers want from an indoor produce company, and how to make that a reality in today’s world of segmented supply chains and COVID-closed borders.

“I have a lot to learn [about vertical farming] and I still do, and honestly that is what is most exciting for me — solving some of these challenges of ‘this is how we do it now, but can we do it this way’,” he says. “Can this be done at scale and with profitability? Those are the burning questions in this industry right now, and at Kalera we are answering those questions in a big way.”

Answering those questions by staying focused on providing a phenomenal produce product at a reasonable price is what sets Kalera apart in a crowded segment, according to Malechuk. “[Growing] something people can afford and not have to splurge to purchase this premium product, that is really what drives. Of course, our robotics and advanced technology is part of that focus, too, but our customer and what they care about — quality grown and sustainably produced, and at what price — that’s what gets us out of bed every morning.”

Kalera's closed-loop growing system produces crops with 95% less water used than field growing, according to the company.

Building out during a shutdown

Austin Martin is Kalera’s chief operating officer, based at the group’s first farm outside Orlando. The former big-box retail logistics professional oversees all of the far-reaching tentacles of the Kalera nationwide expansion strategy, managing the various farm buildouts as well as many aspects of the farm operations themselves.

“For those that were willing to work really hard and push the envelope to make things happen, [COVID] was actually a great opportunity for us to focus and get ahead,” Martin says when asked what it has been like managing such an ambitious rollout throughout the pandemic.

COVID did in fact alter Kalera’s go-to-market slightly. Initially, management was keenly focused on the food service retail segment as its primary customer. Then COVID hit and the bars, restaurants and local distribution networks that serve them practically grounded to a halt. Martin and his team had to quickly pivot to consumer-facing food retail to ensure a mixed-channel distribution strategy which the company will stick with once normalcy returns.

“These food retailers want to partner with a more sophisticated provider who can guarantee continuity in supply across a wide geography, yet still maintain that same level of focus on food safety,” Martin says. “They deal with a lot of regional growers and that’s really just because they don’t have another choice. They want the redundancy that a larger-scale operation can provide.”

The indoor farm's acquisition of a vertical farming genetics startup allows for customized hybrids brimming with nutrients, taste and texture.

Seed acquisition

While Kalera’s scale and approach to vertical farming are attention-worthy attributes, what put the operation over the top was the acquisition of indoor seed genetics provider Vindara. It’s not every day that a farm can buy the company and infrastructure that provides arguably the most crucial link in the production chain.

The collaboration was born out of both familiarity and need: both companies have close ties to North Carolina State University’s ag programs — Malechuck is an alumnus — and Kalera’s leadership had realized a glaring need for genetics tailored specifically to indoor production systems.

Add Vindara president and co-founder Jade Stinson to the list of Kalera-connected executives with an interesting background. Stinson has worked in agriculture for decades, having helped with uncovering the link between mad cow disease and humans in the United Kingdom before joining BASF after college.

Vindara was founded in 2018 on the back of Stinson’s vision of becoming the premier provider of elite genetics for the vertical farming space. The fact that they figured out how to accelerate the seed trait breeding cycle from a ten-year lead time down to 18 months, while maintaining and even offering customizable yield and flavor profiles, simply cannot be oversold.

We're bringing scale and unit economics and high yields unseen to this point in vertical farming ..."

“Say we develop a new indoor lettuce seed variety today with higher yield. Ok, that’s great, but that can’t be it,” Stinson says. “LED lighting technology will evolve, there’ll be more automation and more hands-off growing style, different plant architectures. This industry is moving too fast for traditional breeding to keep up, and when you can leverage deep machine learning and analytics, you can really dive into the genetics and really start leveraging genetic diversity.”

What today’s vertical farming space requires is what Stinson calls a “systems approach” to breeding. “It’s not a one seed fits all approach. The production systems from grower to grower are so disparate, one seed in one system won’t move the needle,” she adds.

The partners share a focus on democratizing their own corners of the ag universe. Vindara is wholly-owned by Kalera, yet operates autonomously and will continue serving genetics to the entire CEA industry. Kalera wants more access to fresh, nutritious and affordable food, and Vindara wants the same for the breeding innovations side of the coin, too.

“Let’s democratize and have growers be able to call us up and say ,‘Ok I want a lettuce with dark purple color, high yield and nutrition, and it has to stay crispy in transport,” she envisions. “The Kalera vision is why should just the top 5% of the world population have access to the most nutritious food? And that’s what we believe in, too.”

Automation and technology

Having launched its first facility located at Orlando, Florida’s Marriott World Center convention area (which has a a commercial irrigation and climate control system) Kalera’s chief technology officer and co-founder knew the operation required more precision and customization.

“Development and implementation of our automated HyCube growing system has been a tremendous advantage for our production cycles,” says Cris Toma, co-founder and chief science officer. “It’s something we started to develop a couple years ago because those off-the-shelf systems didn’t meet the requirements of our vertical farming operation and it was too difficult to extract the data.”

Today, the system is a cloud-based, mobile-optimized ecosystem of sensors and controllers and irrigation modules that are in constant interaction with the group’s closed-loop production systems.

By developing and launching its own system, the operation has cultivated a unique approach to technology via its experiences thus far.

“We like to say that we are farmers who use technology, rather than being a technology provider looking for an application in farming,” Toma says. “And that’s coming from somebody like myself with a machine learning and digital imaging processing background.

By establishing indoor farms from coast to coast (and beyond) Kalera can offer its customers a consistent product from California to Maine.

“We do not make these statements because we do not understand technology, or have trepidation in dealing with it, rather it’s been my entire professional life,” he continues. “Yet, at the same time we need to be very careful that we don’t destroy the ROI and economic performance of each project with how we integrate technology.”

Once Kalera’s farm network is built and fully operational, the built-in-advantage provided by all that aggregated production data will be a massive enablement piece for the head growers at each facility.

“We’ll create a digital data warehouse and implement big data analytics and algorithms, and those activities will drive our sensors with computer visions and AI for tracking plant health and development across all facilities,” Toma says.

While that data is important to what Kalera plans to do in 2021 and beyond, it will still rely on the tried-and-true head grower structure.

“The AI is not quite there yet for full automation, but the trend is there and will only continue to grow. And yet we still need a human in the loop for certain tasks, for the more complex tasks you still need the expert in there monitoring and making adjustments, and then you hope to build on the expert with data and analytics,” Toma says.

Bottom line

Kalera isn’t settling down anytime soon.

“I envision our expansion plans are going to continue, and we are also looking at international expansion in the years ahead,” Toma replies when asked what’s next for the operation. “We’ve got a deep pipeline of opportunities to capitalize on.”

For the CEO, it’s all about continuous improvement and never growing complacent.

“We never want to be flat organizationally, we are constantly striving to get better, learn, refine, and innovate within our business model,” Toma says. “And, if it adds value to our customers, then we’re going to do it.”