Cultivate’18 attendees may have seen an indoor vertical farm — and some of the early-stage leafy crops visible on the outside of it — while getting a coffee or walking from the show floor this year. But the farm didn’t officially open until after the event ended. By the time Cultivate’19 rolls around, there’s a chance attendees will be able to tour the farm — which is outfitted with vertical racks and LED lights — and perhaps eat some of the food it produces.

Below, Daniel Palawasta, the general manager of food and beverage at Levy Restaurants, the operator of the Greater Columbus Convention Center’s food service, answers questions about how the farm came to be, how he learned to farm and what the farm is currently growing

Produce Grower: How did the farm become a reality?

Daniel Palawasta: When we came into Columbus, the thought was that we would take the traditional route of putting a garden on the roof. It’s a convention center — there’s plenty of space up there. And very quickly, what I determined is that if I put it on the roof, and I don’t tell anyone about it, nobody knows about it. And the whole value of the program is dependent on folks telling everyone that it’s out there. So, I said ‘What about bringing it inside the building? What can we do to make it more experiential for the everyday guest?’ We were going through a remodel, so I went back to ownership and asked if there was any space on the floor for a garden inside. The initial answer was no, but I continued to do the research anyway. I ended up presenting the Bright AgroTech model to the chairwoman of the board, said I needed 150 to 200 square feet, I want to make it visible to the guests and almost instantly she was onboard.

PG: You don’t have a horticulture background. How did you figure out how to grow in a vertical system?

DP: I’ve been in the food and beverage industry for 30 years now. I’d never grown anything in my life, either at home or professionally. No one on my team was really geared toward that. I spent many hours every day on YouTube, learning and watching videos and taking an interest in how the system works and what to grow and how to grow and when to grow. And I didn’t know anyone in this part of the business, so I had to research. I needed proven technology.

PG: What has grown well in the farm? And what does having local access mean for the business?

DP: Chives are doing well right now. The basil is doing great. Bok choy does well for us. Kale does incredibly well. From a financial standpoint, I can’t grow enough. It’s not scaleable for me when I’m feeding 10,000 people. But what it does do, especially for banquets and galas, is design a menu three or four months out in conjunction with our clients that uses those products in some way — like using basil in a cocktail or using fresh chives as a garnish. That’s where the real value is.

Genetics: The tomato (Lycopersicon esculentum) is one of the most popular crops to grow hydroponically. Those grown in greenhouses and controlled environments have been bred specifically for these environments. The four most popular types of tomato cultivars grown hydroponically are: 1) beefsteak, 2) tomatoes-on-the-vine, 3) cherry or cocktail, and 4) grape. The relationship between yield and sweetness (brix) is inversely related for these cultivars; beefsteak and tomatoes-on-vine have greater yields than cherry and grape tomatoes, but the lower-yielding varieties are sweeter compared to the larger fruits. Many of the tomato cultivars developed for hydroponic greenhouse production also are bred to have resistance to pathogens including bacterial speck, powdery mildew, fusarium and verticillium wilts, leaf mold, root-knot nematodes; and viruses such as tomato mosaic, tomato spotted wilt and tomato yellow leaf curl.

Production systems: As a high-wire vine crop, stone wool or coconut slabs are the most popular system for producing tomatoes (Fig. 2). For both stone wool and coconut coir, different products are available that vary in their capacity to dry down and rewet, which can be used to manipulate substrate moisture and steer crops between vegetative and reproductive (or generative) states. Dutch buckets filled with perlite or lightweight expanded clay aggregate (LECA) are also commonly used for tomato production, though the labor involved with washing the containers between crops limits their use to smaller facilities. Tomatoes can be grown in nutrient-film technique channels, though the larger root systems necessitate larger channels and can impede achieving the target flow rate of nutrient solution. Therefore, NFT systems should be avoided for commercial production.

Propagation and young plant production: Tomato plants are propagated from seed. Seed are initially sown in small propagation cubes (~50 to 200 seedlings per flat). With temperatures between 72 to 75° F, seeds will germinate within a few days. Depending on the time of year, providing supplemental light to avoid unwanted stretch is beneficial. Seedlings should be fertilized with a solution around 1.0 mS/cm after cotyledons have unfolded. Too much fertilizer can result in excessive growth. In addition to seed propagation, transplants may also be propagated vegetatively using grafting. First, seedlings of cultivars to be used as rootstocks and scions (shoots) are grown. Once the second true leaf has unfolded, seedlings are ready to graft. Both rootstocks and scions are cut at a 45-degree angle; rootstocks should be cut below cotyledons, while scions should be cut wherever the stem diameter matches that of the rootstock. After cuts are made, a grafting clip or tube is placed around the rootstock and the scion is placed in the clip that will hold tissue together. Once clips are placed on the grafted plant, they are placed in an environment conducive to healing for four days to one week, then exposed to ~100 µmol·m^–2·s^–1, with high humidity (= 95%) the whole time. Both grafted and non-grafted plants are transplanted into four-inch blocks of rockwool or coconut coir to grow more before transplanting into systems. Both fertilizer concentration and light intensity can increase after transplanting into blocks. Tomato plants are trained in a lean-and-lower system and training can begin during young plant production. Stakes are placed into substrate blocks at a 45-degree angle and the stems of young plants can be trained to these. This introduces an angle to the stem, so when stems are lowered later in production, the stem is not cracked and plant damage is avoided.

Nutrient solution: Once blocks with young tomato plants are transplanted into slabs or Dutch buckets, the strength of the fertilizer solution can be increased again while plants are establishing, and again once plants have established. A nutrient solution around 2.5 mS/cm can be used for mature plants in production, though this will need to be adjusted based on environmental conditions and plant uptake of nutrients. By monitoring the EC of the solution being provided to the crop and the EC of the leachate, you can determine how to adjust fertilizer strength. One important consideration is that as plants transition from flowering to fruit production, the nutrient solution composition should be adjusted in addition to EC. Developing fruits increase the demand for potassium and calcium, so the proportion of these nutrients in the fertilizer should increase as well.

Temperature: Recommended temperatures for producing tomatoes are a 75° F during the day and 65° F at night. Temperatures should not go below 54° F to avoid excessive delays in growth. Similarly, day temperatures should not exceed 86° F, as temperatures above this can cause flowers to abort and decrease yield.

Light: Tomatoes require high light (> 20 mol·m^–2·d^–1) to maximize productivity and there are several ways in which this can be achieved. First, glass is the preferred glazing material for greenhouses used for tomato production since it has the highest light transmission of any material (up to 93% ambient light transmitted). Also, keeping the glazing material clean can help maximize light transmission. Once transmission of ambient light is maximized, the only way to increase light in the greenhouse is to use supplemental lighting. Both high-pressure sodium lights and light-emitting diodes (LEDs) can be used to provide supplemental light to tomatoes, with each technology having distinct benefits and applications. For overhead lighting, HPS lamps may be a better choice than LEDs for tomato production. When used above a tomato crop, the radiant heat from HPS lamps can promote transpiration and, therefore, calcium uptake; ultimately, this can help reduce the incidence of blossom end rot during low-light times of the year. Alternatively, LEDs are most useful for inter-canopy lighting (Fig. 1) and promoting photosynthesis in functional leaves that are simply shaded by other plants; the lack of radiant heat in LED light allows for them to be placed close to plant foliage without burning the foliage of the canopy interior. A combination of overhead HPS and inter-canopy LED lighting can be a successful combination for increasing productivity, though the investment in lights and expense in running them must be offset by increased yield to make it economically viable.

CO₂: Mature tomato plants can consume carbon dioxide (CO₂) very quickly due to the large amount of vegetative growth. This is especially true in the late fall, winter and early spring when ventilation and replenishment of CO2 in the greenhouse from outside air is limited. Therefore, during these times supplemental CO2 should be provided to plants. Maintaining a CO₂ concentration of ~1,000 ppm from liquid injection or burners can enhance growth and, ultimately, yield.

Christopher is an assistant professor of horticulture in the Department of Horticulture at Iowa State University. ccurrey@iastate.edu

Time-pressed, foodie and health-focused consumers are constantly looking for ways to get the produce they want and need, when they want and need it. We see the produce industry — and disruptors — adjusting to, adapting and pushing these trends. It does this by providing locally sourced product, adopting traceability protocols and implementing new scanning and delivery technologies at the retail stage.

Consumer demand is high for food fitting into a specific niche or diet, such as local, organic, vegetarian, vegan, paleo and peanut-free. Gluten-free is one example of a food trend of the diet-conscious consumer. In 2016, Jama Internal Medicine published an article, based on research performed between 2009 and 2014, that showed more people are embracing gluten-free diets, although the presence of celiac disease has remained steady over that same timeframe.

It’s hard to talk about the personalization of produce without mentioning Amazon, which purchased Whole Foods in 2017. The retail giant’s grocery delivery service, AmazonFresh, sells perishable and nonperishable products to customers in select U.S. states and certain cities worldwide, accommodating the time constraints of busy consumers. In March 2018, Walmart announced it would begin offering its own delivery service called Walmart Grocery Delivery, which it plans to make available to more than 40 percent of U.S. households by the end of the year.

With this in mind, we kept a watchful eye on consumer markets as we compiled this year’s 2018 State of the Industry Report. We’ve also provided you with the latest statistics about commercial production space, growing systems, pests and diseases and more. Do you have an anecdote about how your produce operation is adjusting to changing consumer demands? Drop us a line at pwilliams@gie.net to keep us up to date.

How we did it

The data on these pages was collected via an online survey from July 30 to August 11, 2018.

The survey was closed for tabulation with 224 responses. To best represent the audience of interest, the results in the report were based on the 115 respondents who indicated that they work for an operation that grows finished produce and/or edible crop transplants under cover.

The response was tabulated and a report was prepared by Produce Grower’s editorial staff in accordance with accepted research standards and practices.

Direct-to-consumer sales of finished produce increased 4%, sales of finished produce to grocery food store retailers increased 14% and sales of finished produce to mass merchants increased 6%, from 2017. These increases, along with an 18% increase in the sale of finished produce to restaurants, suggest shifts in catering to more customers’ individual wants and needs and to the types of retailers that respond to those preferences via personalized offerings.

A sizable percentage of grower respondents (26%) said they do not have transplant customers. Meanwhile, edible crop transplant direct-to-consumer sales decreased 8% from last year. It is possible that more end-consumers would rather purchase finished produce than grow their own.

Sales of both edible crop transplants and finished produce to independent garden centers have remained steady over the past year. In 2012, edibles accounted for 27% of increases in sales at garden centers, but in 2017, that number dropped to 8% as sales of succulents grew, according to sister publication Garden Center magazine’s 2017 State of the Industry Report. However, this could reflect an increased demand for trendy ornamental crops at IGCs just as much as it could be a decreased demand for produce.

Editor's note: This article series is from the Resource Management in Commercial Greenhouse Production Multistate Research Project.

Urbanized agriculture is gaining momentum in response to increasing demands for locally produced fresh vegetables. Greenhouse or indoor vegetable production to meet local demands is the backbone for this evolving scenario. The viability of various indoor crop cultivation options demands proper documentation to guide appropriate recommendations that fit different production circumstances for growers.

Recently a popular trend toward eating local, deemed being a locavore, evidenced by a growing social movement, has evolved (Osteen, et al., 2012). While the benefits of buying food locally are debated due to the economics of comparative advantages, consumer groups support urban agriculture for a number of reasons, such as to support local farmers; to provide local, fresh food in inner city deserts; to buy fresh food; to know from where their food is coming; and to respect the environment (Peterson, et al., 2015). Specifically, one study found that 66 percent of those surveyed welcomed more local food options because local food supports local economies (Scharber and Dancs, 2015).

Many consumers also cite environmental impacts as a reason to buy local, evidenced by one study finding that environmental factors were an important reason to buy locally grown food for 61 percent of those surveyed (Scharber and Dancs, 2015; Reisman, 2012). Another popular reason is to reduce food insecurity. USDA defines food insecurity as “a household-level economic and social condition of limited or uncertain access to adequate food” (USDA ERS, 2017). Buying locally grown food can reduce food insecurity in that having local farms provides consumers who might not have previously had access to fresh produce the opportunity to purchase it. Some urban farms make a point of targeting food insecurity, and having local farms allows a city to rely less heavily on external markets to feed its population. Despite debate of realized benefits, consumers eat local food to feel good about it (Scharber and Dancs, 2015).

High capital costs

Regardless of the strength of their consumer base, the number of urban farms is still low due to the high costs that urban farmers face compared to rural farmers. Not only is the land more expensive, but also the limited plot size and probable contamination of the land with lead and toxins essentially necessitates the use of a greenhouse with high investment costs. Cost challenges that many urban greenhouse farmers face include securing funding, finding economies of scale, and facing high capital and operating costs. The energy necessary to heat a greenhouse through the winter makes utility costs high, the most productive greenhouse technologies are expensive, and land is of much higher value in cities than in rural areas (Reisman, 2012). Not to mention, the initial infrastructure cost involved in building a greenhouse is much higher than the costs that farmers growing in a field face. The costs of urban greenhouses vary greatly depending on size and type. The construction of, for example, a hydroponic greenhouse entails costs for site preparation, construction, heating and cooling equipment, thermostats and controls, an irrigation system, a nutrient tank, and a growing system (Filion, et al., 2015).

Another problem with growing in cities is shade from tall buildings and skyscrapers. Jenn Frymark, chief greenhouse officer at Gotham Greens, cites this as the primary reason that the business built rooftop greenhouses. This creates its own set of problems and increases costs compared to standard greenhouses on the ground. Other urban producers address the shade problem in cities by producing in buildings using vertical agriculture and artificial lights. However, this increases the costs even further because of the need for light all year. These high costs keep the number of urban farms small.

Marketing: quality optimization, high-value plant products, year-round production

Due to these high costs, urban greenhouses must derive profit in creative ways, such as targeting high-value niche products or markets, and producing year-round. Targeting niche products and markets allows urban farmers to charge a premium that covers the added costs of operating in the city. Targeting a niche product could entail producing special varieties of vegetables, like how Brooklyn Grange, a successful New York City-based greenhouse, grows microgreens and heirloom tomatoes. The low supply of these special varieties can drive a higher price to help cover the high costs of the greenhouse. To increase profitability, farmers can also find a high-end market (Sace, 2015).

Targeting a niche market could entail selling produce to high-end restaurants and supermarkets, such as Whole Foods, whose customers are already expecting to pay a premium price, or it could entail marketing produce specifically to locavores. In fact, one study found that, for example, consumers were willing to pay a $1.06 price premium on one pound of locally grown, organic tomatoes. In the same study, the researchers also found that urban consumers were more likely to buy locally grown produce, compared with rural consumers (Yue and Tong, 2009). The high costs associated with living in a large city means that cities have a high concentration of people who can afford to eat local in this way, and the demographics of large cities translate to a high concentration of people who also see value in eating locally produced food. Together, these create a market of locavores willing and able to pay a premium for locally grown produce.

By targeting niche products and markets, urban greenhouse farmers can take advantage of existing high-end markets to cover their relatively high costs. Since these producers use greenhouses, and a few use indoor facilities, they can produce year-round, thus providing a constant supply and a steady demand for their products.

Agricultural jobs in urban settings and other social values

Adapting a social business model can open urban farmers up to alternate sources of funding. They may want to provide jobs to disadvantaged groups such as low-income inner-city dwellers, or people with autism. Some of these businesses have reduced labor costs through volunteerism, as individuals may be willing to volunteer on a farm that supports a social issue (Reisman, 2012).  Some examples of causes that urban greenhouse social businesses focus on include education, research, the environment and food security. Harlem Grown in New York adds an educational component to the greenhouse, namely the opportunity for students to learn about agriculture and the food system in a hands-on nature, allowing the greenhouse to become eligible for funding from schools, governmental programs or donors particularly interested in education.

Other urban greenhouses can, for example, pitch themselves to city dwellers as an environmentally friendly alternative to commercial farms, using less fuel for transportation and fewer chemicals. This could again render the greenhouse eligible to new sources of funding. AeroFarms in Newark, New Jersey, has adapted a combination of the previous two models. It uses environmentally friendly techniques and collaborate with Philip’s Academy Charter School (Boehm, 2016). 

Greenhouses can additionally focus their business models on alleviating food insecurity by providing fresh produce to urban food deserts (US. New York State Energy Research and Development Authority, 2013). Unlike the previous cases, greenhouses that choose to focus on alleviating food insecurity would not be able to additionally use the method of targeting high-end markets, unless they make an effort to use the high-end markets to subsidize the cost of providing their produce to food deserts. An example of an urban farm targeting food insecurity is World Hunger Relief Inc. in Waco, Texas, which brings produce grown in its greenhouse to food deserts in the City of Waco at a market or discount cost. What these three options share is a business model that incorporates multiple bottom lines, which allows them access to new funding and volunteer labor to reduce costs.

As consumers increasingly look to eat locally produced food, for reasons such as to support the local economy, to protect the environment, to change food deserts and to understand better where food is coming from, urban agriculture is becoming a growing trend. Targeting high-value, niche markets or products, and adopting a social business model to provide agricultural jobs in urban areas, constitute some of the ways urban greenhouses to derive profit in a capital-intensive industry. By utilizing these techniques, individuals looking to start their own urban greenhouses can add value to their business and derive profit.

Robin is a Professor at Rutgers, the State University of New Jersey, where she has been the Farm Management Extension Specialist since 1988. She is internationally known for her work in greenhouse economics. brumfiel@njaes.rutgers.edu

Charlotte is senior economics, mathematics, and statistics major in the Rutgers University Honors College and worked on urban agriculture through the Aresty Research Assistant Program. cts86@scarletmail.rutgers.edu

References:

Turner, Michael. 2008. A History of World Agriculture from the Neolithic Age to the Current Crisis By Marcel Mazoyer and Laurence Roudart. The Economic History Review 61(3): 766-67.  

Vitiello, Domenic, and Catherine Brinkley. 2014. The Hidden History of Food System Planning.  Journal of Planning History 13(2): 91-112.

Peterson, Hikaru Hanawa, Mykel R. Taylor, and Quentin Baudouin. 2015. Preferences of Locavores Favoring Community Supported Agriculture in the United States and France. Ecological Economics 119: 64-73.

United States. Department of Agriculture. 1945 Census. Vol. 2.USDA ERS. 2017. Farming and Farm Income. Feb. 2017

Osteen, Craig, Jessica Gottlieb, and Utpal Vasavada. 2012. Agricultural Resources and Environmental Indicators, 2012 Edition. SSRN Electronic Journal

Scharber, Helen, and Anita Dancs. 2015. Do Locavores Have a Dilemma? Economic Discourse and the Local Food Critique. Agriculture and Human Values 33(1): 121-33.

Reisman, Alexandra. 2012. A Greenhouse in the City: The Uses and Roles of Community-Oriented Urban Greenhouses.” ProQuest Dissertations Publishing.

USDA ERS. 2017. Definitions of Food Security. USDA ERS - Definitions of Food Security. Oct. 2016. 

Filion, Nicole, Carly Wine, and Eli Turkel. 2015. Urban Farm Complex Research. University of Delaware Center for Research in Education and Social Policy, Apr. 2015.

Sace, Chito. 2015. Economic Analysis of an Urban Vertical Garden for Hydroponic Production of Lettuce. International Journal of Contemporary Applied Sciences 2(7).

Yue, Chengyan, and Cindy Tong. 2009. Organic or Local? Investigating Consumer Preference for Fresh Produce Using a Choice Experiment with Real Economic Incentive. HortScience 44(2).

Boehm, Jessica. 2016. Ag for Urbanites. New Jersey Department of Agriculture. 

United States. New York State Energy Research and Development Authority. 2013. Sustainable Urban Agriculture: Confirming Viable Scenarios for Production., Mar. 2013.