May 12, 2022
Editor’s note: The following information is derived from an interview between Agritecture and Emiliano Gutiérrez, Co-Founder & CEO at Raiz.
At Agritecture, we often hear about the numerous challenges entrepreneurs face in setting up successful vertical farming businesses. If, for instance, an entrepreneur is well-versed in the business and technology side of the equation, they tend to lack the agricultural expertise to ensure crop success in the right systems.
According to the 2021 Global CEA Census, 41% of respondents (CEA growers) had no experience in agriculture prior to starting their businesses. This may contribute to another Census finding: 75% of CEA businesses established in the past 2 years had sales revenues under $100,000.
Microgreens in production at Raiz’s flagship farm; image sourced from Raiz
Here is how one entrepreneur took on these urban agricultural hurdles by setting up his vertical farm with Agritecture Designer, the world’s first farm planning software.
With the hopes of launching an agriculture-related product or service, Emiliano Gutiérrez attended an entrepreneurship bootcamp in NYC in 2017. It was here that he first connected with the Agritecture team, saw former Agritecture client Sky Vegetables’ rooftop hydroponic greenhouse, and started learning about the wonders of hydroponics.
Growing up in Mexico, a country plagued with urban drought, he was fascinated with hydroponics - “it can use up to 90% less water than traditional agriculture.” Gutiérrez started developing his own urban hydroponic farm, growing his team to ensure greater agricultural and entrepreneurial expertise.
In his thirst for more knowledge, he came across Agritecture’s Commercial Urban Farming course in 2020.
“This course was very educational. I could access knowledge from experts from different fields - from systems to finance to marketing - and really study the crucial information there before applying it to my own farm. This helped with my farm and concept development. ”
This foundational knowledge gave Gutiérrez the confidence to further develop his concept. And, this is where Agritecture Designer became a crucial tool.
A sample farm’s CapEx breakout in Agritecture Designer.
Conducting market research for a sample farm in Agritecture Designer.
Gutiérrez shares that “we're still a very early-stage vertical farming startup. Designer was a great tool to really get to know all the possibilities - what can you grow with which systems? What's the expected yield that you can have with a greenhouse versus an indoor vertical farm?”
These key pieces of information allowed Gutiérrez and his team to filter out their options and “compare between different projects and systems.”
“I liked the fact that you could create multiple projects [in Agritecture Designer], so that we could conduct different analyses in terms of what was most appropriate - whether it was a rooftop farm or a container farm. This helped us decide what's was the best way to move forward and pursue this dream.”
Two useful tools for the team were the Crop Pricing algorithm and the Farm Modeling tool. “We used these tools to do the experiments ourselves and quantify how much we would need to invest upfront, the expected yields, and our ROI in different scenarios.” Gutiérrez shares that even though “these were just projections, they helped us build a solid foundation to launch from.”
A rendering of Raiz’s flagship farm in Arroz Estúdios in Lisbon, Portugal; image sourced from Raiz
And, last year, during the Covid-19 pandemic, Gutiérrez and his team did it. They established Raiz, launching their first farm in Arroz Estúdios, an arts space in the Beato neighborhood of Lisbon.
“Raiz” means root in Spanish and Portuguese. This name encapsulates the team’s vision for selling hydroponic produce with the roots attached so that consumers can better connect with their food. Alongside supporting a longer shelf life and fresher produce, this also helped the Raiz team craft their niche.
Today, the transformed container vertical farm in Arroz grows “microgreens and our most popular African Blue Basil.” The team is also looking into producing alternative protein mixes with lupini, to encourage more people to take on plant-based diets, alongside different kinds of spinach and tomatillo, also known as the Mexican husk tomato.
The produce is sold both to businesses - restaurants, and chefs to be integrated into dishes - and directly to consumers via farmers markets. Beyond allowing restaurant customers to taste this vertically farmed produce, the Raiz team offers stores and restaurants the opportunity of “installing the green wall at their location so they can pick up fresh veggies all day long.” This will heighten consumer awareness around the food they’re eating and how it’s being produced.
The Raiz team selling their produce at a farmers market; image sourced from Raiz
Gutiérrez shares that “the little that we’ve been able to grow in our experimental chamber has been in steady demand from chefs and restaurants that really believe in our vision. But, we also want to continue to sell to consumers - not only for the higher profit margin, but to also help educate and spread awareness about hydroponic vertical farming.”
Consumer response from farmers markets has been great thus far. “We take parts of our systems to organic markets and farmers markets - this hydroponics barrel that we put on display - and people are amazed by it. We explain how it works and have the plants with the roots attached. People seem to genuinely care about that.”
This previously unused space is given new life in the form of a vertical farm.
Shedding light on Lisbon’s urban landscape, Gutiérrez adds that “there's a lot of abandoned buildings, flats, and rooftops here. We don’t want people to only see vertical farming as a solution that can be added to new apartments or commercial projects, we want to show them how other spaces can be repurposed for a positive cashflow that can also do good for the community.”
Raiz’s leafy greens on sale at a farmers market; image sourced from Raiz
The solution of transforming underutilized spaces can also be helpful on the economic side of things. “It lowers the upfront cost, and we don’t have to acquire new land (or a new container in this case). We need to bring about this new way of arranging spaces to make them more livable and breathable with vertical farming.”
Given Lisbon’s abundance of sunlight, the Raiz team also wanted to be more environmentally conscious with their energy usage. According to the 2021 Global CEA Census, vertical farms on average use 7x more energy than greenhouses. To help reduce their energy consumption from non-renewable sources, the team plans to “integrate translucent photovoltaic panels (agrivoltaics) to feed the farm’s energy demand.”
Accessing financing for new controlled environment agriculture businesses is a challenge. Gutiérrez says that “Agritecture’s Partner Network and the team’s support was a value add” that helped connect Raiz with “different funding mechanisms, and enabled access to special discounts.”
In launching their flagship farm early next year and ensuring market validation, Raiz is starting their equity-based fundraising.
This will enable the team to continue their research and development efforts, further explore the alternative protein mix idea, launch more direct-to-consumer operations, test out more energy-efficiency practices, and keep growing!
