Mar 1, 2022
With humble beginnings, Farm.One has slowly established itself as one of the most innovative vertical farms of the decade. Since its inception in 2016, this NYC-based farm has been at the forefront of the vertical farming industry, using its technology to “surprise and delight [customers] with fresh, local, specialty ingredients” at every step.
Now, the company that has inspired urban farming entrepreneurs around the world is in need of financial support.
Farm.One is facing potentially fatal fundraising challenges. Agritecture spoke with Founder & CEO Rob Laing to uncover the values that have driven the business’ growth, how they were able to survive the Covid-19 pandemic, and where they want to go from here.
Laing shares that Farm.One started with “a vision of growing specialty produce for NYC chefs.” With products ranging from rare herbs to edible flowers, the team was able to supply unusual yet flavorful produce, grown hyper-locally, to over “40 restaurants across the city,” including several Michelin-starred restaurants. Five years in, they had grown over 700 different varieties.
The team was also committed to transparency and accessibility at the heart of their business, something very few other vertical farms do, so they opened their doors to the public through tours and classes. This provided an exciting opportunity to educate locals on vertical farming and the unique and exotic flavors being grown.
But the coronavirus pandemic created a major threat to Farm.One’s business.
With the closure of restaurants and in-person events in early 2020, Laing and his team were faced with the challenge of rethinking their business model - as did many other farms - now that their primary sources of revenue had suddenly vanished.
Their desire to uphold the connection to their local community led them to pivot to a direct-to-consumer (D2C) model, in which local residents could subscribe to receive a weekly delivery of greens grown by Farm.One. Instead of selling to grocery stores, Farm.One shifted the perception of grocery delivery, “putting farms right where people live, and delivering to locals only.”
Other local independent food producers were also included in this weekly box, as the team realized that building up a community of small, innovative businesses would help them survive the hardships of the pandemic together. These partnerships include Brooklyn-based indoor farming company Smallhold that sells luxury mushrooms, and Rawsome Treats that provides smoothies and plant-based bottled milks.
In this sense, Farm.One seems to be building a direct-to-consumer, CSA-style healthy and innovative food brand as much as they are building a vertical farming company.
And, according to Laing, it’s working in its early stage. “The consumer subscription model was readily accepted. Within just a few weeks, we had sold out of capacity from our Tribeca farm.” This prompted them to hunt for more space in a part of New York that would feel more approachable than Tribeca.
In April of 2021, Farm.One secured that new space in Brooklyn’s Prospect Heights, and launched phase one of their farm by August. According to Laing, being a family-focused neighborhood, Prospect Heights has “great food traffic, and a generally good vibe” that fits Farm.One’s target audience.
The team is able to harvest produce hours before delivery and now has a steadily growing customer base of over 300 weekly subscribers. While pre-pandemic, Farm.One grew hundreds of rare varieties for chefs, they’re homing in on a smaller list of best-sellers with their new model. This includes some rare herbs, microgreens grown to a later stage of maturity (about 17 days), and certain edible flowers. They hope to build a daytime cafe as well as a cocktail menu to increase foot traffic to the facility.
Laing believes that this shift has created a “better business” than before, with this D2C model offering a more scalable and profitable pathway. He sees opportunities for expansion into as many as 50 cities across the US. “We're gonna start in the major cities like New York and Chicago, but this is something that is also viable in Columbus and Nashville. From a consumer perspective, we've demonstrated that this produce isn’t just for the wealthiest zip code, it’s also for regular people that live in our neighborhood.” Given the popularity Farm.One has endured amongst fans and entrepreneurs, Laing shares that franchising is also something the team may well consider in the future.
Nevertheless, this potential for expansion will not undermine the core values which have kept Farm.One afloat through turbulent times. They’ve kept up their commitment to centering environmental sustainability, not only in nearly eliminating the very idea of a “supply chain,” but also going further in their aim to eliminate all plastic waste through the use of reusable containers in delivery.
Despite the promising growth, Farm.One finds itself at a major junction with a need for more cash to expand production.
According to Laing, various factors have kept them from landing VC funding so far. He believes that the steep rise in interest in CEA amongst investors recently has led to many venture capital firms already ‘picking their horse’ and not wanting to invest in another vertical farm for now.
Of course, the D2C ‘neighborhood-farm’ model makes Farm.One a rather complex investment from a venture capital point of view. VCs are often unwilling to fund proof-of-concept stages, where long-term evidence of success is not yet available or fully established. But Laing stopped short of agreeing that Farm.One’s model or early-stage evidence of success precludes them from raising venture capital – he feels timing and luck have played just as much of a role, and while there’s been interest, no commitment has yet emerged.
Does Farm.One's difficulty in securing VC funding fit the 'trough of disillusionment' stage of the Gartner hype cycle, as discussed in Agritecture Founder Henry Gordon-Smith's recent article?
According to this theory, emerging and innovative industries such as vertical farming face a period of readjustment after initial inflated expectations, where the perceived value of the industry falls, before gradually rising to a stable ‘plateau of productivity’. In recent years, the initial rush to invest in vertical farming may lead to a challenging period, where investment interest wanes especially in the instance that some well-backed companies fail.
To continue their ambitious goal of providing more sustainable fresh food options to local consumers, Farm.One is returning to the source which has driven them all along: their community.
Exclusive interview with Rob Laing, CEO & Founder at Farm.One.
Having successfully raised funds in 2018 through a crowdfunding campaign, backed by over 300 investors, they have precedent to trust that their community shares their vision and is willing to support their continued success.
Now, Farm.One has an urgent target to raise $3 million to get them back to the point of profitability. Of the funding:
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$2 million will go to completing the buildout of their farm in Brooklyn. This includes their events/retail area, which will make it a draw for the neighborhood and the #1 food-focused destination for education and entertainment in NYC.
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The additional $1 million will be working capital to get the farm to profitability.
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With any additional funding, Farm.One will also be able to resume their chef sales.
*To support Farm.One in their endeavors, consider investing in the campaign, sharing the campaign with your network, or getting in touch with Rob to discuss other options.
*Disclaimer: All investment strategies and investments involve risk of loss.
Nothing contained in this article should be construed as investment advice.
