Q & A With Jake Counne, Founder, Wilder Fields

 

When Jake Counne established Backyard Fresh Farms as an incubator in 2016, he knew that most large-scale vertical farming operations were large-scale financial disappointments.

So rather than attempting to patch up the prevailing model, he and his team chose to build something new from the ground up. “Other start-ups had tried scaling their operations with antiquated greenhouse practices,” he says. “We realized that to solve the massive labor and energy problems that persist with indoor vertical farming. We needed to look to other industries that had mastered how to scale.”

That vision, and several years of persistent innovation, came to fruition in 2019 when Counne announced he would transplant the successful pilot farm—now renamed Wilder Fields—into a full-scale commercial vertical farm. It is currently under construction in an abandoned Super Target store, with an uninterrupted expanse of three acres under its roof in Calumet City, just outside Chicago.

Wilder Fields is designed to supply supermarkets and restaurants in the Chicago metro trade area,. It is scheduled to sell its first produce in the spring of 2021. It will  provide fresh produce to those living in nearby food deserts in Illinois and Northwest Indiana.  In this  Q & A with Jake Counne, Indoor Ag-Con will share more Jake’s vision and plans for the  future.

According to an Artemis survey, only 27 percent of indoor vertical farms are profitable despite attracting $2.23 billion in investments in 2018. Why do you think a small start-up like Wilder Fields can succeed where so many have yet to earn a profit?

We started four years ago by investing our own resources. We were also working on a very limited scale in a small incubator space. I think those constraints pushed us to be more discerning about what we should tackle first. In that time, we developed an array of proprietary software and hardware, many of which have patents pending. And we refined a new paradigm for vertical farming, moving from the greenhouse model to lean manufacturing.

We also had the good fortune of starting up just as many first-wave indoor farms were closing down. So we looked at those case studies to understand what went wrong. And, what they could have done differently—what was needed to succeed. In fact, the founder of one of those first-wave farms now serves on our advisory board and really helped us identify the right blend of automation and labor.

With traditional vertical farming, the bigger you get, the more your labor costs increase. It seemed to us that the first generation of large-scale commercial vertical farms thought they could simply scale-up labor as they grew.

But we realized that operational excellence and efficiencies are essential to marry growth and profitability. It’s very hard to control a wide variety of factors using a 100 percent human workforce; for the most part, our industry has realized we need to recalibrate and find ways to automate.

 

So automation solves the problem? It’s not as simple as that.

Now the problem that the pendulum has swung a little too far in the other direction. The  industry is almost hyper-focused on automation—as if automation is the answer to all of vertical farming’s problems. It’s not. Remember when Elon Musk tried using too much automation to produce the Model 3? I believe he called his big mistake “excessive automation” and concluded that humans are underrated.

We believe well-run vertical farms, and the most profitable ones, will achieve the right balance of human labor and automation. And that’s been our laser-focused goal from day one—to bring down labor costs in an intelligent way, in order to make vertical farming economically sustainable.

We also reduced costs by repurposing an existing structure rather than building a new one. We located a vacant, 135,000-square-foot Super Target in the Chicago suburb of Calumet City. What better way to farm sustainably than to build our farm in a sustainable way? Along with City leaders, we think we can help revitalize the depressed retail corridor where it is located.

To my knowledge, converting a big box space to an indoor vertical farm has never been done before. So we also are creating a blueprint for how to impart new life to empty, expansive buildings.

We also will provide opportunities for upwardly mobile jobs and environmentally sound innovations, and produce food that promotes community health.

Vertical farming is a fairly new development. How does it fit into the history of modern agriculture?

I make an analogy with the automobile industry. Field agriculture is sort of like the combustion engine. It came first and was easy to scale up, making it available to  more and more people. There were obvious downsides to it, but soon the whole world was using the combustion engine, so we kept churning them out.

But as the detrimental effects began to accumulate, we started asking ourselves how to reduce the negative impact. That’s when the auto industry came up with hybrid cars—they’re the greenhouses in this analogy—and while they were certainly a less bad solution, they weren’t really the solution.

And now we have the fully electric car and it has started outperforming combustion engines on many different levels—just as indoor vertical farming is now beginning to outperform field agriculture

Today’s business mantra holds that the more you automate, the more efficient you become. So why is vertical farming any different?

There are certain efficiencies that don’t require specialized robotics, especially if these tasks can be accomplished in other ways that sustain quality and reduce costs. For example, instead of our workers going among the plants to tend them, the plants come to the workers in assembly-line fashion that requires fewer harvesters. So it’s always a balance between the investment in specialized machinery and the cost of the labor that it will eliminate.

And while there’s definitely room for automation, it doesn’t always require new specialized robotics. In our industry, plenty of mature automation already exists that can be used to good effect, such as automated transplanting and automated seeding: both employ proven, decades-old technology.

So when I see some other start-ups trying to reinvent these processes, it’s hard to understand. They design and build new, expensive equipment—something possible with an unlimited budget—but in fact, a more affordable, simple solution already is available.

Start-up costs are notoriously difficult to finance. How were you able to get off the ground? What advice would you have for others in the industry?

There’s no easy way to bootstrap from a small start-up to a large scale without that big infusion of capital. You’ve got to decide early on if you should try to secure venture capital from institutional folks or search out more, smaller checks from friends and family and accredited investors.

As I see it, venture capitalists look to the founders’ background and education more than a business model that needs to be tested. If you don’t have that pedigree out of the gate, it’s an uphill battle.

We chose to take a different path, one that has proven successful for me in the past.  It’s one where  I led a group of investors who acquired overlooked residential properties on Chicago’s South Side.  We brought stability to neighborhoods and now manage a large portfolio of quality rental properties. There was no white paper when we embarked on that venture, but we shared a vision for revitalizing good housing stock.

I also tell people to explore equipment financing, which thanks to the cannabis industry has opened up more and more. It’s definitely possible to finance some of this equipment. That seems to be a good route as well.

How will vertical farming impact the types of the crops you grow?

Wilder Fields grows and will continue to grow a wonderful variety of leafy greens. Many will be new to people because they can’t be efficiently raised in a field. So we are building our product line around flavor and texture as opposed to supply-chain hardiness.

But remember, the indoor vertical farming industry is in its very early days. Soon we will have a whole new frontier of applications and crops to grow. Especially now that certain companies are offering indoor-specific seeds. We’ve seen this movie before. When greenhouse-style vertical farms first came on the scene, they used seeds that were really bred for the field. They were doing okay. But, as soon as seeds were bred specifically for that greenhouse environment, yield and quality shot through the roof.

Now that we’re on the cusp of having specialized seeds bred specifically for our purposes, I think we’re going to see that same leap in yield and quality as well.

Of course, your initial planning could not have factored in a global pandemic and ailing economy. How have the ramifications of COVID-19 affected Wilder Fields, and your industry at large?

This is a time for us to champion the benefits of indoor agriculture because vertical farming is doing really well. Any farms primarily serving restaurants obviously had a problem. Companies that pivoted away from restaurants have been able to reach consumers more than ever. They’re capitalizing on their indoor-grown—and therefore much cleaner—product.

Supermarkets are our primary market. With people cooking more at home and looking for fresher and healthier choices, they’re eating more leafy greens.  This is another positive phenomenon.

The success of your model relies heavily on your proprietary technology. Do you have any plans to eventually license your innovations—to make them available to others, for a fee?

That’s a question we’ve been asked a lot, not only from our industry but also from the cannabis industry. We may revisit that opportunity in the future, but it’s not something we’re immediately considering.

Here’s why. When I first entered the industry in 2016, I noticed there were so many consultants. Many people were licensing technology, but none of them were actually using that technology to grow leafy greens at scale. They’re like the folks who sell the pickaxes and the shovels instead of mining the gold.

My perspective is, “You’ve got to venture into the mine to know what sort of shovel and pickaxe you need”; in other words, that’s how to understand what models to create for logistics and ergonomics and what tools are needed to make them work. I did not want our company to be one of those that are just sort of camping outside the mine and hawking its wares.

I think the only way we can  develop a solution that’s worth its weight is operating our own technology and equipment at scale. And I haven’t seen anybody do that yet. Is it possible that we license our technology somewhere down the road once we’ve actually proven it out at scale? Maybe; but it’s not part of our business model right now.

So, along those lines, when will Wilder Fields deliver your first produce—grown in your first full-scale commercial vertical farm—to grocers in metro Chicago?

We have committed to the end of the first quarter of next year: March, 2021.   In addition to this Indoor Ag-Con Q & A with Jake Counne, you can  learn more about Wilder Fields visit the company website