Farm Food Facts
Farm. Food. Facts. And everything in between. A podcast featuring the leading minds in the future of sustainable food systems. Brought to you by U.S. Farmers & Ranchers in Action.
Farm Food Facts
Carmela Cugini, Daniel Malechuk, Vertical Farming
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Our Thought Leader is Carmela Cugini, EVP, Sales at Bowery, a modern farming company that uses technology to grow produce.
The Stories You NEED to know:
• More Family Farm households are relying on Various sources of Income.
• Plastic is under the microscope—what does that mean for Produce?
• Can Food Forests Fight Hunger?
Today's farmer is Daniel Malechuk, CEO of Kalera, a vertical hydroponic farm.
[inaudible]
Speaker 2Welcome to Farm Food Facts for October 30th, 2019 I'm your host, Phil Lempert. Later in the episode we talk with Daniel Malechuk from Kalera, who's going to discuss Kalera's new growing facility, which will be the single largest indoor vertical farm of its kind in the Southeastern United States. And be sure to watch the new short film from USF, RA 30 harvest to see how farmers provide a source of healthy food while addressing environmental concerns for current and future generations. Go to U S farmers and ranchers.org to watch the film. But first up, our thought leader, Carmela Cugini, executive vice president of sales at Bowery Bowery is growing food for a better future by revolutionizing agriculture. Bowery EOS , their proprietary software system uses vision systems, automation, technology, and machine learning to monitor plans and all the variables that drive their growth. 24 seven Bower uses zero pesticides, 95% less water, and our a hundred times more productive on the same footprint of land than traditional agriculture based in New York city, the company has raised over $122 million. Carmela Cugini comes from an extensive experience across e-commerce, retail, consumer packaged goods, financial planning and sales with Walmart, jet.com PepsiCo and Merrill Lynch. Carmela was vice president and general manager of Walmart use commerce team leading online grocery. Carmela, thanks for joining us today on farm food facts.
Speaker 3Phil, thanks so much for having me. It's an absolute pleasure to be here with you.
Speaker 2So Carmella , I guess my first question is why become a farmer?
Speaker 3Well, that's a question my family has asked me, but uh , a thank you for the kind comments and thanks for asking. So what I can tell you that, you know, you mentioned my background and the one common denominator across all of it is that I've been involved in suit and with tests . I learned what it was to be a great supplier and@jet.com and Walmart, I learned about the challenges retailers face and providing the highest quality fresh food to their consumers. But what drove me to Bowery really was their mission and how they use technology to help solve critical issues in the agriculture space while offering consumers the food they can really feel good about. So I don't know if you knew that spill , but I actually was introduced to them in 2018 and I toured their farm and after I visited their farm, I was truly not only impressed by their operation, but completely wowed by the rich pure flavor of what they were growing. So as a follow up, we not only decided to bring their products onto jet.com, New York city grocery , um, because consumers loved it. But I started to educate myself on the global challenges we're facing and fresh food today and in agriculture. And something I was absolutely shocked to learn was that as a result of a growing population, we're going to need to grow more food in the next 30 years than we've grown in the last 10,000. And we have to do it with the dwindling set of resources and a degraded environment. So when I looked at Bowery and I saw that they were doing, I knew they were right on the right track and they began with a desire to solve the problem and in a belief that technology was really central to that solution. So I couldn't wait for the right opportunity to join the team and their mission. And they truly have an amazing team. They have a great leadership , uh, team that I'm involved with. They have one of a kind proprietary technology , um, and their produce, it tastes fantastic. And , um, in addition to that, they're investors and advisors are just amazing. So I truly could not be more excited about today in the future coming.
Speaker 2So Carmella, what surprises me to learn from you is about taste. Now we know that when it comes to food, all kinds of food and consumers' tastes is always number one. So when I looked at Bowery prior to 30 seconds ago, I saw all this great technology, you know, farming for the future and everything else. Tell me why it tastes.
Speaker 3That's a great question. So you mentioned it in your intro about boundaries operating system, which is proprietary technology to us. And what that allows us to do is we use , um , vision systems, automation, technology and machine learning to monitor every single aspect and variable that drives growth 24, seven from the ground up. So what's great about that is we can perfect the recipe, we can figure out what's the right humidity, the right , um, the right nutrients, the right temperature, the right airflow to perfect taste as well as yield. So once they get it right, they continue to get it right and they can really understand what consumers enjoy. So there , machine learning is really what differentiates them and that's really what helps us produce the taste that we have in addition to no chemicals being used in those types of things.
Speaker 2So when you are talking to retailers now that you're on the other side , um , what do you, what are you saying to them about why they should be getting into this new type of agriculture versus using their existing channels?
Speaker 3Yeah. So we have so many meetings and a lot of folks are coming out of the woodwork. But this is what I tell them is there are so many benefits to indoor farming. Um , and then I'll tell you a little bit more about Bowery , but because we grow our crops indoor in a completely controlled environment and close to the point of consumption, indoor farmers are able to supply product 365 days a year. And you know how hard that is with produce, particularly when we have weather and seasonality, right ? So we could provide a consistent and reliable supply chain to them. And local by the way, because we build our farms close to them. And the other thing that that unlocks is because it's local in nature, we can get from harvest to shelf within a few days. So that in its very nature allows us to extend shelf life for them and reduce waste in a category that has traditionally struggled with waste in the department. The other thing I share with them is my background and what they know and I have had come to learn is consumers want food that they can trust. They choose where they shop for produce based on the fresh food imprint that that retailer has. So the higher quality, more consistent offering that you have, the better you are in securing that. That loyalty shopper. So you had mentioned it, but we use zero pesticides, herbicides, insecticides, fungicides. We use less water and we have more output. And at Valerie we can differentiate with our proprietary operating system. So we can literally are , the last farm we build is the smartest farm in the ecosystem . And then that starts to feed information into future farms. So we continue to build and evolve farms that are smarter and smarter and smarter in the in the flywheel takes off. The reason that's so important though is scalability. So when I talk to a retailer, it's great to have indoor, local farming. The one reason I chose Bowery was because they can actually do this in a scalable way. And that really matters when we're talking to retailers that have hundreds or thousands of stores across the U S and globally, we can absolutely meet their demand.
Speaker 2So Carmella, one of the aspects of indoor farming that I keep on hearing from a lot of indoor farmers and conventional farmers is the limited amount of crops that can be grown indoors. What are you growing today and what do you think Bowery will be growing in the future?
Speaker 3Yeah, that's a great question. Well , uh , we are testing hundreds, hundreds of recipes of , because of the way we farm, we have the ability to test hundreds and thousands of crops throughout the year. So we are testing new future. Today we are focusing in on leafy greens and herbs. So at the present we're offering 12 SKS. We have spring blend, butter, head kale, kale mix, a rubella, which is amazing by the way. Um, bok choy, Greenleaf , lettuce , uh , sweet and spicy. And then we have Bazell, parsley and cilantro. And I would tell you that's just a start. We have tested many things, which, you know, really can't get into the details of that at this point.
Speaker 2Oh, come on. Yes you can. Yes, you can tell us some secrets.
Speaker 3Oh , well I can tell you things we've tested. So some of the things we've tested, our strawberries are cucumbers or peppers are, I just tasted a turnip last week. Um , we have an amazing with Savia rubella. So that's the other thing that's pretty interesting when you start saying, well, why does this technology matter? Because with technology, we can actually start to iterate on chaste and , and, and start bringing things to market that haven't even been out there. And if you want to talk about loyalty with a retailer , start providing them with something that has a unique flavor that people love. Um, we've seen so many brands win that way.
Speaker 4Well, Carmela does. Sounds great. Very exciting , uh , for both you and for Bowery farms and for consumers. So thanks so much for joining us today on farm fruit facts.
Speaker 3Phil, thank you so much for the opportunity and for the great conversation. As usual, you're always a pleasure to talk to. Thank you
Speaker 4and now for the news, you need to know how the spring seasons, wet weather and flooding continues to impact agriculture. Despite the record setting wet weather patterns which occurred in the Midwest. The spring, the USDA surprise the agriculture industry with a report estimating that 91.7 million acres of corn were actually planted this year. Industry experts also found that the USDA is lower than expected soybean planting estimate of 80 million acres to be surprising as it's the smallest reporting planning since 2013 Todd Holtman lead grain market analyst at DTN stated the USDA is new three crop total for corn, soybeans and wheat acres is 217.3 million down 8.8 million from 2018 according to USDA, the market got the nearly 9 million acre reduction in plantings and expected. What was not expected was how the lion share of the reductions were in soybeans . While the discussion and reflection continues around the acreage reports, the agriculture industry is anxiously hoping there's enough temperature growing season available for plants to move through their development, pollination, filling and maturity stages. Before we face the first freeze of the fall season and on the topic of extreme weather, we must keep in mind that no industry will be impacted by climate change as much as agriculture. The intergovernmental panel on climate change recently released a report which expressed that no other industry is so directly impacted by climate change. Then agriculture, significant shifts in temperature, weather patterns, water accessibility and pest populations put great stress on agriculture production. There are signs of these significant shifts in countries like Australia where persistent hot and dry conditions have contributed to the deterioration of pasture conditions, rising rain prices and low water supplies here in the U S 1 million acres of cropland were damaged in the Midwest after a cyclone storm and flooding in the spring of this year. Complicating matters is the anticipation that demand for food will grow as the global population continues its growth and as we look to the future, what can we learn from the past? Farmers try to decipher what trends shown in the latest census of agriculture mean as they plan for their futures. Of course, some of this information must be taken into context by statute. USDA is definition of a farm includes some particularly small operations with only a thousand dollars in sales, so that can often skew some of the numbers. The USDA census was first conducted in 1840 and in recent decades it has been done every five years. The figures released earlier this year or from 2017 the average age of farmers in the survey is 57.5 years old. That continues to rise. It was 55.6 years old in 2012 and 54.5 years old in 2007 only 9.4% of farmers are under 35 years of age, but 27% are classified as new or beginning producers. That is encouraging. There was also a large increase in the number of female farm operators. The latest census shows that 36% of producers are female, Iowa farm Bureau Federation economists. Sam funk reminds us that you can't always say that the numbers say this or that. He explains it. In some cases the question or definition may have changed or the technology involved change. Despite that the census does provide an important snapshot of agriculture that can be used in a variety of ways. One important note that the census clearly shows is that the makeup of agriculture is gradually changing. About 39% of farmers don't work off the farm at all, but another 40% work off the farm for more than 200 days per year. Farmers who want to find out more can look online at the U S DA's website. The ag census page even includes a query feature so that farmers can inquire about figures for their specific County or crop. Today we're going to go indoors
Speaker 2and we're going to be talking to a new kind of farmer. Daniel mallow. Chuck is CEO of calarom . Daniel's background is really interesting to me because he's worked in sales, supply chain optimization, built sustainable programs. Uh, actually started his career at Aldi where he expanded into new markets. Um , he was the director of corporate purchasing at all these us headquarters , uh, led the perishable program focused on global sourcing, purchasing, marketing, product development. And now Daniel, you're a farmer. Welcome to farm food facts. Thank you very much, Phil. It's a pleasure to be
Speaker 5here.
Speaker 2So talk to me about why with with the extensive experience that you've had , um , at a lot of major companies you decided to get into indoor vertical farming.
Speaker 5It's a really great question and really boils down to what I believe the future of food is. And I think what's so exciting is to see how rapidly the world is changing. And so many avenues from technology, of course, we all can look back at the internet age of the last decade and a half or so. And really how that's fast forwarding into food. And it's just so exciting to be something, to be part of something that's focused on growing more sustainably, using the natural resources of the world, whether it be land or water , uh, and a much more sustainable way than ever before possible. And, and to be on the leading edge of , uh, bringing food to the population in a much more sustainable way is something that was really exciting for me and opportunity I didn't want to let pass by.
Speaker 2And when I look at your background, especially in retail, I would imagine that when you have conversations with retailers, having had that experience, you can really point out to them the benefits of vertical farming. And now you're building, you know, a , a new vertical farm, which is going to be the largest indoor vertical farm , um , in the Southeastern part of , of the U S and you're going to grow 5 million heads of lettuce a year.
Speaker 5Yeah, absolutely. I think it's very easy to sit in front of a head of purchasing or a procurement director and to be able to relate to them probably in a way that not a lot of , uh , other sales folks are possibly able to do so. Because I've sat in their shoes and I understand what's really important, whether it be on a small scale or even to a global scale with having worked in my career and the different avenues that I have. And to be able to relate to them too, to say, I , I understand where you're coming from and I understand the pressures that you have of not only trying to balance , um, the needs of your customers, but the demands that may come from corporate on becoming more sustainable or sourcing more locally or having a fresher product or , um , having a story that we can tell to our customers that we're making decisions that are not only better for them, but better for the environment and to be able to relate to, to say, I've been there. I , I understand. Let me help you. And to really take that consultative approach in leading Calera but in partnering with our key partners to , to listen to them and to , to be able to hopefully provide not only a great product, but a true partnership of somebody that's not just trying to sell them something but to help them and to solve some of the problems and challenges that they may have. And it's been a very successful part of my career, not only here at Clara hood in the past as well. And it's something that I enjoy a lot, is the experience that I've had, but also continuing to learn every day from the, that I have the opportunity to work with and to see how the , uh , demands of their businesses are changing and how we may be able to help them with those and solve some of the problems and challenges that they face .
Speaker 2When you sit down and talk with them, are you finding that they're up to speed on what's going on with indoor farming with hydroponics or do you really have to educate them too to what this future is gonna look like?
Speaker 5That's a great question. You know, what I'm really blessed with is the opportunity to work with a lot of educated purchasers that are very in tune with where the market's at. They understand that the future of farming is changing and gone or soon to be gone, possibly are the days of massive fields of tearing down forest and water being sprayed all over the place and pesticides. And they're eager to find ways to find more local solutions that are more sustainable. And I think, you know, a lot of, a lot of buyers are very well educated. They read, they go to trade shows , um, they're very in tune what's happening. And then of course, there's others that that may not understand what hydroponics is all about. And to go with that , uh, as far as , um, knowing exactly what it is that we're doing. But I think what's really well received is every time that we , uh , sit down in front of everybody , um , and we tell them the story that we're growing product locally, that we're using 5% of the water from traditional farming, that we have 300% of the yield compared to traditional land usage that we're not tearing down for us . Um , that we're bringing them product within hours , uh , if not one day of harvest. Uh, and our product is still alive due to the fact that we harvested with a root ball still on it and the plant has gone dormant but it hasn't been chopped out of a field that doesn't use pesticides, that it's non GMO, that it's higher nutritional value, that there's no eco lie, there's no pests or bugs running through the field are flying overhead and using the bathroom on the product. Uh , these things resonate really well and it's a great story that even if they haven't really been familiar with a vertical farm, but you bring them in, you show it to them and it's amazing to see how they, they quickly understand the value of what it is that we're doing.
Speaker 2So if you look into your crystal ball, what do you think the biggest challenge is for indoor farming?
Speaker 5You know , I think that the biggest challenge for indoor farming is really initially the funding portion of it, of getting the ability to expand as rapidly as the demand is there. I think indoor farming is something that's, we're going to look forward in five or 10 years and probably not even that long. And it's going to become the new way of wringing farming to the world. And I think a place is such, as, you know , Africa or even parts of Asia and , and honestly even parts here in the United States then where there's food deserts and there's such a long journey from where the salad bowl of America is, which right now is Yuma, Arizona and Salinas, California. Absolutely. And there's just such a large carbon footprint. So I think one of the biggest challenges is going to be ramping up quickly and there is capital that's involved to do that. Um , and it takes visionaries to be able to get behind that new way of thinking that we don't need to do this out in massive fields and put it on trucks and cart it for multiple days across the country and to say, you know what? I see why there's this is an advantage. I see why this product is better and fresher and more sustainable and more local and be willing to commit to purchasing it and also to commit to the capital that's involved initially to get started up. Just like in any and most new ventures, you know, it takes a little bit of time for the adaptation of the product, but really when you get the product in front of people and they experience it and they understand the story behind it, it really does sell itself
Speaker 4well. Daniel, welcome to farming and thank you for joining us today on farm food facts. My pleasure. For more information on all things, food and agriculture, and to listen to our archives, please visit food dialogues.com under the programs and media tab and visit us on Facebook at U S farmers and ranchers, Bourne , Twitter at USF, RA. Until next time.