All over the world there has been a focus on indoor agriculture. Billions and billions of Dollars, Euros, Pounds, Yen and other currencies have poured into these projects. With a focus on local, with a hat tip to the idea of super productive and high yield agriculture and a yearning for a roster of social, economic, marketing and culinary benefits, the industry has boomed.
So far, though, profits, and a reasonable return on investment, have been elusive. The same oil prices that favor local, also can increase heating costs. The willingness of Wall Street to fund these projects has led to a boom. The next step remains uncertain.
CleanGreens Solution SA is taking a fresh approach to agriculture that not only is technologically advanced but that also addresses the simple desire of consumers to purchase healthy produce grown close to home. Bernhard Baumgartner, commercial director at CleanGreens, is working to give consumers just that. After working in businesses that had interests in renewable energy and sustainability, and doing consulting work as well, he returned to the agricultural world with CleanGreens, and this time is on the cutting edge of innovation with aeroponics. We asked Steven Loeb, a contributing editor at Pundit sister publication, PRODUCE BUSINESS, to find out more.
Q: What is your background and what is it that brought you to CleanGreens Solutions?
A: I grew up on a farm in France, so I always had the proximity with the agricultural world. Nevertheless I studied business and started working in the renewable energy industry and then in consulting before looping back into the sustainability sector with CleanGreens during the COVID crisis. I was already working in a startup/scaleup but in the service industry and wanted to have a closer relationship with a product and, more importantly, with a useful product. At the same time CleanGreens wanted to accelerate commercial development, so it was good timing.
Q: Before you joined CleanGreens, what kind of interest did you have regarding the agriculture sector and the food business?
A: I really wanted to go back to my roots, no pun intended, but with a link with innovation and startups. CleanGreens was a perfect match as it’s a Swiss company with a unique system and an ambition to change the way of producing vegetables worldwide. That international ambition appealed to me and was, for me, the main driver to join the team.
Q: Can you detail how CleanGreens aeroponic system functions?
A: Aeroponic technology is an extension of hydroponic technology. Instead of having the roots bathing in a gutter or a basin, they are hanging in the air and are sprayed with a nutritive cloud. This allows better oxygenation of the roots and healthier plants. The roots then absorb the water and nutrients that they need. The rest falls down due to gravity and goes back into our system. It’s cleaned and recharged with nutrients and resprayed until it’s absorbed. This closed loop system allows us to produce one kilogram of lettuce with just 5 liters of water, which is about 40 times lower than traditional field growing. The products are growing on crop modules, and they travel through the greenhouse. The seeds are planted in a processing area, then the plants grow in a greenhouse bay. Once they are fully grown, they go back to the processing area for harvesting, and then either for cleaning and replanting or for a second cut if it’s aromatic herbs. We have a unique combination of using the aeroponic technology in a greenhouse setting, one that is quite unique in the competitive landscape. We’re able to leverage this superior aeroponic technology and the efficiency of greenhouses in order to drive down the price of the final product.
Q: What did you start growing and is that the same today or are you producing more crops?
A: The original crop targeted by CleanGreens was lettuce and, more particularly, large heads, as our industrial partner, Les Crudettes, is a big processor in France, and its interest was to have as much volume as possible. The economics being harder on the lettuce side, we’re focusing today on aromatic herbs: basil, mint, chives, coriander…but in our R&D plant in Switzerland, we tested over 1,000 varieties to see what works well and what does not.”
Q: CleanGreens is using a mobile aeroponic system, so how does that work?
A: Every greenhouse bay is equipped with a robot with spraying nozzles, this robot is laser guided and drives up and down the bay at regular intervals according to the needs of the plants.
Q: Why not simply build fixed systems?
A: In an aeroponic system, it can happen that nozzles get clogged. It takes time to identify and repair them. The mobility part of the system allows us to reduce the number of spraying nozzles and thus decrease CapEx while also decreasing failure chances and maintenance cost and time on the OpEx side. Plus the robots can be easily extracted from below the crop modules for maintenance and checks.
Q: Why is your aeroponic system superior to vertical farming and traditional hydroponics?
A: That’s my favorite question, when looking at a system our clients look at three things: cost, as CaEX and OpEx, yield, which multiplied by selling cost gives you turnover, and quality, as aesthetics, nutritional value and taste. They quickly eliminate vertical farming as the costs are through the roof. Then the comparison with hydroponics gets interesting. Our yields are generally 30% to 50% higher as our roots get more oxygen and our plants can grow quicker and bigger. We reach yields of 950 tons per hectare for lettuce and around 400 tons per hectare for most herbs. The aeroponic system also allows us to keep the crunchiness of the leaves, as they never touch water, and decreases the phyto-sanitary risk. In our system the risk of contamination is very low as the water isn’t exposed to sunlight and, even then, the risk of cross contamination is even lower as the roots are not interconnected and the water is purified at every loop. On the quality aspects, whenever we invite industry experts or when we have chefs or blind tastings organized, our products are systematically rated higher than the average.
Q: Where was CleanGreans’ aeroponic system first installed and how has the company’s operations expanded since?
A: The first system installed was in Switzerland in the town of Molondin. That’s where we perfected the system and made our first crop tests. Then we installed our first full length production lines in France with our industrial partner Les Crudettes before continuing with more lines in Switzerland with Jeremy Blondin from the Domaine des Mattines who is a visionary in the horticulture world in Switzerland. That gave us a good foundation to test the system and get customer feedback on the quality but also allowed us to validate our yields.
The next steps are even more interesting, through a partnership we’re installing a 6,000 square meter system in Kuwait, and we’ll continue to develop in that area, and we’re also installing a 7,000 square meter system still with our industrial partner in France.
Q: What is CleanGreens doing about bringing its aeroponic system to the United Kingdom?
A: The U.K, is an interesting market for indoor farming for several reasons: The main one is the isolation and the high imports. In 2020, the U.K. produced 107,000 tons of lettuce and the country imported 243,000 tons and exported 6,000 tons. It means an import to consumption ratio of 71%. That’s a lot of trucks coming from different European countries to transport a product that is voluminous, light, fragile and supposed to be fresh. From an environmental point of view, it doesn’t make sense especially knowing that they are mostly produced in the south of Spain where water is not the most abundant resource. On top of that, you have the COVID crisis that puts a strain on the movements of goods and people, and many U.K. vegetable producers had to leave the products rot in the field in 2020. And again on top of that, you have consumers who want to eat local, clean products at a reasonable price. The equation only adds up if you are able to mass produce locally all year long, and our system is doing exactly that.
Q: What advantages does CleanGreens aeroponic system offer to the U.K. market?
A: The food independence factor will grow increasingly important especially in the light of recent events. Our system is also solving the CO2 aspect while bringing quality products to the consumers at market price.
Q: What consumer needs and preference does your company address that might not be as readily addressed otherwise?
A: Mainly the freshness and quality of the products. It’s already starting to be addressed by other actors in the market with different vertical farming companies, but they are limited to growing a certain number of niche products sold to a certain number of niche customers who can afford it. Our system is allowing us to not only focus on niche products but also to make things available to the masses.
Q: How do you communicate the advantages of CleanGreens to the U.K. agricultural sector and, ultimately, to the consumer?
A: We’re unlike many other companies in the sector. We often hear of competitors who have a higher marketing than R&D budget. Which is complete nonsense. We’re a Swiss company, and we have a majority of engineers, so that should tell you something about how keen we were on marketing in the early years. We really wanted to make the system right in order not to sell a promise that we couldn’t deliver. We’re now building up our marketing and sales teams to have a better presence, both digitally and in person at events like the London Produce Show, and through Swiss governmental bodies who support us in our internationalization diplomatic channels. So expect to see and hear a lot more from us in the future.
Q: How much more will consumers pay for produce products grown without pesticides and other agricultural chemicals?
A: There is no definitive consensus on this topic. Research by Deloitte in Switzerland showed that 43% of consumers are willing to pay over 30% more for sustainable products, but, on the other hand, it’s hard to convince a retailer to pay more than a 20% premium. So I think we would have to settle on this for now. The good news is that through innovation, industrialization and mass production, we’re able to decrease the costs of our system so we’ll soon be able to produce at the same cost as imported products. This is for lettuce, for herbs, we’re already able to produce in the U.K. at a cheaper cost than imported products.
Q: Do you think consumers will be willing to pay more for such produce products in the future?
A: In the short term, yes, in the future they won’t have to.
Q: Will the CleanGreens aeroponic system be able to grow more varieties of produce in the future?
A: That is clearly an important aspect of things for us and our future expansion. Today, we’re very good on leafy greens but that only represents a small part of the consumption of the clients and in a large scope a small part of the calorie intake of the general population. The leafy green part is just the first step for us, if we take a reducing world hunger approach, we will have to do much more. Next steps is the production of berries, which for us will entail a complete redesign of the system, but that’s on our R&D roadmap.
Q: Can you scale CleanGreens’ aeroponic system to bring costs and, as a consequence, end prices down further in the future?
A: Indeed, the system is organized around a process area where the seeding, transplanting and harvesting occurs. Next to that, the number of greenhouse bays, thus the number of production lines used for the growing of produce, is really scalable. Of course, the higher the number of production lines, the more the costs are optimized and the lower the final price for the consumer. Cumulating innovations, industrialization and larger production, we managed to decrease our CapEx by double digit figures in the last few years. We’ll keep that trend in the foreseeable future in order to be able to enter new markets where the economics aren’t certain yet.
Q: What do you feel is the best case for the CleanGreens aeroponic system now and in the future as the market and your business evolve?
A: The indoor growing market has evolved a lot in the past few years. A few actors managed to raise the attention of some large funds and attracted a lot of capital to finance their growth, especially in the U.S.A.. Now the sector is consolidating and investors look at projects that can have a return on investment in less than six years. That’s a chance for a company like CleanGreens, as we had this focus in the entire development of the system. In operational terms, it will mean continuing development in the Middle East, entering new markets in Europe, mostly in the Northern part, and exploring the North America market through strategic partnerships. The best case scenario is to be able to have CleanGreens teams in these three regions so that we can address these markets locally as they can have different constraints and drivers.
The whole indoor agriculture movement is clearly the hottest thing in produce right now. With strawberries the newest focus for growth in these facilities.
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