Austin Webb, CEO and co-founder of Fifth Season, an indoor farming company based just outside of Pittsburgh that combines vertical farming with proprietary robotics and artificial intelligence wants to disrupt the nation’s produce marketplace and create an entirely new category of hyper-local fresh produce. He might do exactly that.
The U.S. Bureau of Labor Statistics Consumer Price Index issued earlier today reported that while the CPI for all items for the 12-month period ending May 2020 increased 0.1 percent before seasonal adjustment, the food numbers tell a very different story. Total food index increased by 4.0 percent while the food at home index increased a whopping 4.8 percent.
The food index rose 0.7 percent in May that followed a 1.5 percent increase in April, which was driven, mostly by a 3.7 percent rise for meats, poultry, fish and eggs. The beef index saw its largest monthly increase ever – a 10.8 percent increase; causing concern for many shoppers and retailers who are bracing themselves for the potential price increases that seem to be looming over the industry as food production struggles with plant closures, less output and the loss of farm labor; an experience most shoppers witnessed first hand as they saw empty supermarket shelves – everything from toilet paper to flour to produce.
It is the inefficiencies across the supply chain from farm to truck to packer to supermarket and foodservice that has fueled the burgeoning indoor farming industry, which in 2017 accounted for $106.6 billion and expected to reach $171.12 billion by 2026 growing at a CAGR of 5.4 percent during this period, according to the Worldwide Indoor Farming Market Report.
Austin Webb, CEO and co-founder of Fifth Season, an indoor farming company based just outside of Pittsburgh that combines vertical farming with proprietary robotics and artificial intelligence wants to disrupt the nation’s produce marketplace and create an entirely new category of hyper-local fresh produce. He might do exactly that. The Global Indoor Farming Robots Market is expected to grow at 22.53% CAGR which in 2018 saw value of $89.7 million and is expected to reach $358.5 million by 2025. To date, Fifth Season has raised more than $35 million and is supplying produce to Whole Foods and Giant Eagle supermarket chains from their 25,000-sq.-ft. grow room that has twice the growing capacity of traditional vertical farms. He estimates they will grow in this soilless hydroponic facility more than 500,000 lbs. of produce in its first full year of operation. Fifth Season’s produce is grown using up to 95 percent less water and 97 percent less land than conventional farming. Fifth Season is delivering its produce within hours of packaging, without pesticides and has an average shelf life of weeks, instead of the typical few days that produce lasts when it is shipped from California to the Midwest or East.
Webb told me in a Zoom interview how they have achieved this higher output through the use of technology to develop a system where they can affordably and consistently create what he calls “a whole new level of the fresh experience.” Currently Fifth Season grows spinach, arugula, cilantro, basil, parsley and other specialty blends. And so, this is the future he says, but, but it hasn't been unlocked. “With our technology, we feel it really unlocked that future because we can get completely different, fresh product, at the same price or cheaper than what we've seen historically”. Sensors throughout the growing area monitor every condition — humidity, pH, light, nutrient mix — and adjust to each individual plant’s needs.
“The issue has been,” he says, “an industry wide struggle to make the economics of vertical farming work and what they have been able to do, and what makes them a completely different company in this space, is to really unlock the future of vertical farming, particularly for retailers and food service partners, because of our ability to make the economics work.”
Many of vertical farms according to Webb have really large areas with manual retrieval and storage of products. You've got scissor lifts with workers 30 feet in the air, not something he says that you want to do on a daily basis. Fifth Season has remove those scissor lifts and that human interaction inside of their growing rooms with robotics which is how they have reduced the amount of space taken up by the aisles in the growing area and reduce a lot of human labor from start to finish. These robots are able to do automated storage and retrieval of their products, and then in the processing and packaging areas, they are also integrated with automation from end to end – from seeding and controlling growing inputs to automated harvesting to the packaging it all sits within the software skin and integrated platform that they have built which contains 40 different bots. So that's something that's really important to Webb is to actually raise the bar on food safety and our ability on our base product to, to really remove the amount of human intervention in hand labor.
Using technology to increase efficiency is just one part of it. The company is using AI to both improve flavors and make produce more affordable. One example he used was having a crop that was a little extra crunchy, and using that data to learn why that trait occurred, and being able to replicate it time and time again.
Their software system comprised of machine learning, AI and computer vision also delivers traceability down to every single individual tray in their farm. Consumers want to know more about the foods they buy, where they come from, how they were grown he says and Fifth Season is delivering to retailers, restaurants and directly to the consumer a whole new level of transparency that Webb says has not been available previously; “what's exciting” he says is the technology creates information from “seed, to harvest, to package, to doorstep, to a table (or store shelf).”
Retailers, Webb says, have embraced the concept. “When we have conversations with retailers, they're really excited around how this could come in and really redefine the supply chain and start to actually provide access to that fresh food that folks want. Because it isn't just about convenience and time and things like that. It's also literally been the availability of it; because again, when we say fresh food, there have been a lot of times where that hasn't actually been fresh at all. And so to be able to really change that, I think is step one, which then can allow, unlock the rest of how people want to access, cook and eat differently than they have before, or at least how they aspire to eat. Consumer feedback is a must have for Webb, and to that end they just launched a ‘direct to consumer’ business for customers in the Pittsburgh area.