Bowery, once a leading indoor farming company valued at $2.3B, shuts down | Hacker News Reader

Bowery, once a leading indoor farming company valued at $2.3B, shuts down

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32 pointsjarsin28 comments

I don't see how indoor farming could be competitive with traditional farming for any kind of non-specialty, high value crop. You're competing with:

- Free energy from the sun

- Free water from the sky

- Basically free land in comparison because it needs barely any improvements

- Free substrate

You win out on:

- Less fertiliser, herbicide pesticide

- No seasonal variation in temperature/rainfall etc

- Closer to market

But at a very high startup cost and a high cost to maintain. Running it on racks with grow lights using solar? You're capturing the light, turning it into electricity, and using it to make more light. It's counterintuitive. I think it makes more sense to use technological advances to improve traditional farming. A lot of farmers are adopting new technologies, and I think that you'd get way more milage with cattle-herding drones, autonomous robotic fruit pickers or new fertilisers.

maybe if you could reduce/eliminate labor costs. So indoor robotic farm, setup close to consumers (to reduce transport).

No weeds, no pesticides, very efficient yields in terms of fertilizer etc. year round growth.

With the advantage of a indoor environment being easier for robotics.

it won’t be competitive with farming in other countries, where everything costs less (labor, land, equipment, etc)

But if America and other first world countries think it’s important grow food at home this is a way of making it more competitive.

America grows an enormous amount of food and exports it all over the world. We don't need indoor farming to be competitive. Indoor farming will only ever be practical for expensive and highly perishable crops that can't be transported very far.

America is perhaps the largest global producer and exporter of food. USA doesn't need it.

Frankly indoor farming is a very Dutch fad imo that would work well for countries with the Dutch economic conditions and stability. I could see it becoming more relevant for countries in the Middle East (who have already begun inviting Dutch farmers in droves to study them), Singapore, and possibly even some African and LatAm countries like Ethiopia, Costa Rica, etc.

Making a robot that can work outdoors seems a lot easier than making a farm that can be worked indoors.

Even if you need to do some prepwork like levelling paths for a robot to traverse, that's still cheap compared to a building.

It feels like indoor farming will only be valuable for super high value produce. Lots of potential there for rare or expensive produce to go down to a more reasonable level.

Or someone without enough space for land farming and they cannot import for less than indoor farms.

In the unsubsidised world it only seems to work for marijuana. Other than for that the low costs of fields or regular greenhouses seem to win.

Or maybe vanilla beans.

Or Wasabi! https://www.bbc.co.uk/news/business-29082091

What is the profit margin on lettuce? How much can you make in a year per square foot? I assume N rounds of crops grow per year, but is N=3 or is N=40?

The profit margin on lettuce is 40%. 60% of the costs are labor related so it can work but Bowery took on too much debt. The capital requirements up front make it undesirable but once operational it can be cheaper for a variety of reasons like no labor/low transportation costs/less spoilage/premium for pesticide free.

60% labor costs with all their claimed automation seems high.

60% are traditional farming costs

N can be like 10 or a little less. There is no point in culturing lettuce indoors because is a product too cheap that is up to 96% water. Counterintuitively, 1 L of mineral water can cost more than 1 Kg of lettuce, so the winning move would be using the energy to purify the water, and then just to sell mineral water bottles. Lettuce as many other vegetables is just a form of water that requires you to wash it, before drinking.

Indoor farming is for fungus, not for vegetables. Vegetables have too much enemies and without predators (or a strict, strict, blockage to keep all parasites out) is too unstable.

And if you work for big supermarkets you will need to fight for each cent, or the margin benefit will be progressively reduced until they own you.

CEA (Controlled Environment Agriculture) is not bad. When over-engineered and quickly expanded without working on unit economics it might be a bad idea.

Traditional farming is not viable near the place of consumption. It needs a lot of land, and land parcels that size near a city is impossible to find. And even if you find, it would rather be used for more lucrative purposes such as commercial properties, than farming.

So to make farming viable near the place of consumption (there by reducing the distance produce has to travel, there by reducing cost of transportation and wastage during transportation, there by selecting seeds which are less hardy for transportation but more nutritious and tasty becomes a possibility), we need to improve the yield of the farm and the consistency and flexibility.

A. Yield of the farm depends on -> 1. space requirement between each plant (which depends on the ability for the plant to absorb nutrients and access to light), 2. amount of light (the bullets) and 3. the amount of carbon dioxide (targets). Photosynthesis is nothing but when the photons in the light break the carbon dioxide bonds and release the oxygen to the atmosphere and carbon combined with hydrogen from the water becomes hydrocarbons (the mass of the plant). 4. Quality (same size, no nutrient deficiency like tip burn or spotting) 5. No pest waste 6. cycles per year

In a hydroponics farm, since nutrients can be dissolved into the water uniformly the space requirement between plants is lower compared to traditional land based farming, the quality is uniform as the nutrients density in the water flowing is uniform, the light (including artificial lights can be increased), the carbon dioxide within the farm can be increased from 400 ppm to 1200 ppm (increasing the targets). More cycles in a year are possible, layers are possible.

With all the benefits, those farms near the city try to improve yield enough to make the 1-2 acre farm near the city viable (as thought it is a 20-30 acre farm 100s of km far away).

The savings is the transport cost, the wastage cost during the transport, the wastage during quality checking cost etc.

B. Consistency

Like mentioned about, good seed selection, uniform nutrient dosing and controlled environment so no pest attack means similar sized produce. This helps with inbounding for Retailers. They have to spend less time and money on quality checking or managing sell-able period.

C. Flexibility

In farming, big retailers have all the power. The contracts are one way forced. If they have a contract with you for 5 tonnes of cherry tomatoes and you aren't bale to deliver it on time, they will penalize you. But say you have 5 tonnes of spinach which you have harvested as per the contract, they can always ask you as a favor "Hey unfortunately our inventory is still not cleared, can you delay by 1 week". Now when you are running a farm at capacity, such delays are not easy to accommodate, because the next set of plants that need to be transplanted from the nursery are ready and you need these plants to be harvested out so they can be planted here. Harvesting and keeping it is also not an option due to low shelf life.

Here is where playing with light and carbon dioxide inside the CEA is super helpful. You can increase the CO2 and increase the light to speed up growth and you can decrease the CO2 and light to slow down the growth of the plants. And this flexibility means, you give more tolerance to the uncertainty in forecasting for the retailers. You take care of their headache. And this is valuable.

I run a pretty successful hydroponics farm in India and supply to online retailers and we are their preferred suppliers purely because we take care of their uncertainties. Ours is not super high tech. Labor is cheap in India. We have some essential tech, like the lights/CO2 etc. But that's about it. We didn't over-engineer.

Transport cost in the USA is very low so that's not going to be much of an advantage for hydroponics here. The situation in India might be different.

It’s the same for all goods globally: If you are not in a hurry, the energy / co2 cost of getting it from a local warehouse to your house (optionally through a store) dwarfs the cost of shipping it via freight around the planet.

If you are in a hurry, then you need to ship via air, and then producing locally might help. (It depends on the gap between the efficiency of local production vs. the most favorable location on earth).

Correct. Which is why hydroponically grown produced focuses on low shelf life items like salad greens. And in countries like India where quick commerce is taking off (Zepto, Blinkit, BB Now etc.) it is helpful for the companies to source fresh produce locally many times a week as their dark stores are tiny and they can't have huge inventory.

For my farm and near by farms right inside the city, these quick commerce companies do milkruns and pick fresh produce twice/thrice everyday.

Sunlight is quite energetic (~1 kW per square meter) and free. Competing with it is an idea that has somehow managed to live longer than the few minutes it should have taken to realize that. Completely idiotic.

Indoor farming isn’t for “competition” with sunlight. The point is to give a controlled growing environment which reduces the need for open air pesticides, reduces contaminates, with the objective to yield.

That's usually called a greenhouse, and doesn't seem to be what Bowery was doing.

A greenhouse uses the sun. I never said that they were using a greenhouse. I described the purpose of their farming method.

The pitch of indoor/vertical farming is to make for the extra cost of light by significantly reducing other (water/pesticide/fertilizer) costs and higher yields. The math is really hard to make work though like you’re saying.

(I’m not sure if there’s an established name for this but) What you’re doing isn’t just calling the concept idiotic, but assuming that a whole chain of people involved —presumably including domain specialists, financiers, banks, whoever— are also idiots. And assuming that you (who I assume have thought about this topic for about the two minutes it took to write your post, as otherwise you’d probably have declared the source of your wisdom) know better than all of those people.

So you’re probably wrong.

For clarity I’m not suggesting that the concept does make sense; but there are probably reasons to believe that it might make sense, if implemented properly.

I can see entirely stupid ideas being build and getting some investment. Those who build it are happy to have a job even if product is questionable. And those doing funding have hopes they can extract value for themselves or flip it before it fails.

There is enough people that are just happy getting paid or extracting their cut from some part of process... And then there is the dreamers, aka idiots who evangelise.

Nah. Every ambitious indoor or vertical farming startup so far has failed, or is in the process of failing. Looks like @ahartmetz has it right and those "specialists" really were idiots. It's amazing that investors would put money into this space without seeing some evidence that costs could eventually be reduced with scale. Just another consequence of zero interest rates, I guess.

> Sunlight is quite energetic (~1 kW per square meter)

Only 50% uptime on average (less if you count eclipses), with the duty cycle varying throughout the year. I’d have expected the producers of sunlight to have improved this by now!

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