Prensented byYumiko Kanke & Matt Vail of Local Roots Farms

1. The
Future
of Farming

2. The Challenge

3. Feeding the World
9.7 billion
by 2050
World population
projected to reach
By 70%
to meet this
demand
Agricultural
production needs
to increase

4. Environmental Risks
Drought conditions
Volatility in Supply
Climate Change Extreme Weather

5. Inefficient Use of Limited Resources
WaterFertilizer Agricultural Land
http://www.emeraldlawnsaustin.com/advantages-and-disadvantages-of-
using-organic-fertilizers/
http://agamerica.com/water-supply-system/ http://ecologic.eu/10518
 Synthetic fertilizer production
accounts for about 1.2% of the
world’s energy (Yuan, 2014)
 Nitrogen use efficiency in cereal
production is only 33 % (Raun,
2003)
• Up to 92% of agriculture lands
relay on irrigation water in
Middle East.
• More than half of the lands will
be under irrigation in Asia and
USA by 2025 (Boutraa, 2010).
• Water use efficiency ranges from
30 to 65% in irrigated land
(Hamdy, 2007)
• Worldwide, loss of agricultural
land is significant due to
urbanization.
• Due to soil degradation, 3 million
hectares of agricultural land are
lost each year.

6. A Costly Distribution Network
Long distance transport
Concentrated Crop Production
CA
AZ
 Inconsistent quality
 Volatility in supply
 High spoilage rates
 Irregular pricing
4000 to 4500 km in U.S

7. The Solution

8. Controlled Environment Agriculture

9. Why Now?
605 BC
The Hanging Gardens
of Babylon
1939-1945
WWII Indoor Farming
becomes commercial as
troops use hydroponics
to grow vegetables
during the war
1980s
NASA begins research
on growing plants
under LED lights
1450
Greenhouses are first
designed and used in
Korea to grow
mandarins
2012
Phillips releases the
industry’s first
commercial Horticultural
LED Light Fixture
2013
Local Roots begins
intensive engineering and
R&D
2015
Local Roots begins
commercial scale
operations with its 1st
Generation TerraFarm,
demonstrating industry
lighting efficiency and
production metrics
2017
Local Roots launches its 2nd
Generation TerraFarm and
begins developing sites across
the U.S.

10. 1
0
TerraFarms
Local Roots' flagship farming platform
Built inside a 12 meter shipping container, the
TerraFarm reduces food miles by growing
hyper-local produce anywhere in the world.
TerraFarms can be rapidly deployed and
integrated throughout the food supply chain.
TerraFarms provide unprecedented crop
flexibility, control over the growing
environment, and harvest yields.
8

11. Proven Advantages of Indoor Farming
Unbeatable Production Metrics
Resource Efficiency
Technology-Enabled
Financeable Business Models
Growing Consumer Demand

12. Unbeatable Production Metrics
365 Days per Year ANYWHERE
30-50 % Faster Growth
300x Field Production Density
100% Consistency
Harvest and Deliver same day
One Terra Farm can produce
-4,000 Heads of Lettuce Every 10 Days
-250 kg of Baby Leaf Greens Every 7 Days

13. Resource Efficiency
99 % Less Water Consumed
99 % Less Land Required
99 % Less Fertilizer Used
99 % Fewer Food Miles
No Pesticide or Herbicides

14. Technology-Enabled
Solid State Lighting & LEDs
Robotics & Automation
Machine Learning Algorithm
Precision Control using Remote Sensing Technology

15. Finance-able Business Models
Predictable Cash Flows
Minimized Operating Risk
Long-Term Contracts
Asset-Based Financing Tools
Payback Period = 3 years

16. Growing Consumer Demand
Locally-Grown
Fresh & Flavorful
Healthy & Nutritious
Non-GMO
Pesticide & Herbicide Free
Stable Food Source

17. The Challenges and Future
in CEA

18. Current Challenges in CEA
High Electrical Usage
Labor Intensive in Limited Space
Limited Products
Weak Legal Regulations
Weak Business Model

19. Labor Intensive
More Than Half of Cost
Limited Space
Vertical Structure
Intricate Processes dependent on Crops
-Planting, Transplant, Multiple Harvests
-Planting, 2 Transplants, Harvest
Labor
53%
Electrical
27%
Material
16%
Packing
4%
Water
0%
COST ALLOCATION PER HEAD OF LETTUCE
Source: Local Roots Farms in Vernon, CA

20. High Electrical Usage
About 60% of Electric Cost from LED light
Environment Control Especially AC
Variability in Electricity Prices Depending on Locations
-in Japan, $0.26/kWh = $16,000~/year/farm
Comparison of Electricity Prices
Utility Company
Estimated Annual
Cost per Farm**
$/kWh
in Summer
$/kWh
in Winter
Company A $9,868.60 $0.15 $0.15
Company B $7,207.35 $0.12 $0.10
Company C $8,495.17 $0.14 $0.12
**Assuming Farm is lights on 18 hrs every day
10 kWh/ 0.5 kWh =daytime/nightime (183 kWh per day)

21. Limited Products
Success in Leafy Green Production
Still Not Economical or Sustainable for
-Fruits
-Vegetables such as Cucumber, Peppers
-Herbs such as Rosemary, Tarragon, and Sage
Limited Cultivar in Market
-Hydroponic System
https://www.linkedin.com/pulse/berry-good-marketing-sara-menker

22. Weak Legal Regulations
Warehouses or Containers ?
-Consider Inside or Outside….ex. Sprinkler
Agricultural, Commercial, or Industrial Zoning?
Hydroponics, Organic or Not Organic?
U.S. Dept. of
Agriculture
State
City
County

23. Weak Business Model
Selling “systems” instead of “produce”
-Lack of knowledge in running system
-High Initial Cost
-High Running Cost
-Poor Marketing
Profit Position
25%
Loss Position
75%
Terra Farm Business Status in Japan
Source: http://biz-journal.jp/2015/07/post_10898.html by Sekidou. 2015

24. Future in CEA
High Electrical Usage
Labor Intensive in Limited Space
Limited Products
Weak Legal Regulations
Weak Business Model
Science & Tech Developments
New Business Model

25. Science & Tech Developments
-CEA is Technology Enabled-
Automation
Auto Harvester, Seeder and Transplant
Remote Sensing Technology to Monitor Plants
Decision Making Based on AI
Alternative energy & LED Development
Everything is becoming more efficient
Ex. LED Light : Before 1.4 ~1.7 umol/J, Current >2.2 umol/J
Plant Science
More research in photosynthesis, microbio, and cultiver

26. New Business Model
-We sell food, not farms-
-We design, build, deploy, and operate farms-
-We provide a food supply chain solution-

27. New Business Model
-Not warehouse but container-
1. Low Initial Cost
2. Quick Establishment
3. Constantly Improving Design
4. Easy to adjust crops and volume
depending on customer demand

28. New Business Model
-From Contract to Harvest-
STEP 1: Execute Produce
Purchase Agreement
Farm build is initiated
Ensure site prep is complete
Interview & hire on site team
Farm school in LA
Schedule food safety audit
Schedule distribution
STEP 2: TerraFarms Arrive on Site
Implement food safety protocols
Complete food safety audits
Seed first crops
Order packaging
Implement accounting and inventory
STEP 3: First Harvest
Package and send product to
consumers
Replant for future crops

29. Farm School
Local Roots will hire a farm operation
team from your community.
This team will be invited to Local Roots
HQ for an immersive growing
experience
Ongoing Training
Regular webinars, growing tutorial
videos, and personalized video
consultation provide ongoing support
for new crops and technologies
On-Demand Tech Support
Our Farmer Success Team is available
24/7 to provide growing, technical,
sales, and distribution support
New Business Model
-Training & Support-

30. Thank you
Thank you

31. References
• "The Fertilizer Industry, World Food Supplies and the Environment," International Fertilizer Industry Association, December 1998.
• Tahar Boutraa. Improvement of Water Use Efficiency in Irrigated Agriculture: A Review. Journal of Agronomy, 9:1-8.2010
• Mengyao Yuan. Managing Energy in Fertilizer Production and Usage. Stanford University, 2014
• Bill Raun . Improving Nitrogen Use Efficiency for Cereal Production. Agronomy Journal, 1998
• A. Hamdy. Water Use Efficiency in Irrigated Agriculture: An Analytical Review. International center for advanced Mediterranean agronomic studies (CIHEAM), 2005