Hydroponics: Will Homes become the New Farms?
What is Hydroponics and its benefits?
Hydroponics is a practice of growing plants in a water-based nutrient-rich solution without soil. The plant roots directly mingle with the nutrient solution and provide access to oxygen which is crucial to proper growth. The word comes from Hydro (Water) and Ponics (Labor). The history of hydroponics can be traced back to early civilizations. The floating gardens of Kashmir, hanging gardens of Babylon are all built on Hydroponic culture.
Hydroponics attacks the conventional premise that soil is essential to plant growth. Instead what plants need is what is contained in the soil (water and nutrients) and not the soil itself! Some of the most popular plants grown under hydroponics include tomatoes, cucumber, lettuce, strawberry, pepper, and the eternal favorite marijuana!
Growing medium includes the material in which plant roots grow. It includes coconut fiber, gravel, sand, vermiculite, perlite, rock wool, among others.
The global hydroponics market was estimated to be $8.1b in 2019 growing at a 12% CAGR to reach $16b by 2025
Hydroponics offers a host of advantages. Key among them is the ability of a plant to grow 25% faster and produce 30% more output than the same plant grown in soil. As the roots do not have to work as hard enough due to the ready availability of nutrients, plants can focus on what matters the most which are leaf and stem growth.
It also saves between 70–90% more water than soil-based plantation as water is recirculated and reused. To take an example to grow 1kg tomatoes require 400 liters of water through conventional farming, 70 liters using hydroponics, and just 20 liters in aeroponics. It also helps reduce waste and pollution from the soil runoff. Further limited use of pesticides and chemicals makes the air, water, soil, and food cleaner.
Hydroponics also requires limited space. Indoors, balcony, terrace, small yard, etc. all suit themselves to the new age cultivation. Reduced labor requirements, harvest consistency in quantity and quality and ability to grow a wide assortment of crops are other key benefits
Overall, the big promise of hydroponics remains to make the world hunger-free and cleaner as the planet becomes hotter.
Timing- Why is it needed more than ever now?
A study in 2017 mentioned that the world might run out of food in the next decade. Droughts, conflict-caused food insecurity, soil erosion, and freshwater wastage will only exacerbate the problem further. By 2030 the human population will exceed 8 billion at which point the world’s agricultural system will fail to produce enough food to feed everyone in the world
60% of food loss in India happens between the field and end-consumer concentrated in a few crops especially- cereals, fruit, and vegetables. Decentralization of food production and distribution and growing closer to consumption will reduce long haul travel minimizing carbon emissions and food waste. Farming close to the market in cities will become more appealing.
The recent locust attacks in India, Iran, Pakistan and Africa which have been the worst in a few decades has also exposed a serious threat to food security. All this points to a critical need to bring farmland closer to consumption due to higher and newer risks on crop and food disruption.
Another unrelated fact is that there are 1.5M cancer deaths in our country of which 75% happens due to contaminated food.
In the next decade, I firmly feel that homes will become the new farms. Whatever space (garden, rooftops) is available will be used to grow vegetables. Severe weather patterns and climate change will force farming to go back to basics. More indigenous crops and methods such as hydroponics will be deployed as they are more resilient against climate change
Biotech and innovative food will become the next growth driver for Ag-Tech in venture funding also. Most of the VC funding in the last five years has been done in farmer platforms, B2B Agri marketplaces, rural fintech, farm to consumer brands, deep tech, precision farming, and post-harvest SaaS
Application & Techniques of Hydroponics
One of the greatest use cases for Hydroponics is to grow fresh produce in non-arable areas or areas with little to no soil. This can vastly improve the food sufficiency in these regions. Even NASA has mused the possibility of Hydroponics and explored farming in space!
Huge untapped areas in the centers of many urban cities and towns can be used for hydroponics. In Paris, reduced car use has allowed underground car parks to double up for growing mushrooms instead. Space efficient, climate-controlled indoor farms have also started popping up the world over from Japan to Scotland.
The current pandemic is set to overhaul the use of prime real estate in India as well. Some companies are making working from home permanent. Malls and theatres in city centers have been shut for more than three months now, and some of them may never recover. There might be an opportunity to leverage these vast unused spaces for vertical/ indoor farming. Automated terrace farms on residential towers and commercial buildings can also be established
Newer models such as Farmizen which create a community-powered alternate food system, Urban Green Fate Farms which convert unused spaces into live food gardens such as, or the ability to offer Hydroponics as a Service (HaaS) all have interesting growth potential and can propel adoption among the urban segment which is keen but unaware.
There are six types of hydroponic techniques in use. The most popular is Deep Water Culture in which the plant’s roots are suspended in a solution composed of water and nutrients which is well oxygenated. Other techniques include nutrient film technique, Aeroponics, Wicking, ebb, and flow system and Drip System
Interesting Startups
Startups that can make hydroponics easy to understand, convenient, and prompt a behavioral shift (crucial for any new trend to pick up!) will have high growth opportunities.
Globally UK, USA, Australia, and India (yes!) are among the top 4 countries in terms of production size of commercial hydroponic farms.
Extreme weather patterns (heatwave and freezing cold) had led the UK to gradually shift to the greenhouse method of production.
The USA leads in terms of hydroponic hobbyists and growers globally. Aerofarms produces more than 20M pounds of vegetables each year in over 100k square feet. It raised $100M from Patient Capital last year. Then there is Plenty which is a vertical farm company where Softbank and Bezos invested $200M. Here is a short 40-sec video on their operations
In Australia, extreme heat waves have threatened water sources for cultivation. In 2018, 11% of their wheat production was impacted due to the nationwide droughts. This has led to a gradual shift to hydroponics.
As India transitions to a middle-income country and more consumers become health conscious in this decade, niche markets for exotic greens and gourmet salads will likely become big. Growth will also be driven by produce which is unable to grow in India but is seeing a steadily increased demand. This includes swiss chard, kale, parsley, oregano, cilantro among others
Indian startups which are working in this space include Farming V2 which is building India’s largest chain of hydroponic farms. It grows pesticide-free food and delivers them to consumers in just four hours from harvest. It grows 30+ varieties of leafy greens and berries.
One of the most interesting ones is YC backed Urban Kisaan which builds vertical farms in India and sells the produce directly to consumers. It uses 95% less water with 30x more yield per unit area
There is also Salad Growers which has a monthly subscription model to sell a variety of greens and herbs. Growing Greens sells micro-greens, edible flowers, salad leaves, sprouts, herbs, etc. which were earlier imported by 5-star hotels, high-end restaurants, and cafés in Bengaluru.
Clover Ventures is aiming to build India’s first fresh produce demand-backed supply chain which is resilient to climate change. The focus is on quality, consistency, traceability, and a high degree of predictability. There is also Junga FreshNGreen which is building high tech farms in India in collaboration with a Netherlands based Agri-Tech company
Barton Breeze is also reimagining the future of farming by setting up fully automated hydroponic farms. It allows new-age farmers to have complete control over what and how they grow while providing clean, nutritious, and fully traceable choice to consumers. It also provides home kits with all essentials from seed to harvest. Another startup Future Farms Urban also provides farm setups at home with a step by step guide.
BitMantis is an enabler that is working on a cloud platform and IoT solutions which helps growers to efficiently grow and monitor without prior knowledge of growing. Earlier this week Agro2o which is a software and hardware integrated IoT solution which automates hydroponics also raised a seed round. Its product Smart Garden allows intelligent nutrient infusion, water refill reminders, automated lighting, water, and air quality detectors. Think of both these players as a Stellapps for the Hydroponics sector!
Indian business groups such as Patanjali and DS Group are exploring possibilities of launching hydroponics on a commercial scale. Scaling niches is possible as we have seen in what Starbucks did to the brewed coffee market.
Possibly the biggest benefit offered by hydroponics is a rise in micro-entrepreneurship and self-sustaining models. There are rising examples of urban professionals leaving their ‘boring’ jobs to start companies such as Herbivore Farms & Pindfresh.
Challenges
So, if it sounds so awesome, why has hydroponics not picked up?
Indoor farming has had a chequered history globally. Companies have failed to scale up and expand. Local Garden Vancouver declared bankruptcy a few years ago. Aerofarms which in 2015 planned to set up 25 indoor farms in 5 years has built just one farm in 4 years.
In India, hydroponics still accounts for <1% of the food market
The biggest challenge is the cost factor which prohibits mass scale commercialization. The cost per square meter for a hydroponic system is much higher than for soil farming. Further hydroponics requires greenhouse structure, pumps, water tanks, filtration systems as the bare minimum. Compare it to a traditional method where land, planting/ harvesting machines, irrigation systems would suffice.
According to research the costs per pound to grow and deliver greens in various formats looks as below:
With a 40–45% gross margin assumption, retail prices for greens will need to be $1/ lb for conventional, $4/lb in hydroponics, $5/lb for vertical, and $12/ lb for container-grown. Unless the 4–5x price differential can be justified, the demand will remain weak especially in a price-sensitive country such as India
Location is also a critical factor as you want to grow crops closer to the market to satiate the demand for fresh food.
It is also time intensive not just on the setup but also on monitoring and managing it. The pH and nutrient levels must be checked daily and one needs to ensure that plants are growing in exactly the conditions they need. For instance, in Aeroponics which is one of the techniques, if the misters don’t spray every few minutes due to power issues or equipment malfunctions or clean regularly, the roots can quickly desiccate.
Invariably, the margin of error is extremely small. Contingencies such as pump failure, lack of water storage can make plants die quickly. And if you grow at home, during events when you are traveling, etc. you need to deploy someone to manage and take care of the system or have remote monitoring capabilities which are still underdeveloped
The technology especially in India is still at a nascent stage and startups working in the space find access to the right people, equipment, and process challenging.
Growing also requires technical knowledge about different aspects of hydroponics which comes through sustained efforts. According to a founder, there is almost zero practical know-how in India about hydroponics even for people keen to know more about it and try it out
Behavioral shift is most important and will require patient concerted efforts from companies, investors, govt. to educate players and make urban farming cool and easy while conveying the health benefits
Summing Up
There is no Plan(et) B and the future depends on us. Growing population, shrinking land base & water resources, severe climate changes, and ensuing food shortages means that hydroponics is no longer a buzzword but a necessary reality in the years to come.
The pace of hydroponics research and its implications has accelerated in the past decade and will continue to remain on the upswing. Allied disciplines such as aeroponics and aquaponics are also becoming prominent with exciting green technologies. It will be interesting to see the evolution of hydroponics and the ensuing innovations crucial for commercialization and mass-scale adoption.
The future for hydroponics is bright and definitely appears to be the next growth frontier in agriculture
To check out other interesting startups working in this space: https://www.entrepreneur.com/article/341120
Image Credits: NASA, The Atlantic, YourStory, Pinterest, Steve McCurry Studios
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of any institute or organization he is associated with.
