A solar-powered, small-scale vertical farming model developed in Perth two years ago has already set up shop in Adelaide and is pushing the envelope of the sector's mainstays of leafy greens, experimenting with crops ranging from mushrooms to native herbs such as saltbush.
Co-founded by husband-and-wife duo Julia Prichodko and Christian Prokscha, Eden Towers has raised $1.5 million since its inception as well as a further $3 million in equipment financing to support upgrades in WA and SA, while a crowdfunding expressions of interest (EOI) campaign has been launched on Swarmer to fund eastern expansion.
Australia may have agricultural land and sunlight in abundance, but the founders of Eden Towers are convinced that the low water and carbon footprints of vertical farms close to markets, in addition to high yields, make the business viable.
And while electricity costs have slashed the industry's margins elsewhere with companies like Future Crops in the Netherlands going bust, Prokscha believes the rooftop solar proposition in Australia actually makes vertical farming "very cheap" from an energy standpoint.
"We don't need vertical farming in Australia that much."
This was a common response for the Eden Towers co-founders nine months ago when they were seeking a more traditional capital raise from venture capital, private equity and family offices. At that time their pilot model was already operational in Perth, and they wanted to build large vertical farms that required $6 million per facility.
They had raised $600,000 in a Birchal crowdfunding campaign in mid-2021, and as a result of a cold call pitch from agronomist Santiago Insaurralde - formerly a greenhouse supervisor for one of Australia's leading fresh produce companies Perfection Fresh - had set up a trial farm in Adelaide.
But their shoots of growth appeared to have hit a financial ceiling. Prokscha admits this was disappointing, so the whole approach required a rethink.
"We weren't very successful [raising money] in Australia. A lot of people saw us as, 'well, you're just a vertical farmer'," he explains.
"Where we were heading in terms of the capital raise we did have some parties that were interested overseas, but it just took a little bit too long.
"So we decided to look at a strategy where we go a little bit smaller, still with commercial scale farms, but with smart structuring so we can get it across the line without having too much debt on our books."
How this looks in practice is growing the crops either within a small building or a container, with an upfront investment of $100,000-$150,000, first producing enough to tickle the palates of potential customers before locking in long-term sales arrangements with wholesalers and restaurants. Today the company has four major customers - three in Perth and one in Adelaide - that have $6 million worth of annual sales booked in.
Eden Towers is currently moving to a bigger site in Perth, from its site in Malaga which is producing just 1.5 tonnes a year to the Food Innovation Precinct WA where it will start operating with a production of capacity of 10 tonnes a year capacity in June, with that yield set to triple by the end of 2023 with the installation of new equipment.
Meanwhile in South Australia, the group is producing around three tonnes annually from its site in Wingfield, but in November or December it will go live at a new facility in Pooraka with a 20 tonnes per year production capacity.
"Each farm makes about $2.5 million and there’s another $1 million contract for the mushrooms that we’ve got ready – we just need to start building these farms to then be able to supply those volumes," Prokscha explains.
The entrepreneur, who is passionate about supporting a more sustainable food system, says crop diversification has also been a big part of Eden Towers' philosophy.
"We were always from the start looking at what else can we grow because it’s quite easy to grow the traditional crops like leafy greens, micro greens and herbs in a vertical farm, because the technology does a lot of the thinking for you," he says.
"But where we started to move into was the indigenous crops because we formed a relationship with one of the indigenous social enterprises called the Winjan Community; we looked at if we could grow indigenous crops for food initially, and do a mixed salad of your normal spinach with say, a Warrigal green or saltbush, and that would be something unique in the market.
"We started playing around that, and at the same time as we were doing the diversification, we got asked by the local shire down there ‘can you do non-food crops like bushes and shrubs and trees?' So we started doing some analysis, and realised that there’s a huge market to do non-food crops for revegetation, rehabilitation or even carbon planting. So we started going down that direction of the Australian native species."
It was around the same time as trials were taking place with indigenous crops that Eden Towers was approached by a wholesaler looking for mushrooms. The team's initial thought was that it wasn't possible.
"We tinkered around a little bit and put some new technology together that started growing these mushrooms quite well, also in a controlled environment so we don’t have to worry too much about what’s happening outside," Prokscha says.
"We put that technology together and now we're building a commercial scale farm for mushrooms for the wholesaler as they accepted our crops and what we're doing in the mushroom world."
But the diversification didn't end there. Prokscha notes Eden Towers has struck up a partnership with a UK-based alternative protein company, with plans to flavour its products with vertically farmed herbs and leafy greens.
"This way you get a better taste and it's a different concept," he says.
"In the next three to six months we're probably going to be rolling out a product that's an alternative protein like chicken or pork, flavoured with our leafy greens and herbs.
"At the same time we're also further looking at diversifying into a dairy-free cheese, so in the end we become a bit of a full-food company that can not only sell leafy greens and herbs or alternative proteins but we can sell a ready-to-eat full package to our customers as well and potentially to the direct retail market."
Now the company is ready to replicate its model on the east coast of Australia, and has turned to Adelaide-based crowdunding platform Swarmer to help fund the initiative.
Swarmer's managing director Roseanne Healy believes Eden Towers' mission to support cleaner, healthier and more accessible fresh produce at better price points is the future of food.
"Swarmer is really pleased to support Eden Towers with their equity crowdfunding campaign to raise up to $1.5 million and encourage everyday investors to take a stake in this innovative future food company," Healy says.
Co-founder Julia Prichodko says the group is thrilled with its success to date with "phenomenal" demand.
"However like any business you reach a point where you can get there faster with a capital injection, to push even harder and grow your success," she says.
"We know the groundswell of support that is building each day with Australians looking at alternatives to support more sustainable choices. Swarmer is providing us with the platform to provide an opportunity for people to invest in the future of sustainable food."
Prichodko highlights the Eden Towers model uses 98 per cent less water than an open-field farm, uses renewable energy, is carbon neutral, and involves no harmful toxins or chemicals in the growing process.
Santiago Insaurralde, who also has a share in the business, explains the global vertical farming industry is growing by 30 per cent every year.
"By 2030, the entire industry will be valued at over $50 billion. In Australia though we are still early in our vertical farming journey so there is a real opportunity to join a first-mover that is Eden Towers," he says.
Finding an energy-efficient vertical farming model
Prokscha explains that despite the significant growth in the pipeline for the industry globally, making the business work in Australia requires a unique approach.
"Australia is a very big country. I would see it as similar to kind of the US and what's happening there in vertical farming. However, our population is still very small, so trying to replicate the model of what's happened internationally here in Australia is not going to work," he says.
"We always felt that a vertical farm in about a 1,200-square-metre building where you're producing between 150 to 200 tonnes of crop at the big commercial level, for us is the right size.
"When we started looking at it we realised that a lot of the power that's needed to run this facility - around 50 to 60 per cent of our power requirement - can be gotten from rooftop solar, so from an energy strategy perspective that becomes very cheap."
He says Eden Towers has negotiated a "very good tariff" at the Food Innovation Precinct WA where there is a captive solar farm, while in Adelaide the company is working with a startup called The People’s Grid which is "able to source renewable energy at a lower price than what you pay the tariff on the market".
"We’ve actually built a model where we can still sustain our production for the foreseeable future, and still make good money because our cost of power is low," he notes.
"And more importantly, our power is sourced from renewable energy so it also helps significantly on our carbon neutrality kind of vision that we have."
Prokscha also espouses the energy efficiency benefits of the smaller vertical farming model as well, as larger 10,000sqm sites need much more power, especially if they are highly automated, which implies higher capital costs too.
"A lot of those need megawatts as an input, whereas ours only need 0.25 to 0.4 megawatts of input power," he explains.
"Another way to look at it is to build a robot that does something that a human can do, you're probably spending anywhere from half a million to a million bucks, and then that robot needs to operate as well.
"For us, we've decided that instead of automating everything where we'd only need one or two people, we'll tick with four or five people but we don't have to spend the extra money on capital for a robot, and neither do we need the extra power to run all this extra machinery."
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