This interview details AmplifiedAg, an indoor farming company based in the United States. The interview is with Don Taylor, CEO of AmplifiedAg.
What is the origin story of AmplifiedAg?
AmplifiedAg was established in 2016. With a background in the software industry, I am a seasoned professional. In my previous role, from which I departed in 2015, I served as the chief technology officer for a SaaS-based benefits management platform. Around 2012, we underwent an IPO, and throughout that period, I orchestrated the development of a substantial engineering team in India. This led me to frequently travel to India, granting me an intimate understanding of the challenges faced by their farmers and the broader environmental and land issues of that area.
This exposure directed my focus toward these matters, which had not occupied much of my previous contemplation. As I delved deeper and considered leaving my then-current position, I began immersing myself in the industry. I soon recognized that Controlled Environment Agriculture (CEA) presented a substantial technological opportunity. The rapid realization dawned upon me that, throughout the past century, pivotal shifts in technology have occurred. One of the most significant shifts of modern times, from a technology and humanitarian perspective, is the introduction of controlled environment technology. The capability to produce food on a scalable, reproducible basis, that ultimately can become sustainable and can evolve with the planet’s growing populations and the need to re-localize and safeguard the agricultural infrastructure.
The prospect of contributing to this profound and complex technological advancement was an incredible opportunity and that is why AmplifiedAg was founded.
The mission of AmplifiedAg is to modernize and localize agriculture for farmers and communities, so we’ve developed a highly efficient indoor farming platform that includes fully integrated, high-performance container farms with proprietary embedded environmental systems such as fertigation, LED lighting, IoT control system, and a SaaS-based farm software application that manages the farm and the surrounding supply chain. From our years of operating the farms and technology, we’ve rapidly evolved the production capabilities. Therefore our farms are designed to scale rapidly to support a meaningful and manageable production capacity.
We provide the full platform of scalable container farms to third-party CEA farmers, food suppliers, and ag researchers. Outside of the container farms, the hardware and software systems are utilized independently by existing vertical farms and greenhouses.
What are some of the biggest challenges facing your team in the future?
Starting and running a company can be challenging, especially in the realm of cultivating plants and producing crops on a large scale. The initial focus was on perfecting technology to grow plants suitable for retail placement, ensuring uniformity in plant quality and output, even at scales of hundreds of thousands of pounds of produce every month.
This initial phase was an invaluable learning experience. As we dived deeper into our venture, our ambition to bring about a paradigm shift that also revolutionized the supply chain became evident. Traditional methods within the produce industry had remained virtually unchanged for the past century and a half. The process of moving products from farmers to distributors and eventually to large-scale brands and retail outlets followed a set pattern. Introducing a growth mechanism right at the point of consumption disrupted this pattern profoundly. This endeavor also brought to light the challenges we now grapple with in the Controlled Environment Agriculture (CEA) industry as a whole.
One significant challenge was determining the appropriate scale for our facilities. Overshooting the demand for a specific region would necessitate product transportation, thereby triggering a cascade of complex logistical and economic issues. Understanding the right scale aligned with demand proved to be a formidable and enlightening lesson.
Moreover, the broader context of the past few years added layers of complexity. The backdrop of the global pandemic and its aftermath significantly impacted the landscape. Escalating prices and labor shortages further compounded the difficulties of launching a pioneering business that aimed to contribute to a significant paradigm shift.
As we navigate these complexities, the resultant market is somewhat chaotic. Capital availability has dwindled, particularly within the Controlled Environment Agriculture sector, an emerging technology field that has experienced its share of challenges. This phase is often likened to the "trough of disillusionment" or, as I prefer to term it, "Crossing the Chasm." The adoption curve for such technologies is gradual, necessitating patience. The industry has traversed a phase of substantial capital infusion, but now our focus has shifted to optimizing economic efficiency and the most precise methods for delivering our farming model and produce.
What is unique about AmplifiedAg compared to competitors?
When comparing our achievements to others, I identify a pivotal factor that contributed to our success. We strategically engaged in managing large-scale farms for a considerable duration. This deliberate approach compelled us to adopt a focused lens on technology efficacy. We meticulously evaluated whether our technology functioned as intended, meticulously planned internal farm processes, refined unit economics, and identified areas requiring enhancement to ensure viable unit economics. This emerges as a foundational aspect of our journey.
Coming from a background in the software industry, particularly Software as a Service (SaaS), I brought forth a mindset akin to enterprise software. Our entire software infrastructure and developmental approach were designed to accommodate multiple tenants, expecting numerous clients to utilize our technology. This multi-tenancy principle extends throughout our software stack. Additionally, we opted to exercise comprehensive control over our technology stack. This encompasses self-constructing electronics, software, and embedded systems.
Our recent expansion into manufacturing our own lighting systems further bolsters our competitive edge. This strategic decision translated into heightened agility, allowing us to progress the technology rapidly. Our engineers' involvement in the farming process during the farm operations phase empowered us to swiftly make adjustments to every facet of the farm. This dynamic ability to modify each component significantly contributes to our current position of technological excellence in operational efficiency.
How do you measure the impact of your company so far? (Revenue, Employees, Customer Quantity, Production Volume) etc?
We have successfully developed and deployed approximately 200 containers into production. Our journey began as a farming manufacturing company, but our focus has transformed. Initially aimed at selling the technology, we have evolved into a farm operations company that circles back to our original goal of being a technology provider. Over the past 12 to 18 months, we have engaged in various deals across the United States, establishing farms in locations such as Alaska, Boston, New York, and Georgia, among others.
A significant achievement has been the selection of our technology by the USDA-ARS for their CEA Center of excellence in Charleston. This partnership involves experimenting with diverse crop types and addressing potential challenges within Controlled Environment Agriculture (CEA). In Charleston, they are operating 16 vertical farming labs, and cultivating a wide array of vegetables and other higher caloric crops This aligns with our overarching vision of producing crops with higher protein content. While lettuce is valuable, our ambition extends to nourishing regions worldwide that require sustenance. Hence, demonstrating our capability to cultivate a range of crops becomes crucial.
The USDA's current research spans lentils, broccoli, and even rice cultivation in a few container farms. This strategic expansion is pivotal to our overall growth strategy. It substantiates various facets of our approach and reinforces our commitment to innovation and sustainability.
Do you expect to be supporting other crops or another crop in the near future?
We're currently exploring various crop types. The primary focus lies in demonstrating the economic viability of each specific crop. The USDA plays a pivotal role in this aspect. They're not only a significant influence on us, but they also cultivate a range of crops based on external requests we observe. We receive numerous inquiries about mushrooms and microgreens, which fall within the same category of interest. However, the real breakthrough will occur when we successfully establish a high-protein product that can be cultivated and distributed on a larger scale. The timeline for achieving this could be anywhere from six to twelve months, but that remains uncertain at this point.
What have you learned that you wish you knew when you started the company?
One of the key observations is how challenging it can be to cultivate plants indoors. Initially, I had a rather simplistic view when I embarked on this journey. I figured, how tough could it be? You provide water, light, nutrients – and there you go. However, once the notion of scaling up the operation and producing a consistent yield of 2 million pounds annually enters the picture, the complexity becomes evident. This difficulty holds true whether you're attempting cultivation indoors or outdoors. This sentiment is shared by traditional farmers, who can attest to the magnitude of the challenge.
Delving deeper into the industry, comprehending its broader landscape and the intricate interplay of economic dynamics becomes paramount. Understanding the inner workings of the retail sector, particularly in the context of produce, reveals the contracting mechanisms that tie California farmers to major brands. These contracts provide a degree of purchase assurance over a specified timeframe due to the substantial scale at which they operate. The harvested product then flows to the brands, where processing and distribution occur. This facet eluded my understanding initially. I now recognize that penetrating this market is an immensely formidable task.
The intricate dance of logistics and supply chain intricacies, magnified by the sheer scale, further underscores the challenges. As an industry, we made an oversight in initially underestimating the colossal scale. Traditional farmers, too, echo this sentiment – the scope is monumental. The question arises: can indoor cultivation truly match this scale?
Consequently, my perspective has shifted throughout a cyclical learning process. Initially, I believed in the need for small farms localized to consumption points. However, as I delved deeper into the intricacies, a shift towards large-scale operations seemed necessary. Now, I find myself returning to the notion that, at least in the short and midterm, the optimal model for CTA is to position the product as close as possible to consumption points. This strategic maneuver aims to eliminate transportation complexities, maximize sell-through rates, and minimize overall intricacies.
How can people connect with you or learn more about AmplifiedAg?
To learn more about AmplifiedAg, people can visit our website at www.amplifiedaginc.com.
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