Scaling the World’s Largest Urban Vertical Farming Network
In a conversation with McKinsey, Infarm CEO and cofounder Erez Galonska shares his passion and vision to change the way people eat and reflects on his learnings from bringing the Infarm food-production concept to 50 percent of the world’s largest food retailers.
Jerome Königsfeld: Today, Infarm is an international business with more than 900 employees operating across ten countries. Take us back to 2013, when you started the business together with Osnat Michaeli and your brother Guy Galonska. What was the motivation behind launching Infarm?
Erez Galonska: I have always been fascinated by self-sufficiency because, for me, it ultimately means freedom. So in late 2004, I started to explore what it really means to be self-sufficient. I looked at everything from how to become energy and water self-sufficient to growing my own food.
In 2005, I started traveling between different communities and was doing work in exchange for lodging. I did many types of manual work on farms, ranging from picking mangoes to growing vegetables. At the peak of this journey, I lived on a mountain in the Canary Islands and was living completely self-sufficiently.
Never lose sight of your north star.
To unlock future growth, an organization must be willing to change and adapt.
During this time, I became obsessed with growing my own food and saw that it allowed me to try more interesting varieties that don’t make it through today’s industrialized supply chains. When I moved back to Berlin, I asked myself, “Why can’t I take my farming with me? Would it be possible to grow my own food without soil?” When I did my research on this topic, I encountered two things: 1) there was a group of people who already farmed without soil as part of a movement called hydroponics, and 2) I saw these utopian pictures of plant-covered skyscrapers in cities, which gave me confidence that I could change the way we source and eat food. This became the driving force to build Infarm.
Early on, my brother and I built our first hydroponic farm in my parents’ living room, growing large green basil. When this proved successful, we asked ourselves how we could turn this into a business.
Jerome Königsfeld: How did you set up your first commercial farm?
Erez Galonska: We spent a year researching; you have to imagine hydroponics as an umbrella for lots of different techniques that we had to learn about. The outcome of this was that, in late 2016, together with a set of designers, mechanical engineers, and craftsmen, we built our first commercial farm in Berlin in Neukölln.
Setting up for success. Organizations require a strong purpose to manage the hardships of business building.
This first commercial farm also helped us to attract exceptional talent who were inspired by our purpose. At our food lab, future employees could experience for themselves the potential of Infarm to change the way people eat: having access to fresh fruits and vegetables grown near the point of purchase without pesticides and customized to local diets. This shared purpose helped us through some early hardships, when we had little funding and could barely pay our first employees. Our purpose kept us motivated to keep going.
Jerome Königsfeld: How did you make your first customers aware of Infarm?
Erez Galonska: We installed farms in caravans and put them into Berlin’s Prinzessinnengarten, which is an urban gardening project. We held workshops educating people about urban farming, which created awareness and a community of followers around the Infarm concept.
What is vertical farming? Vertical farming is the practice of growing crops in vertically stacked layers. It often incorporates controlled-environment agriculture, which aims to optimize plant growth, and soilless farming techniques such as hydroponics, aquaponics, and aeroponics, It involves growing plants indoors, It’s sometimes also known as indoor farming. Instead of sunlight and rain, vertical farms use LED lighting and controlled growing and nutrition systems, etc.
Our first customer was somewhat unexpected: 25hours Hotel, an international hotel chain in Berlin. An architect visited our urban farm and was immediately excited to bring it to 25hours Hotel, an opportunity that we hadn’t thought of before. We visited the site, and then started doing research into how we could best bring our concept to the hotel chain. There had been success in growing plants on skyscraper rooftops, which gave us confidence that we could do the same with food production. We built a farm on the hotel’s rooftop and called it the Sky Farm. Word quickly spread, which helped us reach more customers.
Jerome Königsfeld: What is the business model?
Erez Galonska: We call it “farming as a service.” Retailers sign a multiyear contract with us defining the capacity they require, and we then install the required Infarm modules to meet demand. Our farms are designed especially for urban spaces, ranging from formats that can fit in a typical fruit and vegetable aisle to those developed for our large-scale, high-capacity Growing Centers, containing individual farming units each capable of producing the equivalent of 10,000 square meters of produce. This allows us to easily scale production for retailers of any size, whether they are serving a neighborhood or a national retail network.
The Infarm modules remain our property. We receive income per harvested plant. Our employees take care of the farm, including installation, cultivation, harvesting, and maintenance. All farms are controlled remotely; Infarm employees visit farms as needed to plant new seeds.
Jerome Königsfeld: How do you see the future of agriculture in general?
Erez Galonska: There is a massive transformation happening in agriculture right now. Technology and software allow farmers to use fewer resources to generate more yield. This is becoming mainstream.
Agriculture, from our perspective, is returning to its roots. I think that one of the biggest powers of technology is that we can again grow food where it is consumed.
A second big trend is the personalization of farming. Today, agriculture operates according to a push concept. Companies cultivate the crop and then try to get it to the consumers. At Infarm, we do the reverse, and this is where it becomes interesting. We leverage data to understand customer preferences and then grow the crop accordingly—we call it “personalized farming.” The future will be micro farms that cultivate crops based on households’ taste profiles, diets, and health needs.
We’re part of this movement of bringing farming closer to the consumer, all while being more resource efficient as well. Read the full article in McKinsey Digital.