- Hey, guys!
Welcome to another video!
Today we're gonna talk about the good, the bad,
and the ugly of container farms.
(upbeat music)
So right off the bat, let's talk
about what container farms are.
Container farms are a big term that describe
a few different kinds of farms out there.
Now the majority of container farms
are built inside of used freight containers.
And that's the thing that we're gonna talk about today.
However, there are some companies
that are building customized containers
that are more like prefabricated buildings
or grow rooms then they are a shipping container.
So that's an important thing to understand and to know.
This is kind of a hard topic for us.
Historically, we've kind of shied away
from it because you had customers in the space.
But we think it's time to have this conversation
because we've seen a lot of farmers failing in the space
and we need to be honest about what indoor farming is,
and what indoor farming isn't,
in order to really see this industry grow
and serve communities and serve this country
and our food supply the way we know it can.
(playful music)
So let's start off with the good.
So container farms have risen in popularity
because they are compact, they're contained.
You ship them in, you drop them in place,
they hook them up and you can get growing.
And so that has led to a widespread adoption
and a lot of people using these
to kind of get businesses started.
They're great because they are contained
and because are modular.
That is, they can be outfitted or manufactured
somewhere else then shipped to site and dropped in place.
That's really convenient for some people.
They're also small and compact.
So whereas you used to have to go out
and find a warehouse space
that's a certain size or something like that,
now you can drop one of these behind a restaurant.
So outside, right behind a restaurant,
it's compact, it's convenient,
it fits in a lot of different places.
And that also makes it a fairly convenient deal for folks.
(playful music)
Containers are also readily available.
So, historically, everyone's thought about
cheap spaces being the best space
and this is something we're gonna talk about
in the bad and the ugly sections of this.
They are inexpensive.
You can find used shipping containers all over the place.
There's entire companies that specialize
in trying to sell used shipping containers
because there's a huge supply of them.
When a refrigerated unit breaks down,
when the refrigeration unit goes out,
it's actually cheaper for the company
to scrap the container itself
than fix the refrigeration unit.
And for that reason, we end up with tons
and tons of used refrigeration units
or refrigerated containers on the market all over the world.
(playful music)
So another great thing about these,
and this kind of has to do with the modular,
is that the form factor is ideal for shipping.
So if you wanna manufacture these somewhere
and ship them somewhere else,
long distances on a container boat, everything,
the infrastructure, is all there to deal with it.
Now it does beg the question
of why you wanna ship a farm across the world.
But it can be said that these are very,
very easy to move from one place to another.
Everyone knows how to do it.
You can get almost any shipping company in the world
to come pick a farm up and move it.
If you're a farmer and you move a lot
or if you have a need to move your farm for some reason,
that can be a very convenient thing for you.
(playful music)
The other great thing about containers
is that there are a lot of companies
getting into the space, diving in,
and doing this type of work.
So over time, we're gonna see a lot more
value-focused companies kind of come to the space,
farmer-centric companies coming to the space,
competing with each other and driving costs down,
driving pricing down for everyone.
And I think that's almost always a great thing.
So that's the good.
Those are some of the good aspects of this.
Let's dig into some of the bad and some of the ugly
and a lot of these kind of cross reference each other.
So some of the good things also kind of have
some bad sides to them and so we just wanna
kind of dig into this and understand better
the constraints of container farming versus something else.
(curious music)
So the first big drawback is that containers
weren't designed to grow plants,
containers were designed to move
products all over the globe really, really efficiently
on boats, planes, trains, automobiles, whatever.
Containers are designed for that specific purpose.
They're not a general purpose product,
they are a very specific, specialized product.
And they're very, very good at what they do.
So here at Bright Agrotech,
we believe that intent informs design.
That is, as a designer, you always start
at square one and you try to design something
that is pointing toward this specific outcome.
And that's very easy to do when you start at square one.
It's much harder to do when you take
a product that's designed for something
entirely different and modify it in a way
that it allows you to do a very specialized thing.
And so this is one drawback of containers.
They do require a lot of work to make them work
as a plant-growing environment.
And even then, it will never be ideal.
It will always be a bit of a compromise
because, again, these are designed for shipping products,
not necessarily for growing plants.
(curious music)
As a result of that, environmental controls
in containers can be very difficult.
Now, let's be clear here.
There are kind of two types of containers out there.
One is the custom side which is growing very rapidly.
On that side, you have companies
like Modular Farms who is...
They're building out these things that almost
look more like prefabricated buildings and containers,
they're all custom-made for growing.
That's a very different situation
from growing inside of a cramped, used shipping container.
That's a totally different scenario if you've ever
kind of stepped inside the two different form factors.
With that being said,
environmental controls can be really tough.
Some of that has to do with layout,
which we'll talk about later.
But humidity control, because it is such a tight space,
applying enough heat or enough light
that you're not gonna overwhelm your facility with heat.
And basically going through all of the different
growing processes, you become more and more limited
as you consider growing inside of say a shipping container
versus a dedicated container or a facility
that's designed for growing.
(curious music)
So the other difficulty with containers,
and this is primarily shipping containers at this point,
if you're getting a brand new container,
this isn't going to be a problem.
If you're getting a brand new container
it might be in really good shape
but what we've seen is a lot of farmers end up
seeing their containers,
their used shipping containers, deteriorate very quickly.
Even so far as we've had some farmers
who have had their container condemned.
So the city has basically come in and condemned it,
they couldn't farm in it, they couldn't use it
because the roof was collapsing.
These containers live a rough life.
They're transported all over the world
and they're hit with saltwater and wind
and UV light and sun just constantly around the clock.
Sometimes for decades.
And so it's just really important to understand
how that affects the structure of the container itself.
By the time these things are sold off,
they're not sold off because they're usable anymore
as a shipping container, as a freight container, right?
They're sold off because they're
at the end of their lifespan.
So consider very carefully, inspect very carefully,
any used shipping container-type farm that is
built inside of that type of a product.
There have been a lot of farmers that have paid the price
for all of those years on the open ocean.
(curious music)
So the next topic is light and heat and light and layout.
So shipping containers are pretty tight.
Most of the time they're about
8 1/2 feet wide and about 7 1/2 feet...
No 7 1 /2 feet wide and 8 1/2 feet tall
and so what that means is that you're pretty condensed.
You have to grow in a pretty condensed space.
Now, horizontal, there's a lot of horizontal
systems out there that are pretty decent.
There are some vertical systems out there
that are pretty decent.
My favorite layout is actually very similar to a zip farm.
So basically where you have corridors
with lights down the corridors,
towers back-to-back in the middle
and towers along the walls.
And it gives you lots of air circulation
within that growing environment
and keeps those plants really healthy.
There are other layouts where towers are closer together,
facing each other, plants are kind of
growing into each other.
And in those layouts, you have to use
much lower-powered lights.
What does that mean?
Well there's a linear relationship
between the light that we put into an environment
and the biomass or the output.
So as we
As we put
light into the environment,
we see biomass over here and as the light increases,
we see biomass increase in an almost linear way.
What does that mean?
It means if we double our light,
we're gonna double our biomass
within the same time period for most crops
and within a certain range.
What does that mean?
Well that means that when you condense,
when you have these really tight aisles,
you end up with plants that can't quite...
You can't dump as much light into them
because you have this heat problem that starts to arise.
And because also, with LEDs,
your heat generation
is a function of the wattage that you put in.
So if you double up on lights, you double up on heat.
Typically.
And so this kind of becomes a problem
in setups that are super, super dense.
It's one of the reasons why spreading things out
and giving more space, more room for air circulation
allows you to put more lights in,
more efficient HVAC, more efficient air conditioning,
and allows you to grow a lot more plant material
per square foot or per tower.
Simply because you're able to apply more light.
(curious music)
So the next area that you need to think really hard about
before you purchase a container farm
is the idea of people in the environment.
Now there's two things here, one is just access.
So the ability to go in and to see your plants,
to be able to monitor growth, monitor pests visually,
and just keep your eyes on things really easily.
In this regard, I would recommend
visiting a variety of the container farms out there.
There's a number of companies,
they've got lots of customers kind of all over the place.
Or you can go to the headquarters, whatever.
And you can visit actual farms
and just kind of see how you respond to them.
Shipping containers, for me, are a bit too tight.
They feel very claustrophobic.
And putting all the environmental issues aside,
just working inside of that type of an environment
doesn't always feel awesome.
So make sure you try it out before you commit to it.
Because you're gonna be spending
quite a bit of time in there on a weekly basis.
Consider how you can access the plants as well.
So not just your own psychology,
your own mental health working in this tight, cramped space.
But being able to
walk up and down aisles and check on plants
becomes a really important thing.
Both from a plant health and management standpoint
as well as just kind of an enjoyment standpoint.
(curious music)
So the next thing we wanna talk about is the cost of a farm.
And my caveat here is that cheap is never cheap.
So when it comes to container farms,
a lot of folks really start to dig into containers
because they're very inexpensive,
they're cheap, they're really cheap structures.
You can get them a lot of different places
and you can get them very inexpensively.
Well, in my experience, cheap is not
always the best way to go.
I've gone cheap a number of times
and it's typically bit me.
Now you can make do with cheap
but what you're doing there is you're transferring
a lot of your CAPEX, or your initial capital expense,
out into the future in the form of operational expenses.
It means you're gonna have to do more work down the road
to keep everything on the rails
rather than spending more money on something
that's a little bit different upfront
that requires less maintenance in the long run.
This is my biggest concern with shipping containers,
used shipping containers as a whole,
are that they typically are well-used
and they don't stand up really well in the long-term
compared to something that's dedicated
and designed for growing.
(curious music)
So the next idea is the idea of comparative output.
Now this is the idea that your output
isn't just judged on the basis of your output
and what the market will absorb.
But it's also based on the output of people around you.
This space will be more competitive over time
and so it's important to understand
how you stack up against your competitors.
It also introduces this idea of dollars of CAPEX
versus
per pound of output.
This is a really important thing to understand
because this is kind of a fundamental metric,
there are lots of them out there.
But the idea is that there are some numbers
that just become crystal clear
that tell you whether or not you're spending your money
on the front end wisely.
This number here.
How many pounds on an annual basis
your farm will produce.
Not heads, don't talk about heads of lettuce,
don't talk about numbers.
Anything but this number.
Pounds of output.
That is the most truthful thing
that you can focus on at the beginning
because most customers ultimately won't
be purchasing on a head basis.
Not if you're trying to sell them teeny, tiny little heads.
You need to be selling them something
that is a market equivalent, right?
Now some growers can go out and get great pricing right now.
And that's fine but you have to be thinking ahead
to what a more competitive market looks like
and be preparing for that.
So know this number, put this together.
You know, if your farm costs $90,000
and will put out 2000,
2000 pounds per year,
but you have an opportunity to buy something
that costs, lets say 150% this.
What is that?
That would be like $135,000.
Right?
But it puts out
4000
pounds per year.
This is probably a better investment, right?
I mean, you still have to understand OPEX,
this is overly simplified.
But this is going to be a better investment than this.
So know your numbers really well
and be thinking really hard about this number here
and make sure you're centering in
every single conversation on pounds of output.
If you're a producer, that is critical, critical, critical.
I don't care where you're at,
I don't care what you're growing with,
whether you're in a warehouse,
whether you're in a greenhouse,
whether you're in the field,
or whether you're in a container of some kind.
Pounds of output are the only thing that matters
in respect to the dollars in CAPEX and OPEX.
So I hope you've stuck with me through this video.
I know it's kind of a bit of a longer one
but I think it's an important starting point
for conversation around the different
kinds of containers out there
and their value in the indoor farming space.
A lot of the time, they're super useful
for very specific applications
and not very useful for others.
And one thing that we wanna encourage everyone to do,
because we don't wanna be super negative
about these kinds of things.
We want everyone to just go out and do their own research
and come to their own conclusions on this.
But the critical things here are really coming down
to this CAPEX per pounds of output number.
Don't talk heads,
don't talk about output in anything but pounds.
And if you center it in on pounds,
it allows you to find out the truth
around the productivity of these farms very, very quickly.
And helps you as the farmer, you as the grower,
make the best possible decision
when it comes to buying a farm or implementing a farm.
So the big takeaways here
are always get it from the horse's mouth.
Every company out there, every reputable company,
is going to encourage you to talk
with the people who have succeeded
and the people who have failed with their products.
Talk with both.
Don't get a one-sided approach to things.
If you're talking with the people who have failed
and the people who have succeeded,
you're gonna get the full picture, the whole story.
And you need the whole story to make the right decision.
The other thing is to focus in on pounds.
So total production, all right?
And especially this number, dollars of CAPEX,
or dollars of CAPEX and dollars of OPEX.
It doesn't really matter.
You should be combining those,
thinking about these in whole and not just one at a time.
But really zoning in on something like
dollars of CAPEX per pounds of output.
Pounds, pounds, pounds.
And if you're thinking about it in this really rigorous way,
it's gonna help you make the best decision
when it comes to the farm that you choose.
Whether that is growing outdoors,
growing in a greenhouse,
growing in a warehouse, or growing in a container.
Whether it's a used shipping container
or whether it is a dedicated custom-made,
ground-up type container that is being produced now.
So the last thing is to make sure
that there is a clear understanding
of the differences between a prefabricated,
or custom-fabricated container,
and a used shipping container
that's been retrofitted to try and grow plants in.
As the consumer, you need to think very carefully
about this one versus that one
because you're gonna be spending a lot of time there
or you're going to employ people
that will be spending a lot of time in there.
And output, as always, is a huge concern
for you as a grower.
You need to be maximizing your output
and maximizing your economics.
In conclusion, thanks so much for watching!
Let's continue the debate in the comments below.
Whether you agree or disagree,
your opinions, your experiences, your thoughts matter a lot.
Our goal is to move the industry forward
and part of that is helping farmers make the right decisions
around the equipment that they choose to set up
to get their farms started.
And to be economically viable in the marketplace.
(upbeat music)