S7E91: David Farquhar / IGS - Crossing the Chasm & Converting CEA Hope Into Proof & Belief

[0:00:00] Harry Duran: Special thanks to our title sponsor this season Igs founded in 2013, Igs develops Industry 4.0 solutions in the global AG tech and commercial lighting markets. As an industry innovator, they make revolutionary controlled environment growth products. For more information, visit Intelligent Growth Solutions.com.

[0:00:19] David Farquhar: I am not a fan of the phrase a new normal. I do think that we need to be flexible though, and I think that we've probably learned to do several things in a different way, and that's good. But I am keen to see people actually socially get back together again as soon as it's safe.

[0:00:53] Harry Duran: Welcome to the vertical Farming Podcast. Weekly conversations with fascinating CEOs, founders and AG tech visionaries. Join us every week as we dive deep into the world of vertical farming with your host, Harry Duran.

[0:01:08] Harry Duran: Vertical Farming podcast. Welcome back. Episode Twelve. We are in the home stretch as we wrap up season one. Thank you for everyone that's been listening to the show since episode one and the feedback that we've received, it's been so positive and so supportive and really lights a fire under me to keep continuing it and to keep up with season two, which is already in the works. So excited to bring you a whole new round of episodes from some fantastic founders in the vertical farming and indoor AG tech industry. If you're new to the show and this is your first episode, it's the one where we interview fascinating CEOs and founders of the leading vertical farming companies from around the world. In case you missed it, last week we had a great conversation with Alex Tink of Fork Farms, learning a lot about how he started the company and the inspiration that kept him going through COVID, and it's really a compelling episode. I highly recommend you check it out. Episode Eleven. This episode is also brought to you by the Vertical Farming World Congress. This inaugural event will bring together vertical farming operators, investors, retailers, technology suppliers, advisors and experts to debate and help advance the sector's future. The dates for the conference are September 22 through the 24th and it's going to be a virtual event. We're really excited to partner with the conference and the lineup is a who's who in the vertical farming industry. There will be speakers there from 80 acres.

[0:02:35] Harry Duran: Farms aero Farms bowway Farming growing underground. Intelligent Growth solutions. Jones Food Company let us grow root. AI square roots. The circle ons farms. Vertical future. Yes. Health association heads and academics and nutrition experts from Germany, Japan, the Netherlands and Turkey. It is indeed going to be a global event. Investment experts from AG Funder and Ashford's and Innovate UK and S 2g Ventures. It's clear that the team has pulled out all the stops to make this a landmark event for the vertical farming industry, and we're excited to participate as a partner. Attendees will have access to extensive networking opportunities, interactive discussions, instant chat, one on one video calls and you'll also be able to log into the platform days ahead of the event to build your profile, plan your agenda and begin networking. For more information, head on over to Zenithglobal.com Eventsvfwc 2020. We'll also have a link to that in the show Notes. This week we have David Farquhar back for a return engagement.

[0:03:40] Harry Duran: David was kind enough to kick off season one on our first episode of the podcast. He's the CEO of Intelligent Growth Solutions. Igs. In this episode, we dive a little deeper into what Igs has been up to since we last spoke. We talk about the amount of science development, processing power and scale that goes into AG Tech and what Igs is currently doing to give back to the community. Amidst COVID, we touch on the importance of promoting awareness among the next generation and educating them about the opportunities that Vertical Farming provides. We talk about some new models in AG Tech that are likely to manifest over the next few years. And David speculates on the future of technology development igs and shares some of the work they're doing on the weather and climate management front. It's really fascinating stuff. Remember that if you enjoyed this episode or past episodes. I'd love it if you leave a rating and a review@ratethispodcast.com. VFP okay, let's jump into this conversation with David. So, David, welcome back to round two of the Vertical Farming podcast.

[0:04:42] David Farquhar: It's really great to be here and I enjoyed it last time. The folks in our company enjoyed the style of it. A lot of our customers commented on it as well, so it's obviously something you're very good at. Harry, thank you.

[0:04:54] Harry Duran: I appreciate that. Do you think it was something about the nature of the timing of the interview? Because we were just checking on the dates. It was March 26 when we had that first conversation, and as a global phenomenon, we were going through just understanding what was happening with COVID and people were trying to figure out what the world was going to look like. So I think people were looking for connected conversations and connecting with our fellow human beings at a time when it felt like we were going to be disconnected from people for an extended period of time. I'm wondering if that might have been part of what people were resonating with.

[0:05:36] David Farquhar: I think it could well be, and I think that certainly in this country, a lot of people are fretting about Brexit. There doesn't seem to be a really clear path, and that is going to have a big impact on our food supply chain. But I think the effect of the lockdown probably really made people reflect on how are we going to feed ourselves. And I think it's also oddly focused people's minds on the whole climate change debate as well. With a lot less pollution because of a lot less transport. There's been some amazing imagery. One that sticks in my mind are photos of the Himalayas from Indian cities where you've not been able to see the Himalayas for, like, 50 years. And it's not just India, of course, but lots of parts of the world because of the much less transport. And people, I also think valuing the ability to get out, get some exercise, get into a green space and sort of maybe reflecting on the fact that, gee, didn't we take this for granted before? I really think there could be a number of factors at play here.

[0:06:45] Harry Duran: Yeah, I agree. I think and people are reevaluating even things like the need to be in the same location for work to get done for what was possible, when we're in the same room with people and thinking maybe that wasn't possible in a remote environment. And it's almost like the grand experiment, whether you wanted to or not, as an organization, everyone was forced to test out this theory of what can be done remotely, how much progress we can do as companies and as business leaders. And so I'm wondering in the time that since we've had our last conversation, which was March, and now as of this recording, we're in August, how have you thought about running an organization differently than you may have thought was possible pre March?

[0:07:32] David Farquhar: Yeah, that's an interesting question, and it does come up a fair bit externally and internally. We live in an industry which employs lots of very different kinds of folk. People who really do need to get face to face, like salespeople. Trying to close a deal with someone, even on a video call, is just somehow not the same. Maybe there are new techniques that will have to be developed, but it really isn't the same. But then there are other jobs, like software engineering, where a lot of the time you don't really have to be face to face. But my opinion is, even there, there are just some things that happen better when you can look someone in the eye or you can look round a room. And that sort of group thing is certainly something people have not cracked. I am looking forward to going to my first face to face meeting in which someone just does this. So we have an interesting thing. We raised our series a money between June and September last year. So by the time we got to our Christmas end of year All Hands event and then Christmas party, we'd been building the team up for about three or four months, and we'd gone from eight people to about 35, 40. And we then built more into March. And we're just starting to recruit again now. But at that Christmas All Hands, one of the most positive bits of feedback we got was that people really loved the fact that they could work when they wanted and where they wanted.

[0:09:08] David Farquhar: So as a business, we were already trying to be as flexible as we could to accommodate people's circumstances. Some people had a more difficult commute to the office than others. Some people just feel more productive at home and to be honest with you, these days, we should worry more about the outputs than the inputs. We're not standing there with a damn stopwatch checking folk in, there's really no need for that. The feedback I'm getting is that we're in different teams where maybe between 85 and 95% productive. I suspect that nobody would really put their hand up and say that they are 100% productive compared to where they were. Although I would have to say the output from most of our team has been spectacular anyway, so they may well be more productive than a lot of other businesses, but I think everyone would put their hand in the heart and say, yeah, you know what? It's been harder. Everyone's done their best, but it has just been harder. So I am not a fan of the phrase a new normal. I do think that we need to be flexible, though, and I think that we've probably learned to do several things in a different way and that's good, but I am keen to see people actually socially get back together again as soon as it's safe.

[0:10:29] Harry Duran: Yeah, I think we're all trying to figure out when that's going to happen and I think there's not going to be a hard set date when everything is magically switched back to the way it was before. And I think companies that can acclimate to a sort of hybrid way of doing business between now and then, I think, are the companies that are going to have the most success. What have you seen or what's been the feedback from your peers in the space on how they're handling it?

[0:10:53] David Farquhar: I would say that indoor agritech in general has benefited more than it has lost from this pandemic, because I think everywhere in the world is really reevaluating how it sources its food. We have this additional burden of brexit here in the UK. Every part of the world that we've been speaking to, people are thinking about deglobalization relocalization and how that's going to just make things a bit more secure, a bit less dependent on other areas. And in most climates, that really does mean having to move stuff that you can move economically and environmentally indoors, and that's tougher in some places than others, but I think it's causing everyone to look much more seriously at the viability of indoor AG in general, whether that's aquaculture or livestock. I've even seen a report on the potential to grow cereal indoors, which is something we've been looking at. So there's all kinds of stuff and certainly from our point of view, if you think about urban spaces, which is obviously where the concentration of population is, space is at a premium. And therefore having a technology which is delivering super high levels of yield and quality per square meter is enormously important because space is going to run out if we keep building more and more single story structures.

[0:12:19] Harry Duran: Yeah. And I think what's important is, prior to David, igs had a whole slate of initiatives that were planned. And can you talk a little bit about how, for lack of a better term, the show must go on? And so you must continue to innovate and you must continue to bring some of these new innovations to the market, maybe at a different pace and different in the way that you had thought of prior to COVID. So can you talk about some of the new innovations that you've had to keep working on and bring to market since then?

[0:12:49] David Farquhar: Certainly I would say from a technological point of view, the single biggest area that we've managed to make progress on is with the sort of air based elements, the ventilation based elements of climate control. I think if people put their hand on their hearts and were honest with you in this sector, they would probably admit that once you've cracked the lighting, the power, the automation and handling and the irrigation, the thing that is left on the table that is the toughest nut to crack is around the area of ventilation and whether that is near field stuff. I mean, obviously there are very, very different physical structures to indoor horticulture. But for us, we think about, as you know, we think about things at a tray level. So a six meter square tray and these trays are stacked up inside our nine meter high towers, so 50 in each tower and you're putting a living, breathing organism or thousands of them inside a metal box. And so eventually something that is organic in behavior is going to hit something that is mineral and they're not the happiest of bedfellows. So dealing with the heat, the humidity, the mix of gases, that's an incredibly tough area. And one of the things that Coronavirus did right at the start when everybody went into mega lockdown was, well, we just had to stop work, we had to send people home. And as we said earlier, if you are a salesperson, that's tough. If you're a software engineer, it can be easier to deal with. But if you're a hardware engineer and you can't get your hands on your kit, that's really tough to have any kind of an impact at all. Yeah, so we kind of work within the rules, we work with governments and we looked at so how important is this that we keep moving this forward? What can we do that we can do safely within the regulations? And we figured out a way of dividing our team into two halves. So part of our development team, hardware team, R and D team, had relatives or very young kids or some circumstance that made it probably too risky for them to come to work.

[0:15:10] David Farquhar: So we did put a small number of folk, just about four or five, on furlough and they actually, I think, were okay about that because they recognized the challenges that would potentially create for their families. And then what we did with everyone else was we put really stringent cleansing and distance mechanisms in place and had them work in shift. So it was always the same two people who would be at that site developing the kit as we went along. And I have to say, we also borrowed a couple of people's garages, so a couple of guys did some amazing work from home. I'd love to think of this as the Agritech garage band. Together, they made some amazing developments and we gradually got more and more back to work. The James Hutton Institute, where we are colocated, kind of went back at the beginning of this month and so we've been able to have actually visitors coming as well, which is great because that's helped us to sort of close some business. We've now got to a stage where we've got full stack growing towers with like 50 trays full of crops, literally thousands and thousands of plants. And we've managed to get the humidity levels and the temperature levels within the trays and in the whole tower to tolerances of around about 1.51.6. So that degree of accuracy and precision in saying this is what it needs to feel like for these plants, this is the ideal climate for them, that's well within the tolerance that a plant will cope with. And it probably doesn't need to be that accurate. But the fact that we can do it means that we can then turn the dial up when we need to, turn it down when we need to, and kind of take a plant through the whole cycle from germination, where we want it to be warm, humid, dark, right through to hardening off at the end of the crop's sort of growing cycle. When we want to make it cooler, we want to make it much brighter. And the way chemically that the plant and biologically the way it will act to that means that it's going to have a much longer shelf life or it's going to be much better hardened off for planting out, if that's what you're doing with the crop next. And so just having the ability to do that and for the guys to have perfected that during this time, I think is an absolutely amazing feat.

[0:17:35] Harry Duran: Do you think a lot of people watching from the outside take it for granted the amount of science and development that gets required to get things to this level of precision and also the processing power that probably needs to be available. This sort of, like, perfect storm of all these things that need to happen at the same time for you to be able to do things at this scale.

[0:17:57] David Farquhar: Yeah, well, you just use the right word scale, because doing this on your dinner table is absolutely fine, or doing it in your garden shed or a container is fine, but that's not the business that we're in. And you're absolutely right. I think that it's just beginning to dawn on the industry that if you are going to do this and do it at this scale and do it with this degree of precision, it's big mathematics, but it's also heavy, heavy lifting on a number of different systems. So one of the changes we've noticed in the last six months, but really exaggerated since the lockdown, is the number of high profile, very experienced, very talented growers who have been operating perhaps in a greenhouse or at a certain level, who are trying to build their own at industrial scale and who have now turned around and said, you know what? We just keep hitting cul de sacs. We keep hitting brick walls. When you're getting to tens of thousands of LEDs, when you're getting to that mass of air that we have to deal with, when you have that many irrigation events and you got to manage the whole thing, it is really tough. And I'll come to the date in a second. But it's not just that. It's about the electronics, it's about the physical handling, it is about the ventilation and the humidity and so on. So it's stuff that people are almost kind of taking for granted. I was standing in a field with a guy with 100 acres of beetroot in the north of Scotland just a week ago and we were talking about if you could take this field indoors, could you specify the perfect climate for each period of this crop's life cycle? He was telling me that he needs to get mid teens per acre to make his business really work. He's occasionally got up towards 20, but he's had a couple of years where he's been down below ten. And that's incredibly tough.

[0:19:52] David Farquhar: And trying to get a farmer like that to think, well, if I'm not at the behest of the climate of the weather anymore and if I'm in control of it, what can I really do? Where can I take this thing? And then having them think about how tough that is. So that is a journey I think a lot of people are on. We are seeing a lot of business now coming out of these more experienced growers and that is, I find, incredibly encouraging. And then you talked about data and I think you're absolutely right, because in order to make the right decisions so, yes, of course we have artificial intelligence that's proposing recipes of weather climates to develop. But there's also the intuition of someone with green fingers, someone that has grown and is an experienced horticulturalist and you have to enable that experience to overlay what the artificial intelligence is proposing, because it's just intuition. They will just know that that's not quite right. And also you're bringing the automation and the industrial side together with this horticultural knowledge and crop science, because crop science can bring to the table the fact that, well, we know that we can impact the nutrition of this thing, the flavor of this thing, the taste of this thing. If we can experiment with the way we apply spectrum to it or brightness to it and at different times in the life cycle, So having the ability to have that degree of precision and control and to be able to vary it is enormously important. So the data is great, but it's only useful if you can respond to it and act on it. Okay? So that's why the controls are so massively important. So during lockdown, all of these things have really developed for us incredibly well. But the one that almost makes me the happiest of all was so, you know, from our last conversation, that we've made this promise to the market that we will never grow crops for commercial sale.

[0:21:51] David Farquhar: Our covenant is that we're a tech vendor, you guys are the farmers, you're the growers, you know how to do this stuff. We'll just give you a better set of tools. And so what we do with the produce that comes out of our demo farm, it's grown for crop science, it's grown for R and D purposes. And we always either compost it or we take it home and we use it at home. My wife has developed the most amazing pesto recipe you have ever tasted in the world.

[0:22:20] Harry Duran: When is the Igs recipe book?

[0:22:22] David Farquhar: Yeah, there you go. She's not even Italian. But this stuff is incredible. And we've been sharing it with customers and partners and things, and they're all going, what the hell is in that thing? So we're figuring out what we actually do with this recipe. But the thing we decided to do was there's a lot of people struggling in cities, maybe they're homeless, maybe they've been furloughed, maybe they got young families. It's been harder and harder for them to access food and have a healthy diet and so on. And it suddenly dawned on me one day that there was a notice came out from the Scottish government saying, if business can do anything to help people in the current lockdown situation, please let us know. And I thought, you know what? We've got all this produce, why don't we share it with the community? And so we got in contact with the city council in Dundee and they put us in touch with some people that operate multiethnic kitchens and do food banks and stuff like that. And so we offered them the produce. And for me, what was so interesting, and I hadn't thought of this before we did the experiment, was I wonder if the average person in the street is actually going to like the stuff that our farm can grow, because some of the stuff we grow could be considered high end produce. Well, do you know what? It's been absolutely amazing.

[0:23:38] David Farquhar: We're doing two to three deliveries a week. We're harvesting it, we're bagging it in compostable bags and they're coming to collect it. It's all done incredibly safely. We've had some fantastic responses and they're just saying, can we get more? Can we get more? Can you keep this going after lockdown? And so on. So what we're hoping to do is to work with a local grower to actually put a vertical farm into the city of Dundee to make this happen because we need to get back to our day jobs, as it were. But it's been a real privilege to be able to supply that food to those folks because it does seem to have made a difference.

[0:24:15] Harry Duran: Yeah. And I think that's what's been happening across the globe is the impact. And here in the States, if you look at things like unemployment numbers and if certain stimulus packages are not passed in time, the moratorium on Evictions is going to come and go. And I think what we're seeing here, and I'm wondering what you're seeing on your side as well, is I don't know that we've grasped the impact of COVID and people losing jobs, people losing homes, people not having access to food, and it feels like there's a wave coming that we may or may not be prepared for. And I think to your point, what you're doing is a great start. And I'm wondering if we're starting to figure out a way, as a collective society, as business owners, what we can do to help prepare for this and help, to put it as simply as possible, help our fellow man out.

[0:25:08] David Farquhar: Yeah, I mean, societies vary a great deal in terms of their humanity, don't they? And I guess countries also vary from time to time depending upon who's running them. It's been interesting. I don't believe that in a situation like this you can look after the economy and society fully. At the same time, I think tough choices have to be made. The Scottish government has opted more for a societal approach and as a business person, as an entrepreneur, I will admit that that has been frustrating at times. I don't understand why people can go to a pub, but my guys can't go to the office because I guarantee you that after a couple of pints, the level of social distancing in a pub is going to be a lot less than us placing desks 2 meters apart.

[0:26:03] Harry Duran: Oh, yeah.

[0:26:04] David Farquhar: So some of the decisions I find head scratching, but overall, I think that governments have to make a choice between a societal focus or an economic focus and one or the other is going to suffer. And yeah, clearly there are opportunities for business to play its part and I just hope that humanity comes to the fore because at the end of the day, it's people that make things happen. Right? We need to look after people. I'm a firm believer in that. I do think that as a business, you can find a balance between those two things. I don't think we'll always get it right, but it behooves us to at least have a goal.

[0:26:46] Harry Duran: Yeah. One of the things that I wanted to talk about is your thoughts on introducing new skills and encouraging greater awareness among younger generations of people coming into vertical farming and how there might be more awareness of that with everything that's happening now.

[0:27:02] David Farquhar: You've got a crystal ball, haven't you? So, one of the things we did early in the year, a friend of mine, Sandy Kennedy, runs a thing called Entrepreneurial Scotland and it's a fantastic notforprofit organization which takes undergraduate students and it sends them over to Babson College, which I think is in Boston, isn't it?

[0:27:23] Harry Duran: Yes. Right, Boston.

[0:27:24] David Farquhar: So they go over there for I believe they do almost an additional year in their degree course, and they go over there for an extended period of time and they go through entrepreneurial training. And the idea is that they then come back or maybe it's a semester, I'm not sure but they then come back to Scotland. And the idea is that they get a placement for ten weeks or so during the summer. So they give up their summer holiday to develop their understanding of entrepreneurship. Sandy reached out to us to say, look, we are really struggling. We normally manage to place, I think he said, about 250 students. It's an amazing program and we are really struggling to get up to about 100. Is there anything you can do to help? And actually just so happened that we've gone from eight people to 55 people. We should actually be at like 85 people, but we had to sort of slow things down on the recruitment front during the lockdown.

[0:28:19] Harry Duran: Yeah.

[0:28:19] David Farquhar: And so we've got a bunch of projects. You know what it's like when you're developing a new business. You know, I need to do this, I need to do that. You need to research this or find out about that, or all kinds of different things from pricing structures to how do we create a digital Twin? To what how should we prioritize markets for the intelligent Grid product? And so on. So loads and loads of different really interesting things. And with not enough hands to do it, we went back. So I just said to the team, look, does anyone have a project that could use a super bright, very enthusiastic, very intelligent person for ten months? And it was kind of, where do we get them? So between Entrepreneurial Scotland and some other connections to universities and to a bunch of interns that were available locally in the Dundee area, we've actually taken on 15 folk, which is in addition to our main staff, so they're all here for the summer. The feedback I'm getting is they're doing an absolutely amazing job. So in terms of developing entrepreneurial skills and developing enthusiasm for this sector amongst at least a part of. The next generation and for us to get benefit from it as well. That program has been absolutely terrific.

[0:29:36] David Farquhar: But another aspect is that we are now in conversation with a couple of agricultural colleges and universities and things who are interested in putting up a vertical farm to teach. So that's a development that I think that we will see in the industry in the course of the next twelve months or so. And I think that's a really exciting thing because it's kind of part of making this thing mainstream. And you know, I've talked quite passionately in the past about the fact that it's not yet mainstream and let's not kid ourselves on that. It is.

[0:30:11] Harry Duran: Yes.

[0:30:12] David Farquhar: And so the third part of this is that our engagement with the real farming community has three threads to it. The first one is helping them to diversify what they grow. The second one is about helping them to grow a much better supply of starter plants, seedlings and things that they don't have to import. But the third one is an agenda to keep more of the next generation on the land. Because I don't know what it's like in the States, but the tradition in Scotland, and I think quite a lot of UK and maybe Europe, is that the farm always passes to the oldest male child. If you think about it, if you're a dairy farmer and you're producing a lot of stuff out of the back end of cows, that is not great, but you can do an ADHD plant and generate your own electricity. Then maybe you could get a vertical farm, diversify your operations away from dairy into maybe growing salads and other leafy greens for or fruit and things for your local market, and maybe another person within the family could run that part of the business. So maybe the daughter or the younger son or whatever. So the agenda of keeping more of the next generation in agriculture on the land is another one we're keen to support.

[0:31:29] Harry Duran: Yeah. And I imagine there's a different set of skills that are going to be required, because, typically, growing up on a farm, you could learn what you needed to learn from your father or the generations passing the wisdom of tilling the land. But now there's a different set of skills that are required, especially when it comes to vertical farms. And I'm sure that's part of the education process as well.

[0:31:50] David Farquhar: Yeah. As we said earlier, you're doing this thing inside a metal box, you're using a completely different substrate from the soil, you are not having to react to the climate, you're creating the climate. So I think first principles are probably the same, but there are significant differences that have to be learned. And again, if we are going to grow up as an industry, we have to be honest about that, we have to make provision for it. So the sooner we're teaching this stuff in an open way the better, in my view.

[0:32:22] Harry Duran: Yeah. So, speaking of breaking new ground, can you talk a little bit about the partnership with Vertical and building Scotland's first commercial vertical farm?

[0:32:30] David Farquhar: Yeah, it's really exciting. So, as it said in the press release and so on, the founder of Vertigo, the co founder of Vertigo, Martin Dickie, is one of the co founders of Brewdog, which is an absolutely amazing drinks brand. They started in Microbrewed beer, as you know. They have American investors. I think they've got a whole bunch of locations around the States, as well as over here and in other parts of the world. They're very innovative people. Martin and his partner in Vertegro are looking to do the same thing with agriculture. In fact, Brewdog just earlier this week announced the weekend, announced the Brewdog Forest. So they're going to go carbon positive, beyond carbon neutral, or maybe it's carbon negative, I can never remember which way red is. Anyway, they're going to consume more carbon than they're going to generate, and doing vertical farming is part of that. The thing is a heat sink, it's a carbon sink, but growing a forest is an even better way of doing it. And so they've got lots of really interesting ideas as to what they might do with produce that comes out of a Vertical farm. So they've got a site, we've done the design with them on the layout for the harvesting and packaging area and all that kind of stuff. And in fact, I had lunch with them last weekend at the Brewdog HQ, had an absolutely amazing beyond Meat burger and a pint of blackened tan, which is not something you see every day, but it was excellent. A mixed stout and IPA drink.

[0:33:57] David Farquhar: Fantastic. So, no, we're really pleased to be working with those guys because they're innovators, they really care about the environment and not just with what they say, but everything that they've been doing with Brew dog and so on. And I think we're going to see a lot of really creative stuff come out of them. So that's an exciting one. And we have some equally exciting ones in the pipeline, which I'd love to tell you about. The team would absolutely kill me.

[0:34:24] Harry Duran: May I have to set you up for the third interview now?

[0:34:27] David Farquhar: Yeah, I mean, watch this space. But I'll tell you, we are really seeing agriculture. 40 people are starting to think about how this enables totally new business models.

[0:34:38] Harry Duran: What are some of those models people may not be thinking of now, but that could be creative as a result of the work that's being done?

[0:34:45] David Farquhar: Well, if you think about the fact that all the supply chains, all the relationships between buyers of raw food, whether it's meat, whether it's milk, whether it's cereal, whether it's lettuce you have a farmer who works his or her backside off, deals with the climate and everything else that is thrown at them and overproduction, sometimes under production, sometimes seasonality. And if you're supplying to a food manufacturer who's trying to stock the shelves of a retailer, they need to be able to stock those shelves twelve months of the year. But you can only grow stuff seasonally. It is just so hard. You really almost need to be nuts to go into it. I really admire people who do. And the behavior of those growing and selling produce, the behavior of the wholesale people, the sort of middlemen, the behavior of the buyers and the negotiators with big retailers and so on, has all been governed by this lack of certainty and this seasonality and this over and under production. So everything is a negotiation. If that can be taken away, if you can guarantee a yield, a quality, a delivery, well, that negotiation. Day to day, week to week, month to month, season to season, that can go away. And you can get to a point where you can say, you know what, I can stock these shelves in these stores with these SKUs. I can guarantee the yield, I can guarantee the quality. So let's not haggle on price for every head of lettuce. Why don't you pay me a subscription and I'll fill your shelves for you. And so everybody loves everything as a service, whether it's software or razor blades or ink cartridges.

[0:36:46] David Farquhar: How about farming as a service?

[0:36:48] Harry Duran: Interesting.

[0:36:49] David Farquhar: And that's the kind of thing that we've been thinking about ever since I kind of joined this business and we put together our business plan for our Series A investment. These are the kind of new models, new paradigms that we've imagined one day might be possible. And I think that the quality of people that we're dealing with now. And I don't mean that in a pejorative sense. I mean in a sense of their experience, their knowledge, their expertise. As growers their relationship with the offtakers the major buyers in the market puts them in a position where they can take this certainty, this guarantee of quality and delivery and yield and they can develop new business models and become more assertive in the way that they deal with buyers and so on. And I don't think that's going to disadvantage the buyers. I think the exact opposite. I think it's going to elevate the whole thing. I think it's going to even it up and it's going to lift the industry to a much better place.

[0:37:51] Harry Duran: Yeah. And I think this speaks to some of the articles I've seen on Agfunder recently about the continuous interest from an investment perspective because I think there are new business models that are being formed and created as we speak. What are you seeing on your end? Obviously, Igs was the beneficiary of the funding necessary to get where you're at right now, but it doesn't seem to show any signs of slowing down in terms of interest from the investment community.

[0:38:18] David Farquhar: No. And indeed we have had a great deal of interest from the investment community. People really want to give you money when you've got money being cynical. But we have had a tremendous amount of interest and there's different kinds of money, right? So there's very high risk money and we were really privileged to be able to raise that last year. We'll be moving from a risk phase into a growth phase, which then becomes all about execution. It's a different type of risk, but it's an easier risk to manage. Your degree of control over it is greater. There you go. I've totally jinxed it now, haven't I? So it's a different kind of money and we've been seeing a lot of those folks express an interest in supporting the next stage of our growth, which is terrific. We're really grateful for it. Very interesting question the other day we've been put up for the finals of the British Farmer Awards, which is really exciting to be recognized by the industry as a supplier. One of the guys asked me, well, aren't you in danger of building so many vertical farms are going to saturate the world market? I hadn't even thought about that, but it was an interesting question.

[0:39:24] David Farquhar: But I think there's plenty of space. So I think there's plenty of room for capital to come in and support the growth of this industry and I hope things like aquaculture and better management of livestock and better management of staple foods and things like that. So I think there's plenty of investment opportunity and yeah, I'd say we're definitely seeing it.

[0:39:45] Harry Duran: Do you see Igs at some point also having a hand in developing some of these new technologies or supporting some of these new entrepreneurs with something along the lines of an incubator or something that can help? Because of all the work and development you have, I imagine you might have an interest in technologies where you could have a hand in supporting them that in the long run could actually benefit some of the things you're working on at Igs.

[0:40:12] David Farquhar: Yeah, so if you look at how we build a vertical farm today, or indeed how we build the intelligent grids today, and as we come to a lot of announcements around that product, which will be end of this year, that might be a good time for a catch up. But a lot of the we design components ourselves and we take them out to manufacturing partners. But we also encourage young companies well, what are we but smaller companies that have got really interesting technologies to come and talk to us. But then we've also got some serious corporate partners in Asia, in Europe, in North America, some real household names who supply components to us. And we're always totally open minded. I think we know where the problems lie that we have to solve because no one else has. But if there's something that just works, then why not use it? And I'd say we get two or three approaches a week from people that have got interesting new stuff. Whether it's a new growing substrate, a growing medium, whether it's a clever widget, whether it's a new piece of electronics, whether it's a better way to mix nutrients. There's all kinds of stuff. I mean, it's such a complex machine, this thing. So yeah, we're seeing that all the time. And AG Funder, one of our investors, has set up an incubator in Singapore that's got some interesting stuff coming out of it. We certainly are thinking quite hard about the package that we supply to our customers because they need more than just our vertical farm. They need seeding automation, they need harvest automation, they need packaging automation.

[0:41:58] David Farquhar: And we're very keen to look at those aspects. And more and more people are looking to say, well, can we do an entire operation, cradle to grave, with a kind of turnkey solution? And so that's something we'll certainly be turning our minds to. I've got no doubt about that.

[0:42:16] Harry Duran: Can you talk a little bit about the work you're doing on the climate front with regards to the new technologies you're developing as well?

[0:42:24] David Farquhar: Sure. So the way we're now thinking about things is the weather is a three dimensional object. So the three dimensions really are the sun, the wind and the rain. And however you choose to look at it, different combinations of those are what make up our daily weather, our weather from hour to hour. But it's more complicated than that. So each one of those dimensions has multiple factors, and it could be 6810 different factors that go to make up the light that we receive, the way we get our water into our ground, whether it's through rain or groundwater, the wind and the impact that has on our ability to grow crop. So it then becomes more complicated from a mathematical point of view. And then you have to think that each one of these eight to ten major factors of the sun, of the wind, of the rain, each one of them has an almost infinite number of possible values. And the one that brings it out for me the most is spectrum. Think about when you go into a paint shop. You're going to go and buy paint for your bedroom or something. And you go into a DIY store, a hardware store, as you'd call it, and you get the color chart and it's just, oh my God, how am I going to choose?

[0:43:40] Harry Duran: You never realized there were so many shades of green available.

[0:43:44] David Farquhar: Exactly. And you then think about the RGB, the red, the green and the blue. And you think about every sunset you've ever seen. Think about every sunrise you've ever seen. Think about the colors in a beautiful garden. So there's an almost infinite number of possible varieties of just spectrum. And then you've got brightness on top of that. Then you've got dimming and pulsing and you've got multiple different factors just of light. So you're layering complexity on complexity on complexity, and the ability to manage that, the ability to replicate a certain type of weather, because that's the weather that this crop needs. That is the thing that we've been working incredibly hard on. The crop scientists and the horticulturalists and the growers are the people who will figure out what is required. But our job is to make their job possible. That's been the biggest sort of breakthrough, I would say, this year. And then you think about ventilation. So you're thinking about temperature, you're thinking about wind speed, you're thinking about a mass of air, you're thinking about what gases are in the mix, you're thinking about humidity.

[0:45:03] David Farquhar: And then you think about evenness as well. And then you think about the delivery of water. Well, there's volume of water because you can drag things. There is PH value, there is a nutritional value. There is the temperature of the water, there's the salinity of the water, there's how it's delivered. And so sort of even the speed of flow, the heaviness of the rain, all of these things have an impact on crops outdoors. So you've got three dimensions multiplied by nine to ten factors multiplied by infinite possible number of values. That is huge mathematics. And the thing we've then been thinking about is, do you know what? That's not enough. Because when you put a seed in the ground, you want it to germinate. And to get it to germinate, in most cases, you probably have to put it in a dark, warm, damp climate. And therefore that is what it needs in the first few days of its life when you are finishing the crop, whether you're going to plant it out into polytunnels for harvesting, whether you're just going to take it and harvest it and package it, put it on shelves. Whether you're going to plant it out in an open field, you've got to harden this plant off. And so what you want to do is you actually want to cool the temperature down and you want to intensify the light, and it's going to be a particular type of light.

[0:46:30] David Farquhar: So my point there is that throughout the crop's life cycle, it doesn't need the same thing. It needs very, very different things. And you have to be able to deliver that. And then you have to think about a diurnal range. So you start with the night. And the night is not black. The night has ambient light. Then you have the sunrise, then you have 18 hours of perfect weather. Then you have a sunset. If you can't make that, then you cannot make the ideal weather morphing into a climate. And then you have to think about seasons. Most things grow between April, May and September, October, depending upon where you are in the world. Of course, the Southern Hem hemisphere has the exact opposite. But you've got to think about that seasonality and what that then does to hug the crop. And that fourth dimension of time is still not enough, because you got to think about space.

[0:47:19] David Farquhar: So when you have a climate, it's not just about what the weather is and what the crop needs at a given point in time, it's about where it is. Is this on the top of a cliff right next to the ocean? Is it in land, is it within a forest? Is it up in a mountain? And you got to think about, in our case, the space on a growth tray, which is a microclimate, the space inside a tower, which is an independent farm with a background climate. The space in terms of the size of the pot that you put the seed into to get the effect you want, and then the space in terms of a latitude. So if you're growing the legendary basil and baby vine tomatoes, you probably want to mimic Tuscany between May and August. And so you're going to be able to do that stuff. So we're seeing the controls in a five dimensional way, the three dimensions of weather, the dimension of time, and then the dimension of space turning into a climate.

[0:48:20] Harry Duran: Yeah, fascinating. I think people underestimate all the different variables because it's not just the four or the five, it's the way those five interact with each other, which then gets you into exponential numbers and exponential outcomes.

[0:48:34] David Farquhar: Absolutely.

[0:48:35] Harry Duran: Well, that's really exciting. I'm glad that you got to share some of what's happening. And just as we wrap up, I'm excited at a lot of the initiatives that are going on within Igs, and I think the fact that the industry continues to innovate a breakneck speed is exciting to watch. I appreciate you coming on and sharing some of the insights about what's happened since we last talked. So one last question I have is what's a tough question you've had to ask yourself recently.

[0:49:01] David Farquhar: As we go from being an R and D company to where we are now a real commercial business, to completing our first deals, I want to make sure that we live up to the promises that we're making our customers as they come on board. More than that, the promises that we're making society and the world that, yes, we can use this sort of technology to improve our food supply chains, to derisk things to help the climate. And the next part of our journey is all about scaling and making sure that we can deliver on the potential. So that is really where I'm focusing my energy and the team is focusing their energy for the next stage of our journey. And it's super exciting.

[0:49:52] Harry Duran: That's exciting. And thank you for sharing. Thank you for once again coming back on and bring you and your family are staying safe and continue to share with us anything that's happening and that you're innovating at Igs. So thanks again for your time, David?

[0:50:05] David Farquhar: No, thank you, Harry. Pleasure to reconnect.

[0:50:08] Harry Duran: So thanks again to David for making a return visit to the Vertical Farming podcast, sharing a lot of the innovations that are happening at Igs and giving us a nice state of affairs for what's happening in the six months since we last spoke. Can't believe how much time has flown by. As I mentioned at the top of the show, if you are enjoying this podcast, please leave us a rating and a review@ratethispodcast.com VFP. We'll be sure to read those out on future episodes. As a reminder, special thanks to our episode sponsor this week, the Vertical Farming World Congress. Check out the registration link in the show notes to sign up September 22 through the 24th, until we meet again next week. Here's to your health.

[0:50:51] Harry Duran: Thanks for listening to read the full show notes for this episode, which includes any links mentioned in the episode as well as a full show transcription Vertical Farming Podcast.com there. You can sign up for our email list to be notified when new episodes are published.