Industry 4.0 comes to the indoor farm, bringing opportunities for increased sustainability and profitability.
As first adopters in other industries have embraced the expense of trial and error to improve workflows, production efficiencies, and bottom lines with analytics, farmers are doing what all growers must do with their crops: watch, and wait.
However, data-driven agriculture is taking root and the benefits for indoor growers are tremendously attractive. Increased efficiency, higher crop yields, a greater degree of sustainability, and higher profits are at the top of the list for today’s farmers — available only if they can derive meaningful insights from the data they collect, use that information promptly, and do so without bearing crippling expense.
“Farmers and growers will adopt technology as long as they can afford it, and it works, it's reliable and solves a big problem for them,” asserted Allison Kopf, founder and CEO of Brooklyn, New York-based Agrilyst, a web-based software platform that helps indoor farms manage their crops and gain data-driven insights to make more profitable production decisions.
“Farmers are very good at growing,” she said. “What we have to do as a tech company is fit into that business, rather than shove technology down their throats when they're not yet prepared to do that. And that’s a pretty big concern in agriculture, compared to other industries.”
Putting the power of data science into growers’ hands is Kopf’s mission. “We have to produce about 70 percent more food by 2050 in order to just feed the population, and we have to do it in a way that makes a profitable system for farmers,” she told BOSS.
Profitable operating systems require high revenue generating crops. According to Agrilyst’s 2017 “State of Indoor Farming” industry analysis, specialty crops, such as flowers, cannabis, or tobacco generate high dollars, as do leafy greens and produce with short growth cycles.
Once dominated by greenhouse production, the domestic indoor farming industry is moving towards alternate growing systems such as fully enclosed vertical growing systems. These systems require crops that are physically short to produce higher yield, that have short growth cycles, or are highly perishable to get more value in local markets.
“There are a lot of these macro challenges affecting the food industry, and the supply chain as a whole,” she continued. “Indoor farming is a good niche in terms of problem-solving in that supply chain. It allows growers of specific crops to produce more with less resources, and to do more sustainable production.”
From a capex perspective, indoor farms are extremely expensive to run. “About 50 percent of the cost of running an indoor farm is related to labor. Finding ways to reduce those costs is a really big issue,” Kopf clarified. Analytics are particularly helpful in lowering these costs. “We look at employee performance. What tests are they doing? Are the right tasks assigned to the right people? Are the hours correct? Who is most productive, and when? We optimize all of that workflow to get the right amount of labor hours for your operation to make sense.”
The approach adds value for owners and employees. “One of the big issues in agriculture is paying employees correctly,” she emphasized. “Many employees are paid based on pick and pack rates. But if there's no way to really measure your productivity, there's no way to make sure you're being paid correctly. There's a transparency issue that data can fundamentally improve based on just being implemented into the operation.
“There's a broader supply chain issue here too,” she added. “Growers don't often understand which market they should be selling to or what pricing they can get for the crops that they're selling. A fundamental understanding of what retailers, wholesalers, restaurants, and others are buying, their volumes and what they're paying for products. You can begin to match production data to those issues and actually build a more profitable market for both retailers and growers. That's a big question we're trying to solve.”
In addition to streamlining paperwork, automation software streamlines production planning, yield forecasting, and compliance for food safety, and makes those processes more accurate. “We show growers the benefit of doing that from a data science perspective,” Kopf added.
“You have all the data in front of you, presented in the way you're used to seeing it, and in the way that auditors need to see it, and you no longer have to do those jobs,” she explained. “The next step is showing risk profiles. Feeding those insights directly to the grower builds trust. We’ve done that in a few different areas that affect operations, from food safety to production planning and yield forecasting, to looking at market access. We look at the whole supply chain in that regard, automate it, and provide insight.”
Agrilyst looks at data throughout the entire supply chain. “We exist to help the indoor farming industry scale profitably, efficiently and sustainably. For us, the most important thing is to help farmers use data to make smarter decisions for their businesses.”