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Thanks to vertical and indoor farming, food producers are now no longer at the mercy of unpredictable weather. Nor do established agriculture businesses and restaurants have the kind of stranglehold on the food industry that they previously enjoyed.
With the costs of indoor farming, small-scale grow kits and other food-cultivating equipment starting to tumble, lots of small businesses are harvesting their own food products on a hyperlocal scale, with microgreens increasingly being a category they tend to choose. Market research company Mordor Intelligence has reported that the microgreens industry is forecast to grow by 7.5% every year between 2020 and 2025, with a wide variety of micro-scale enterprises popping up in places such as South Africa, India and Mexico. Meanwhile, findings from automation specialist Autogrow and urban farming consultants Agritecture show that nearly half of all new vertical farming companies are entering the market without previous experience of growing crops.
Barriers to entry
Aspiring microgreens growers don’t need to have much knowledge of agriculture and the plants can be harvested almost anywhere in the world. There’s little startup or infrastructure cost, and the initial investment can be recouped fairly quickly, because microgreens usually grow at a rapid pace.
Margins
The cost of trays, soil and seeds are low, somewhere in the range of $2 to $10. Home growers typically invest in 10 to 20 trays to start with, and each of these trays will yield roughly 200g of microgreens in a two-week cycle. Commercial growers might want a larger initial investment by increasing the number of trays they buy and controlling the growing conditions with specialist lights and technology. How much the microgreens then sell for depends on the varieties and the form they’re delivered in. Rare microgreens cost more, usually between $3 to $5 for 25g. However, commercial partners, like food hospitality businesses, often prefer to receive the microgreens live – still in their soil – and will only pick them right before they are about to be used as part of a dish. Depending on the variety, restaurants have reportedly paid between $25 and $40 for a tray of live microgreens. Scale up and you have yourself a very lucrative side hustle.
New players
British brand Minicrops grows more than 20 varieties of microgreens, including red amaranth and lemon balm. Planted Detroit has an equally exotic selection, featuring wasabi and sunflower shoots. In British Columbia, Mycro Seed Co offers microgreens subscriptions. All of these companies came to fruition in the past few years.
Madrid-based business ekonoke began life in 2016 as a producer of leafy greens – think the base ingredients for a salad, like spinach, kale, collard greens and cabbage. However, after three years, it had to switch focus. ‘There was an uncharacteristically hot summer that year, and the greenhouse we grew our crops in reached 40°C,’ says the company’s co-founder Ines Sagrario. ‘Everything died. By the middle of the summer, we had to close our greenhouse and move indoors.’ That’s when the ekonoke team decided to focus on microgreens.
Consumers have also been experimenting with these crops. Sean – who doesn’t want to give his surname in an attempt to avoid his full-time employers finding out about his new side hustle – started growing microgreens as a hobby. Alongside his main job, he has now scaled up production capacity into a fully operational business, Sweetlife Microgreens, that delivers around Colorado. ‘It seems like direct delivery models are going to become the zeitgeist,’ he says. ‘I also sell to private chefs.’
Challenges
While barriers to entry might be low and financial returns high, owning a microgreens business doesn’t come without its challenges. Sean points out that selling in bulk isn’t on the cards because it jeopardises the crops’ freshness and consumers don’t want large quantities. So growers need to constantly make high numbers of sales to stay afloat. ‘Plants grown inside are less resilient than those grown outside,’ adds ekonoke’s Ines. ‘While you don’t need to anticipate the weather when you’re growing microgreens, you need to be able to anticipate a lot of other factors.’
This article was first published in Courier issue 40, April/May 2021. To purchase the issue or become a subscriber, head to our webshop.
