Episode 42 Transcript: Making a Splash with Vertical Farming

Molly Wood Voice-Over:
Welcome to Everybody in the Pool, the podcast for the climate economy. We dive deep into the climate crisis and come up with solutions. I'm Molly Wood.

So, let’s get back to food this week…

Heat domes, floods, and fires affect all kinds of things, and our agriculture and food production systems are already feeling the strain.

And, of course, traditional large-scale farming practices are incredibly resource-intensive, contributing to soil degradation, water pollution from fertilizer runoff, and high greenhouse gas emissions.

As the impacts of climate change intensify, from extreme weather events to shifting growing seasons, we need to rethink how we grow food.

On today's show, we'll explore an innovative approach to local, sustainable food production through vertical farming and controlled environment agriculture.

Alexander Olesen:
My name is Alexander Olesen. I'm the co-founder and CEO of Babylon Micro Farms. We build small-scale vertical farming systems that we remotely manage to enable businesses and communities to grow their own fresh food on-site.

Molly Wood:
So, tell me how you got the idea for this. What was the impetus to start this particular company?

Alexander Olesen:
Yeah, so we were students at the University of Virginia, and in the social entrepreneurship program there, we were exploring ways to feed people in refugee camps. One of the ideas was to develop small-scale farming systems. What would that look like? I was introduced to the wonderful world of hydroponics, a way of growing crops in water instead of soil. It's super resource-efficient, so you can grow food in places where you might not otherwise be able to.

Through that research project, we were designing concepts and open-sourcing them. For all of its merits, that was the key to where we wanted to take Babylon. I wondered why people weren't doing this in the US. These small-scale farms are viable. It's very different from big commercial vertical farms, which we may talk about a little later. Why weren't people building small-scale farms? I thought it could make this kind of farming accessible to entirely new markets and places that actually really need it.

That was the insight nearly eight years ago. I spent a year tinkering and building prototypes in a dorm room. I found my co-founder, and we started building together. One thing led to another, and we started the company. We were 22 at the time, in our third year of college, and now we're seven years in this month. So, it's come a long way since then, but that was the initial idea.

Molly Wood:
Talk a little bit about why farming itself needed sort of a redo. You alluded to the idea of large-scale vertical farms. So, it sounds like you're innovating on farming, but also vertical farming simultaneously.

Alexander Olesen:
Yeah, you could say that. I think the agricultural system is broken in a lot of ways, and that's fairly well-documented. Generally speaking, you have these large monocrop culture farming systems that are super damaging to the environment, right? From fertilizer runoff to pesticide usage, they're causing a lot of issues. There's a general shift toward more regenerative practices, supporting local farmers, and all of this stuff.

Indoor farming is part of that toolkit. You can bring farms close to the consumer with less shipping and waste.

Molly Wood:
So, let's talk about climate impact because it's a more sustainable way to grow. There's also this adaptation component that I want to dive into. How is it more sustainable?

Alexander Olesen:
Hydroponics at a high level dissolves nutrients in water. They're typically a closed-loop system, so very little water is needed to grow the plant from seed to harvest. Because they're indoors, they don't need pesticides or harmful inputs. You're using the sun or, in our case, controlled lighting to grow food year-round. There's little transportation, and up to 60% of fresh produce is wasted before it reaches the plate. It's a broken system, often resulting in poor quality products for the consumer. It's usually a soggy bag of spinach or lettuce.

Indoor products have high nutritional value, less waste, and a much longer shelf life. For indoor farming particularly, it's about localizing the supply chain, increasing resilience, and providing an alternative to that wasteful supply chain, which is ultimately unsustainable.

Molly Wood:
We're already experiencing crop loss due to increasingly severe weather from climate change. There are real questions about how to feed people in the future. Let's talk about this as an adaptation and mitigation solution.

Alexander Olesen:
Self-sufficiency and self-reliance are innate to human nature. As you look at massive international coast-to-coast supply chains for basic grocery and produce items we take for granted, that's completely unsustainable. It's not just emissions from transportation; floods, E. coli, and other factors disrupt the supply chain. We're going to see more frequent disruptions and the need for resilient alternatives.

I will say it's part of the solution, not the solution. There are evangelists who believe every plant or food will be grown indoors, but I don't agree. For some highly perishable items like leafy greens and herbs, it is economical and of higher quality.

Molly Wood:
What grows well indoors, and what doesn't?

Alexander Olesen:
Broadly speaking, you have your leafy green categories like kale, spinach, lettuce, and most major culinary herbs. Vine crops range from tomatoes and cucumbers to strawberries and blackberries. Many people grow cannabis indoors, though we don't. It's technically possible to grow a much broader range of crops indoors, but it's not economically feasible. There's been research on wheat and potatoes in the space station, trying exciting varieties, but it doesn't make economic sense.

Molly Wood:
Who is the ideal customer for Babylon Micro Farms?

Alexander Olesen:
Before I answer that, we talked about indoor farming broadly. I think it's important to differentiate between big commercial greenhouses and plant factories commonly seen in the media. You're talking tens of thousands of square feet.

Molly Wood:
Yeah, let's dig into that because I don't think people even know that exists.

Alexander Olesen:
So, an indoor vertical farm might make sense in colder climates where you have less sunlight and more extreme seasons, whereas a greenhouse benefits from natural sunlight. Our approach is different: what if we put farms immediately on-site so you're not buying it in?

We just did the world's first cruise ship. They have a vertical farm on board. There was no option for them, and now they're growing food. While our approach is different, it's a glaringly obvious use case. They couldn't grow food before, and now they have a vertical farm.

Molly Wood:
That's so smart.

Alexander Olesen:
We're seeing glaringly obvious use cases where putting a farm on-site is a no-brainer.

Molly Wood:
There must be things like that you just wouldn't have thought of. Submarines, maybe.

Alexander Olesen:
We have thought about it.

Molly Wood:
Your value proposition for a college campus, senior living facility, or cruise ship is fresh food that you couldn't otherwise get economically or sustainably.

Alexander Olesen:
For us as a company, we want to drive costs down to make it economically viable to grow various crops on-site, year-round. For many of our clients, we capture the soft and socially beneficial impacts of farming, which are lost on other large-scale farms. When you put a farm in the cafeteria or a senior living home, it's a focal point for the community.

We just launched a product called the STEM Garden, which is a pun. It's used for STEM education, literally putting these in classrooms to teach kids about a range of subjects.

Molly Wood:
I'm getting Instagram ads for consumer-level indoor farms. How do you think about the decentralization of food production?

Alexander Olesen:
It fits into a broader shift. If you look at patterns toward self-sufficiency and sustainability, future buildings and communities will have renewables on-site and vertical farms.

Molly Wood Voice-Over:
Time for a quick break. When we come back, more on how micro-farms work and whether you can get one at home.

Molly Wood Voice-Over:
Welcome back to Everybody in the Pool. We're talking with Alexander Olesen of Babylon Micro Farms about growing food in a whole new way.

Molly Wood:
How do micro farms work? They're high-tech. You don't need a green thumb.

Alexander Olesen:
A lot of technology and innovation goes into large-scale vertical farms. We sought to miniaturize those features: dosing nutrients, controlling pH, irrigation, and lighting. We designed it so we could run it remotely.

We have a team here like air traffic control, watching these plants grow, controlling the variables, and remotely managing the farms. That makes it easier for people to start growing their own food. Most of our farmers aren't farmers and have never grown food before. We're remotely managing it and supporting them so they just plant, harvest, and clean.

Molly Wood:
How did you learn all this?

Alexander Olesen:
Plenty of mistakes along the way, trial and error, but my co-founder and I are passionate about developing hardware, technology, and hydroponics. As a company, we're about continuous improvement, encouraging learning and studying.

Molly Wood:
Describe the installation for us. What's it like to have one of these farms in a facility?

Alexander Olesen:
We're B2B today, working with corporate clients, from major food service companies to nonprofits. They order a farm, and we ship it on a pallet. Installation takes a couple of hours. The farms are plumbed into a water line, and once filled with water, it takes over.

You scan seed pods into the farm using a QR code system, so the farm registers the crops. We then administer a recipe, alert people about what to do, and they're growing. Depending on their use case, we set them up on a schedule so they could be harvesting every week or month.

Molly Wood:
You mentioned feeding refugees. Do you see this as an equity issue?

Alexander Olesen:
In the US, we're often implemented adjacent to other local sourcing initiatives. Whether it's supporting local farmers or encouraging nutritional education, the farms are a great way to do that.

In many cases, clients build outdoor farms, but that's only good for certain months of the year. They have indoor farms as the year-round alternative. We're part of the equation. We're in relatively low-volume production now, but our path is to scale up and drive costs down. Our engineering team is working on designing them to be manufactured more affordably and easily.

Molly Wood:
Let's talk more about adaptation and resilience.

Alexander Olesen:
I wouldn't want to decentralize completely, but it's fun to think about living off micro farms alone. It's part of the solution. We should move to more regenerative practices, which will involve growing things suited to the season and locality. That will limit the ability to import.

Micro farms can grow lettuce and herbs on-site, freeing up land for more local, regenerative practices.

Molly Wood:
For people unfamiliar…

Alexander Olesen:
When you look at mega cities of the future, greenhouses and vertical farms within city limits are a powerful tool and will be necessary.

Molly Wood:
Is that a large-scale movement?

Alexander Olesen:
It's got to start somewhere, but thinking about a country's future in an uncertain climate, localizing the food supply chain is a national security issue. Some countries are more proactive. The Netherlands is one of the world's largest food exporters, though it's a small country because they grow everything indoors.

Molly Wood:
What percentages of indoor farming are compared to traditional agriculture?

Alexander Olesen:
In the US, less than 1% of leafy greens are grown indoors. Even though it's an exciting emerging industry, it's a tiny fraction. The forecast says it will increase significantly over the next few years.

Molly Wood:
What makes it more or less economically viable?

Alexander Olesen:
There are a couple of big drivers. LED lighting costs have fallen drastically, and it's more efficient. Indoor farms and greenhouses with supplemental lighting are much more energy efficient.

The next waves are crop genetics and AI. With crop genetics, there are opportunities to grow new varieties indoors. AI complements that with growth recipes that supercharge growth.

Molly Wood:
People sense that agriculture is broken. Can you dig into some ways that it's harmful?

Alexander Olesen:
Agriculture uses 70% of fresh water and is responsible for 25% of carbon emissions. That doesn't include soil degradation or fertilizer runoff. In some areas, pesticides and fertilizers bleach the soil. We're passing a tipping point where the ecosystem collapses.

Molly Wood:
Does indoor farming alleviate the need for fertilizer and pesticides?

Alexander Olesen:
Indoor farming uses energy. If sourced renewably, it can be sustainable across the board. We still use fertilizer but don't use pesticides. There's almost no transportation and handling.

Molly Wood:
What's your ultimate dream for Babylon Micro Farms?

Alexander Olesen:
Every organization should have their own indoor farm, growing some or all of their food on-site. In the near term, we want to see a farm in every school. There are benefits to growing food on-site, from emotional health to STEM education.

As a company, we've built a software platform to run these farms remotely. We're developing different hardware systems to grow different crop types and serve different markets.

Molly Wood:
How much does the system cost?

Alexander Olesen:
Our flagship model, the Gallery, is $15,000. It's about the size of a double-door refrigerator. We have a service and subscription fee. We just launched our STEM Garden product for $6,500. It's a smaller footprint unit, but that's the cost reduction we like to see.

Molly Wood:
Great. Anything else we should know?

Alexander Olesen:
No, thank you so much. This has been great.

Molly Wood:
Where can people find you?

Alexander Olesen:
I'm on LinkedIn as Alexander Olesen, and you can find us at BabylonMicroFarms.com.

Molly Wood:
Alexander, thank you so much for the time. I appreciate it. Grow your own food, everyone, if you can.

Molly Wood Voice-Over:
Vertical farming is still a tiny fraction of overall agricultural production, but what's not to like about locally grown, resource-efficient food, especially for certain high-value crops like leafy greens and herbs?

Decentralizing some food production could help communities become more self-reliant and resilient to disruptions in supply chains from climate impacts.

Of course, vertical farming requires energy and resources, but combining it with regenerative agricultural practices and sourcing renewable energy could go a long way in reimagining sustainable food systems for the future.

That's it for this episode of Everybody in the Pool. Thank you so much for listening.

Email me your thoughts and suggestions at in@everybodyinthepool.com and find all the latest episodes and more at everybodyinthepool.com. If you want to become a subscriber and get an ad-free version of the show, hit the link in your podcast app of choice.

Thank you to those of you who already have. See you next week.