Episode 53 Transcript: How to secure our future food supply

Molly Wood Voice-Over: 

Welcome to Everybody in the Pool, the podcast where we dive deep into the innovative solutions and the brilliant minds who are tackling the climate crisis head-on. I'm Molly Wood. Today, we're talking about sustainable agriculture and food production by which I mean, food production that emits fewer greenhouse gas emissions and uses fewer water and land resources, Sure. But also food production that can be sustained even when the impacts of climate change make agriculture much more challenging. Also, there are robots. But indulge me for a moment and you’ll see why I was reminded of this story in a few minutes.

Almost 10 years ago now, I had this conversation with a friend who made this dark off-handed comment that climate change was going to get so bad someday that we might not have like fruit and berries.

And a few months after that I was in a hotel room on a business trip in New York and I’d ordered room service and it came with a side of berries which I wasn’t that excited about. I’m more of a savory person, I guess. And I was about to walk out of the room and head to the airport and leave them there. I know, I know, look, now I know a lot more about wasted food. Anyway for some reason I suddenly thought of what my friend had said, and I was like what if someday I don’t have berries!? I better eat these! And so I stood there next to my suitcase and ate every one of the berries, and they were so delicious. Maybe because I was imagining never having them again, and for some reason that memory always sticks with me and it definitely did during this conversation.

Gilwoo Lee:

Hi everyone. My name is Gilwoo Lee. I'm the founder and CEO of Zordi. We are an ag-tech company building autonomous growing solution, combining greenhouses and robots and AI to really bring high quality, sustainable food to everyone.

Molly Wood:

Spoiler alert! their first crop is berries. You get it now.

I love this. I love this because I have really been trying to focus on food and agriculture as almost, I feel an under, under understood part of the climate universe. And so, yeah, so tell me about the part of it. Did you come at this as a climate solution or a food solution or a pollution, you know, all of that?

Gilwoo Lee:

Yeah, actually came interesting as a climate solution. So I, my background is in robotics and AI. And I wanted to bring that to feel, to an industry where I thought could make a big impact in terms of like with the climate change and food and ag and indoor farming, everything that we'll talk about today, like food and ag is one of those sectors that will be most impacted by climate change. And also at the time, there's a lot that this sector can do to be more sustainable. So really I started this with the climate angle, but then as you said, I realized that when I talk to investors or climate tech people, we are sort of only on the boundary. So despite the magnitude of what we have to do and what we can do, we're still at the boundary of the climate stuff.

Molly Wood:

That's so interesting because it is a real, I mean, let's just take the different parts of this, right? One at a time. From the sustainability perspective, agriculture, as you mentioned, has a lot to do and is a huge contributor to greenhouse gas emissions. So talk about just that part of it first. There's so many pieces to this.

Gilwoo Lee:

Yeah, yeah, totally, totally. So at a super high level, right? About 70% of fresh water is being consumed by agriculture. And typically, especially when it comes to fresh produce, because so much of fresh fruits and vegetables have to go through cold chain, long distance cold chain, it ends up about 67% of the total carbon footprint coming out of fresh fruits and vegetables come from just like the cold chain. So the more you can bring them closer to the market and do some success do actually sustainable management of the crop production. You just immediately get to significantly reduce that and this is even more prominent in more advanced countries because people are willing to pay that premium or to bring in high quality food, meaning typically, unless they're available locally, you just, the customers end up kind of requiring the retailers to bring them from somehow, somewhere, right? From Mexico, Canada to the US, for example. Now, lastly, despite all that, about more than 33% of the fresh produce kind of gets spoiled by the time they reach the retailer. So everything here ends up just creating a lot of carbon footprint. So by making these a lot more sustainable, we can make big impact in overall global carbon footprint coming out of fresh food.

Molly Wood:

And then, okay, so you have the sustainability impact upfront. And then as you mentioned, you also have agriculture being impacted by a changing climate. You have a food security question.

Gilwoo Lee:

Totally, yes. Yeah, so that's the bigger, big part of it as well. We have to figure out where it's going to be impacted the most and really figure out how to remedy that and how to make a more climate-resilient way of food production. Just to give you an idea, even just in 2022, about 50% of Californian farmers had to remove multi-year crops due to drought. And it's really not just about that the world's getting warmer, it's really more that the frequency of these extreme weather conditions become more and more frequent. So the field ends up just having a lot more impacted by those frequent weather changes. And we expect about a 77% increase of average area burnt by fire in California through from now till like 2100. So we're just losing a lot of crop land year to year.

We have to start building, okay, how do we protect our the way how we do the farming? How do we bring them closer to the market? So really everything has to be kind of started at be thought and done in a different way. And I don't mean to say that field agriculture will no longer exist. It's more that we have to start complementing them and supplementing them with different ways of production of food. And even for the field, you know, there are I know that a lot of.

new genetics, new breeding, and a new way of farming happening that are being tried to be a lot more climate resilient. So it all has to be happening at the same time. But the really big question that we have to address is, okay, how do we make it so stable at the same time? How do we make it climate resilient? Both of them are just like the two key things that we need to solve in agriculture.

Molly Wood:

Right. Okay. And so it seems like step one of your solution is bring it indoors is greenhouse and greenhouse agriculture has of course existed. But what were the problems you identified with it being a bigger part of this mix?

Gilwoo Lee:

Yeah, so the core thesis, the mission that we're trying to achieve with our company is how do we make this high-quality system of produce available to everyone? And indoor farming, as you mentioned, from greenhouses to vertical farms, it's really a spectrum. And even in greenhouses, there are these low cost greenhouses that have been existing in like high tunnels or hoop houses since the 1700s to the really glass, glass meta-structured greenhouses that have LEDs and all of those. It's all like a really big spectrum. Now, what is in our core question is, what is the right mix of technologies and state of the art and what's been proven out in the history that make it truly hyperscalable and be able to get to the point where in terms of cost of reaching retail ends up being equivalent to the field. Otherwise, you're just only stuck in the niche market and you're not able to actually defeat the world. So that's where I saw the bigger opportunity where the robotics and AI combined actually with low-cost greenhouses can really work.

Molly Wood:

Okay, so tell me what you are building and what you have built. I'm guessing that your background suggests you created some pretty cool robotics.

Gilwoo Lee:

Thank you. Thank you. So what we've been building is really just to repeat what I just said, but to get into a little bit more details, combining, starting with the lowest cost type of greenhouses, what's called hoop houses and high tunnels, and bringing in automation of automated irrigation, automated nutrition management, automated environmental control, all of that. And on top of that, actually bring in robotics and AI robots and AI to really do all the management and the manual labor and to really continue to make the decisions for these farms and what really the robots these days are getting cheaper and cheaper and AI is getting better and better. So it's actually a very low cost way of automating in the sense that previously, when we talked about robots, say in the 1980s, 1990s, these are all big robots, factory robots, cost millions of dollars. These days, these robots are less than 50K. At least the ones that we're going to be building. So these are actually a lot cheaper than high-tech industrial automations. And industrial automation doesn't solve everything.

Molly Wood:

So what are the robots capable of doing? Are they planting, watering, and even harvesting? Some version?

Gilwoo Lee:

Yeah, so what we've been focusing on is really reducing the, doing all the most challenging works in these greenhouses. So we have mainly two types of robots that we're currently developing. One of them is actually a scouting robot. And those are like experienced growers and farmers that are just like relentlessly monitoring the plants every day and making decisions about, oh, this particular section needs more water or this particular section is developing maybe early nutrient deficiencies, like making all these observations and really kind of getting to, okay, this particular section soon needs some pruning. All of those decisions are being made based on these scouting robots observations by our AI and really replacing what a 20, 30 year experienced growers in that particular region would only be able to do. And that's a really important part because typically farmers that are top 20% is able to generate twice more revenue than average. And that's really because they're so, and they can only do that after decades of experience. For us to make this truly scalable, you have to really be able to do these repeatedly over and over.

And that's really how, how big scalable businesses have evolved. You figure out the right recipe and you figure out the right process to copy paste. And that's what these AI and scouting robot is able to do. Now, the other part is the robots are able to do harvesting, sorting, and packing on the fly all at the same time without actually even touching the fruits sometimes because they go for the stem instead of touching their food. That's extremely food safe and they know exactly where these fruits got picked. Now, on top of that, we do have additional kind of commercialized robots that are that we're incorporating as part of our system as in like spray robots and we also utilize automated irrigation system and we're either developing or sometimes just buying some of these environmental controlling uh, environmental controlling equipments. So a lot, we are definitely integrating some of the things that's already been proven out in the industry and then really building the core technology that doesn't exist in the world yet, but it's so critical for these greenhouses and indoor farms to be scalable.

Molly Wood:

Got it. So it sounds like you're using kind of off-the-shelf robot parts and what your special sauce is, is building in the ability to do this, to replicate the knowledge base of, you know, of a farmer with decades and decades and generations of experience. And then of course also do the manual labor.

Gilwoo Lee:

Yeah, definitely. Our secret sauce is in the AI and how to make these decisions. And some of the parts of the robots are developed in this priority to Zordi and that we develop the core pieces of the grippers or the core pieces of the robot that really enables our robots to perform a lot better than existing robots in the market.

Molly Wood:

And then what are the crops that you're growing today? I see a lot of berries on the website.

Gilwoo Lee:

Yeah, so we started with berries for two reasons. One is that it is one of the crops that the customers or market like loves, and it is also highly perishable, very short shelf life. So you end up just throwing out a lot. So if you're being able to starting with berries and being able to deliver it is a big kind of big sustainability boost for our and getting closer to our mission. Now, the other part of it is that it lets us berries are pretty delicate. So, and as a plant, it's also very sensitive. So if we can figure it out for berries, it's a lot easier for us to move on to other crops like tomatoes, cucumbers, peppers, and things like those. So just to answer your question, our main product line and the only product line right now are berries is a strawberry product line. However, we have demonstrated when it comes to harvesting the ability to transfer our core technology to cucumbers and cherry tomatoes within less than a month.

Molly Wood:

Wow, amazing. And then are the berries, what is your sort of commercial availability now? They're in some stores, right?

Gilwoo Lee:

Yes, there are some stores we've been getting really, really great feedback. We are mainly selling in Manhattan and a little bit in New York and New Jersey area, depending on the volume that's available. We have a pretty small two pilot farms, one in Western New York and one in Southern New Jersey, and we have exclusive genetics that are naturally just very sweet and aromaful that we're selling in a few stores and including Wegmans, H Mart and very recently we started serving a fine dining restaurant called 11 Madison Park. I think some people know that restaurant.We actually were very excited because they reached out to us. Their sous chef just found out our berries from Wegmans and they really just loved our flavor. So we started serving them.

Molly Wood:

Oh yes. That's a good get. That's a very good get.

Gilwoo Lee:

Right now we are not fully year round yet and that's part of our growing trial trials. So we have seasons going from October through May or June and then we're now adding in more kind of a varietal test to get to year round next year.

Molly Wood:

It's so, so with restaurants, I wonder, 11 Madison came to you because of flavor, or did they also want to tell a sustainability story? I feel like both of those things are happening in restaurants these days.

Gilwoo Lee:

Definitely. I think so though they first came to us with the flavor but they I'm pretty sure they knew that we are local and we're serving you know them directly locally every day so that's already kind of you know known thing I think overall we haven't been reaching out to the restaurants too much except for like the short-term marketing kind of events but I think overall the benefit or

Well, we'd love to engage more with restaurants because a lot of restaurants are looking for that local, fresh kind of fresh produce.

Molly Wood VO:

Time for a quick break. When we come back, more on the immediate future of robotic greenhouse fruits and berries … and where you can find them if you happen to be in New York!

Molly Wood VO: Welcome back to Everybody in the Pool. We’re talking with Gilwoo Lee, the founder and CEO of Zordi, building robotic and AI-controlled greenhouses to help make sure we still have berries in the future.

Molly Wood:

So how big are the greenhouses and how big can they be?

Gilwoo Lee:

Yeah, so greenhouses can be actually as big as 30 acres, 50 acres. Typically, the glass greenhouses that are built by a built that's called Dutch greenhouses, they would be like a multiple big chambers. Each of them would be like two acres roughly, and each of them come with their own climate control. We intentionally actually, by sticking to low cost high tunnel greenhouses, our greenhouses are way more modular. They're like 0.2 acres. And what that lets us do is to really build them in less than three months and build them in parallel with very minimal kind of foundational work. So we can build, you know, a hundred of these, you know, all in parallel and get it done relatively, we're certainly not at that scale yet, but we know that can be done and a lot of people do it as they scale and we are standardizing our own set of greenhouses and equipments to really be able to do that.

But yeah, so right now what we have in Southern New Jersey is only about 0.6 acre and we're building, we're going to get up to two acres by the end of this year, which let us deploy about seven robots and we show all the robots in action and that'll be exciting part of our milestones.

Molly Wood:

You look really happy when you talk about robots. I have to say. I see where the passion lies here.

Gilwoo Lee:

Both of them, but even just for today, we got a text from 11 Madison Park about how they would always love to take more berries. So it's always good to know that our clients, we as a result of our automation, get to deliver the best fresh produce.

Molly Wood:

I mean, that's amazing. How did you get interested in food? I mean, obviously you said that it was an interest in climate solutions, but how did this evolve? What's the origin story for you?

Gilwoo Lee:

Yeah, so honestly, this might be a really first time ever like saying it outside of my family, but there was also a little bit of a personal reason too. And I'm serious because I don't actually get to talk, bring this up to investors a lot. In that, so as a kid growing up, I had a history of eating disorder.

And I basically took myself to, brought myself to eating disorder treatment center in sophomore year in college and found out that it's actually pretty common thing for these, you know, highly competitive kids. And it took me about four years to really get to what is considered to be normal. However, in the process of that recovery or just like learning with a lot of behavioral treatments, I became very sensitive to how my body and mind reacts to the availability of fresh food or food that makes me feel good. And I traveled and I lived a lot across different countries and different cities. And I lived in Boston, I lived in Sunnyvale, I lived in LA, Seattle, Pittsburgh, and even in Jackson, Tennessee and Japan, Korea. And I got to just observe the availability of fresh, whether that's produce or seafood or whatever, it's just so different and different part of this country and also just in the world. And I knew that this was just something that I felt deeply personal about. And then I realized, okay, this is actually where the passion of my robotics and AI and sustainability and my personal motivation all kind of come together. So, it's not that I started with food, but then once I found out that agriculture is one of the sectors that climate change is going to impact a lot, and then I just, the more I looked into it, the more I felt also very personal about it to really get passionate.

Molly Wood:

Wow. Well, thank you for trusting me and us with that story. That's a remarkable way to come to this. Um, so when, so when was this, when did you found, when did the company start and what's the stage now?

Gilwoo Lee:

Oh, sure. Yeah,  so I started this company in the middle of COVID, 2020, as I was graduating from my PhD at the University of Washington. And back then it was just me and my first kind of goal was to, okay, I got to go find my co-founder. And in the process, I actually got the investment from Khosla Ventures. And Khosla is actually very committed to sustainability and climate-related startups as well. So, and then my co-founder joined early 2021. And he was the head grower at a vertical farm called Plenty before joining me. And he's a sixth-generation farmer. So he came with a lot of breadth and depth of expertise. Now fast forward, we have about 15 people. Many of them are engineers. Some of them are plant scientists. And we have two farms up and running. Both of them are at pilot and R&D. Now we're getting into a slightly more skilled version by the end of this year. We're going through and we'll be finishing up our fundraising for a plus round in the next few months.

Molly Wood:

Got it. And then who are the customers? Who installs and operates and sells the produce eventually from greenhouses like this?

Gilwoo Lee:

Right, right. So yeah, for us right now, we're still in the phase of really demonstrating with our own solution and with our own kind of production and delivering to Whole Foods and Walmart to Wegmans and eventually we want to continue to own and operate some of these greenhouses because it is really important for us to really keep pushing the state-of-the-art technology and testing those out with our own farms. However, as we reach a certain scale, we will be looking for partners to really franchise these solutions out and we will be kind of giving them the entire system and entire genetics and entire automation. So that our goal for these partners is to really make it as easy and exciting in the sense that, you know, this is relatively low risk because the robots and AI provides all the decision-making for them and all the manual labor is reduced as much as possible. So very minimal, as long as you're very good at operation. And as long as you're very good at kind of keeping passionate about your, the farm. I want to make sure that these farms are as successful as our own and that those will be our future clients. Now there's the other part of it. Whole Foods and Wagon Mines and Wal-Mart, all of these retail partners will continue to be our clients as well as we introduce new crops.

Molly Wood:

Got it. And what is the sort of scale of farm that you imagine adopting this? Like I'm wondering if like the French Laundry sort of a dated reference, but would a farm-to-table restaurant operate their own or would this really work within small to mid-sized farms, commercial scale, how big or small?

Gilwoo Lee:

We would certainly be starting at the kind of commercial scale farms of, and we expect about 10 to 30 acres of these farms to make most sense. As we scale up, that it could actually get smaller. I think the key idea here is can we start, you know, we don't expect to deliver directly to restaurants or directly to individual stores. Our strategy is to be close enough to the regional distribution centers of retail partners, which guarantees us to really make, deliver within the same day to all the other, all the stores that they carry their fresh produce. And that's actually the most efficient way of doing it. And for that, the volume of these, each of these farms should be about 10 to 30 acres depending on the crop. So with that, I think it's, it's not super big, but it's still like a decent size commercial kind of growers that will be working with us.

Molly Wood:

Definitely. Do you imagine that they'll be combined with renewable energy generation? Now I just want everything to be its own little.

Gilwoo Lee:

I would love that. I think the overall, we're always very excited about the renewable energy and new technologies, solar farming, everything combined. And right now our core technology doesn't have any kind of, is very independent of the energy source. And that's very intentional. But once we are able to start using more renewable energy, it does make the farm even more sustainable and even more efficient. And what our AI can really do is to optimize the use of energy overall. Like what's the really, optimize when to use natural ventilation, when not to use heating. Like so overall, the use of energy, we can certainly optimize. And if once we start pairing that with renewable energy, then it'll be even better. However, the first and foremost thing, at least for now with is demonstrating the profitability of these farms. The nice thing with a lot of states really pushing for ESG is that there are a lot of really good energy-related, renewable energy-related grants that will help us and help our future kind of farm partners to utilize as they build these farms.

Molly Wood:

And how do you quantify the climate impact? Are you thinking of emissions avoided? Like how are you doing that math if at all?

Gilwoo Lee:

Yeah, so we're only getting started in that, so we only get to really make the kind of high level calculations. The way how we think about it is how much carbon footprint do we get to reduce by getting local? getting like not hyper local, but in the distance to the market. And what is the average kind of fields to the farm versus what we're able to produce and deliver. And the other portion is how much water do we get to save relative to the field farms? How much energy do we end up spending? Cause we do end up spending in the colder days in colder regions, like relative to field farms. Everything has to be taken into account that way. We lose a little bit when it comes to energy consumption to the field. However, we do gain a lot in terms of the water efficiency, chemical efficiency, a lot of those things, as well as the carbon footprint of delivery and the shelf life and the amount of food waste that we get to save.

Molly Wood:

And then, so people can find you, it sounds like, at least now on the East Coast and some of the stores that you've mentioned. And then, unit economics, you mentioned that you're getting two costs compared to how much do your strawberries right now cost compared to the competition?

Gilwoo Lee:

Yep. Yeah, so our cost is a little bit, I guess we're improving a lot of the yield and to get to the target yield. So it's heavily dependent on whether we can meet the target yield this year or not. We are, we know what we can say for sure is that as we reach the target automation and as we reach the nominal target yield. Our goal, we will be able to get to less than, about five times faster payback period than conventional indoor farms that are targeting premium markets, where we will be targeting more like conventional to organic markets. Like there's super premium ones, and then the kind of mass premium ones, and the conventional ones, and we're kind of going down the ladder, and really want to make sure that we can at least get our farms to be paid back in less than three years. And typically the range of indoor farming kind of payback period is more like 12 to 15 years if you're lucky, and it has to come with a lot faster, a lot heavier capex investment than ours.

Molly Wood:

Yeah. And then finally, what's the hardest thing about this are you finding?

Gilwoo Lee:

Yeah, for me personally, what's been rewarding and challenging was really understanding and breaking the agricultural kind of cycle. What I think is really hard about agriculture is that it is a long cycle. You know, robots are also harder and like hard and takes several cycles with hardware, but there are ways to parallelize it with agriculture. There's a limit in how much you can parallelize with your ongoing production. You also don't want to risk your production too much. So there are things that you just can't do at a given point. So that's been the biggest challenge and biggest kind of learning curve for us as a company. We do work, we work very closely with breeders and growers of these genetics that we carry. And we also always work well, try to work very closely with the industry experts to really continue to learn the industry is moving very fast, especially with the controlled indoor farming, controlled environment agriculture. So a lot of new trials are coming, results are coming up. That said, I think so we're really proud about, you know, compared to last year, even from the same kind of square footage that we're getting, we'll likely be getting about five times more yield compared to last year. And that just shows how much we're able to improve year over year but we're still a little bit far from, we're kind of getting there far from the target, either we know that we can get to knowing the plants of what these plants are capable of.

Molly Wood:

Right, right. The hard part with code, you can iterate quickly. You can develop things at the same time, but with strawberries, you only know if it worked when it comes to harvest time.

Gilwoo Lee:

Exactly. Right, and there's always a bit of a time delay, right? You get to see them within a few weeks, and there's a little bit, that one, I know now with a lot of trials that there's certain parts that we have to wait and see.

Molly Wood:

Yeah. It's life is tricky

Gilwoo Lee

Yep,  exactly.

Molly Wood VO:

In the meantime, if you happen to be in New York on a business trip or you know, because you live there you can find Zordi’s berries at Butterfield, Wegmans in Astor Place, and some H Marts in New Jersey and Manhattan with more to come, unclear yet whether they’re on any room service menus. That's it for this episode of Everybody in the Pool. Thank you so much for listening.

Email me your thoughts and suggestions to in at everybody in the pool dot com and find all the latest episodes and more at everybody in the pool dot com, the website. And if you want to become a subscriber and get an ad free version of the show, hit the link in the description in your podcast app of choice.

Thank you to those of you who already have and together, we can get this done. See you next week.