Organic Produce to Urban Populations

Backyard hobbyists, university researchers, nonprofits, restaurants and even inmates at a federal prison in Indiana are growing food using aquaponics, a technology for raising fish and plants together in a recirculating system. So far, though, no one has been able to build a large-scale, commercial aquaponics business.

In an abandoned brewery in St Paul, Minnesota, a startup company called Urban Organics is trying to change that. Since last spring, Urban Organics has been raising tilapia, basil and lettuce, with the help of a much-bigger neighbor – a $7bn industrial company called Pentair that believes that aquaponics is on the verge of becoming a viable form of farming.

Aquaponics combines aquaculture (fish farming) and hydroponics (growing plants in water). Fish – in this case, about 3,200 tilapia – are raised in big tanks made of high-density polyethylene. Their wastewater flows out of the tanks, gets cleaned up a bit and is pumped to the growing beds, where it becomes food for the plants. After the plants extract nutrients from the water, it’s filtered again and returned to the fish tanks. While the process is energy-intensive – the plants need artificial light to grow indoors – food can be grown year-round in urban areas, near to markets.

“What happens when you locate a food production facility to a place that needs urban renewal?” asks Fred Haberman, a founder and part-owner of Urban Organics.

The logic behind Pentair’s interest is clear: the company, which is based in Manchester, England, and whose main US offices are in Minneapolis, makes precision irrigation equipment for farmers, as well as energy-efficient pumps, advanced filtration technology and wastewater treatment systems used in many businesses, including aquaculture. Aquaculture generates about $75m in annual revenues for Pentair, aquaponics a much smaller amount.

“We’re going to figure out how to commercialize this better than others,” says Todd Gleason, who is senior vice president for global growth at Pentair. “This concept is still new. We’re learning all the time.”

To that end, Pentair provided the design engineering and donated the water management system being used at Urban Organics. The startup also got a boost from the city of St Paul, which acquired the former Hamm’s Brewery for $1.2m back in 2001 but sold the building to Urban Organics for just $35,000. Urban Organics has invested about $1m in renovations.

While other startups, notably BrightFarms, grow food in cities, aquaponics firms have the unique ability to produce both fish and plants, including herbs, lettuces and kale, year-round and deliver them to supermarkets on the day they are harvested.

It’s too soon to judge the success of Urban Organics – tilapia take about nine months to mature, so the company hasn’t sold its first batch yet – and the company recently shifted its mix of plants away from lettuces and towards basil because herbs generate higher margins. It hopes to expand within the brewery, perhaps to grow salmon or trout, and it is going to save energy costs by replacing incandescent bulbs with super-efficient LEDs.

“This is an experiment,” says Haberman. “We’re going to make mistakes because it’s never been done before. Farmers need to be smart and adapt.”

But, he adds: “The economics are starting to look good.”

Habermas is a veteran marketing guy with a commitment to organic food; his firm’s clients have included the dairy cooperative Organic Valley and Annie’s Homegrown. He and his partners credit Will Allen, whose nonprofit Growing Power has developed urban farms in Chicago and Milwaukee, including an aquaponics facility, with inspiring their work.

Elsewhere, other aquaponics startups are taking hold. One of the biggest is Farmed Here which operates just outside Chicago and sells organic baby greens and herbs through 45 Whole Foods and other supermarkets nearby. The farm has operated since early 2013 and its chief executive, Mark Thomman, said business is brisk.

“We have more demand than we have production,” Thomman said. “We’re expanding.”

In Winter Garden, Florida, meantime, Green Sky Growers operates an aquaponic farm on a rooftop, producing lettuces, herbs and tilapia. Smaller-scale commercial facilities operate in Florida and California, and Dr James Rakocy, one of the world’s leading experts on aquaponics, has estimated that there are 3,500 hobbyists who grow fish and plants using aquaponics and another 1,000 systems in schools.

None of this guarantees that aquaponics will ever become a real business. But Pentair’s Todd Gleason is optimistic.

“Things move quickly when you have a proven model,” he said. “You have to fail fast and cheap, and be committed to long-term success.”