“A couple of years ago, field grown lettuce accounted for something like 98.5% of the market, so things are changing very rapidly.”
Counterintuitively, growing lettuce and other leafy greens in water uses considerably less water than growing them in soil, claims Day, who favors a technique pioneered at Cornell University called Deep Water Culture (DWC) hydroponics, whereby seedlings are planted on small rafts that float in large tanks of nutrient-rich, oxygenated water.
This is higher-yielding and more energy efficient, with lower installation costs, than the Nutrient Film Technique (NFT) in which plants sit on gutter-like channels with water running down the channel to provide nutrients, claims Day.
Suncrest lettuce will stay fresh for two to three weeks in the refrigerator
But doesn’t the water become rather grimy?
No, explains Day, who is licensing Suncrest’s patent-pending DWC technology to local growers – many of whom have been struggling to make money out of cut flowers – training their staff, buying most of their production, and developing local marketing, sales, and distribution platforms.
To keep the water clean, modular units that plug into the tanks filter and sterilize the water, which is also temperature- and pH-controlled, and tested on a regular basis for pathogens and substances such as iron or arsenic.
As the plants are not watered from above, the leaves stay dry and clean, and because the roots are always in water during the growing cycle, they are also 'super-hydrated,' which means a Suncrest lettuce will stay fresh for two to three weeks in the refrigerator, whereas field-grown lettuce will typically wilt after a few days, claims Day.
“We also cut the roots off, unlike some other hydroponic growers, because if you leave the roots on, they suck the nutrients out of the leaves to sustain themselves.
"When we started, we were knocking on restaurant doors and giving out whole boxes of lettuces to chefs, and chefs were blown away by the flavor, the fact they don’t have to remove the bottom leaves, and the fact they last so much longer, which means there is so much less spoilage.”
Grocery store produce managers are also showing interest, he says, although the focus for Suncrest has thus far been primarily on the foodservice channel.
“I was talking to a produce manager and he said, ‘You see that field lettuce sitting on the shelf? Every day I throw away 50% of it as waste because it just doesn’t last. But every single head of lettuce we get from Suncrest we sell, so our margins are better with the Suncrest product.”
Consumers, who are more aware of hydroponics than you might think – according to Day - love the fact that the products are locally grown, have a sustainability message (which is highlighted on pack) and last longer - naturally.
“Sustainable, indoor agtech has come into its own as an industry. What differentiates Suncrest is its scalable licensing model that not only includes turnkey hydroponic systems, but also builds brand and market share within each local market. This is the best of all worlds for growers: they can now grow a branded product rather than a commodity, using tools and techniques that substantially increase their revenues and profit per square foot.”
Jim Day, founder & CEO, Suncrest USA
In the field, it takes 16-38 gallons of water to grow a single head of lettuce; hydroponically grown lettuce uses one gallon
But the real show stopper for the DWC system is water use and yield, says Day: “In the field, it takes 16-38 gallons of water to grow a single head of lettuce, whereas hydroponically grown lettuce uses one gallon. There’s also the issue of available agricultural land. USDA reports that the yields for lettuce are about 0.4 heads per square foot per year and for hydroponics it’s 25-30 heads, so it’s way more efficient.”
This is due both to packing density and the number of growth cycles per year in a greenhouse, he explains: “In our system, they spend 10 days to two weeks in the nursery [seeds are planted in coco coir - coconut husks with some added peat], and then on average, once seedlings are transferred to the rafts, they can grow to full maturity in 21-28 days, although this can slow down a little in the winter. Field grown systems can take 70-80 days from seed to harvest.
“We also know exactly what is being fed to the plant, whereas you don’t always know exactly what’s in the soil, so the nutritional value of plants can also be enhanced with hydroponic growing systems,” he adds.
“The other great thing is that you never have to do any weeding or watering, and we don’t use any synthetic pesticides.”
Organic certification not mission critical for hydroponics
That said, right now, most hydroponic systems can’t get certified organic, and the National Organic Standards Board is still mulling over whether this should change.
But Day says organic certification is not the be all and end all for the hydroponics industry.
If you ask consumers what they want from produce, they want fresh, local products that haven’t been sprayed with synthetic pesticides, and Suncrest delivers on all three points, he argues. All products are sold within a 100-mile radius from a given facility, and the growing system doesn't use synthetic pesticides.
“When we started, some people were saying you have to be certified organic, but I don’t think that’s the case. When it comes to produce, about 85% of the argument for organic is about pesticides, and we don’t use synthetic pesticides.
“The other issue is local. You’ve got organic food coming in from China and Mexico, whereas our tagline is always local, always fresh. We’ve not had any pushback in three years on the organic issue, not even from chefs.”
BRANDING: The beauty of the Suncrest system, says Day, is that it allows local growers to use their own names but retain a recognizable national branding architecture (the yellow sunshine logo).
“In the San Francisco area, the community knows [Suncrest licensee] Pescadero Growers, so it makes sense to feature them in the branding, because people want locally grown produce.”
It’s all about scale
So can anyone with a greenhouse and some entrepreneurial zeal make money from hydroponics?
No, says Day. “The economics don’t work very well until you get to a much larger scale. It’s all about scale. I’d say that for our system. The minimal viable product for a licensee is a little over an acre for a greenhouse.”
Founded in 2012 by James Day, Suncrest struck its first licensing deal with Plum Hill, a small flower grower on Whidbey Island, north of Seattle, which retrofitted its greenhouses with Suncrest's deep water culture (DWC) hydroponic system.
A year later, Suncrest signed its second licensing deal in San Francisco with the much-larger cut-flower operation Oku (Pescadero Growers), which is now supplying significant quantities of lettuce grown using Suncrest’s DWC system to premium grocers and upscale restaurants.
Currently, Pescadero can produce nearly one million heads of lettuce (Bibb lettuce, Red Romaine and Green Romaine) per year, a figure set to double following an expansion program over the next six months or so, says Day.
“We’re now talking to another group looking to set up a very large greenhouse for the Seattle market, and we’re talking to a group in Oaha and other sites as well,” adds Day, who is currently looking to raise sizable sum in a Series A financing round.
“Over time our projections are looking at opening in roughly 40 markets and we anticipate growth nationwide, although from a margin perspective, it’s slightly more appealing to be further south or in areas where there is more sun.”
Suncrest facilities are covered by a polycarbonate ‘skin’ that disperses natural sunlight, rather than year-round artificial light deployed by some indoor vertical farming operations, he says.
“My personal feeling is that if you can provide 70-80% of the light plants need via sunlight and you just have to supplement that for part of the year, it’s a lot less expensive and the plants are happier.”