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A new generation of growers are leaving the field to grow a range of produce in perfectly climate-controlled boxes year-round

Hydroponic produce uses much less water than field-grown produce, without the need for pesticides (Courtesy of CCubicFarm Systems)

“It’s minus 38 outside and we’re growing lettuce!” says Dave Pfaeffli, beaming over a Zoom call in early February from his home outside Busby, Alta., about 45 minutes northwest of Edmonton. He’s explaining how he and his wife, Alyssa, became indoor hydroponic farmers three years ago as early adopters of a technology that lets them seed, transplant and harvest leafy green vegetables, herbs and microgreens 365 days a year.

The couple is harnessing tech from Langley, B.C.-based CubicFarms Systems. The Pfaefflis have 14 automated indoor growing modules, each housed inside its own custom-built crate that is eight feet wide by 40-feet-long and resembles a shipping container. In a 9,000-square-foot building that sits on their farm land, the Pfaefflis can grow more than 5,000 heads of lettuce and more than 11,000 herbs and microgreens at one time.

The greens are moved along a patented undulating path (patented as Crop Motion Technology) that controls LED lights, temperature, water, humidity and CO² levels at the touch of a button. “You can even harvest sitting down,” says Alyssa, describing how the plants are brought forward to the operator on a rotating conveyor system—a contrast to other vertical farming systems such as “rack and stack” models that require scissor lifts to care for and harvest the plants.

While they’re relying on power to run the lights and tech platforms, they’re saving on space and water, using only two bottles per head of lettuce compared with 40 bottles for a head of field-grown greens—and without the need for pesticides or herbicides. They use 95 per cent less water than what they would have used in the fields.

But, for the Pfaefflis, it was a buy-in to more than just the technology. After using the system independently for nearly three years, their operation was acquired by CubicFarms in October, turning their family farm into an R&D lab and “farm school” for other clients, called the Alberta Grow Centre.

CubicFarms was founded in 2015 by farmers Jack Benne and his son, Leo, who, after visiting Puerto Rico following a devastating hurricane there, worked for years to find the solution to problems faced by outdoor farms. Described as a “local chain ag-tech company,” the corporation has two sides: “Fresh” develops, manufactures and sells modular farming systems for clients who, like the Pfaefflis, grow leafy greens. The other, newer side is called “HydroGreen,” which develops a similar technology specifically for livestock feed using a patented system that churns out fresh carpets of wheat and barley that get mixed into the hay and fodder that cows and other animals usually eat.

It might sound like a sci-fi experiment but farming tech companies like CubicFarms—with a market cap of around $200 million—are starting to take a bite out of the $320 billion traditional farming industry and the $416 billion nutrition technology sector. Their overarching strategy is to work with farmers instead of competing against them like other start-ups, such as Plenty and AeroFarms, which makes CubicFarm’s model unique in a hot market.

CubicFarms CEO Dave Dinesen is eyeing global markets for the company’s indoor farming system (Courtesy of CCubicFarm Systems)

Last year saw record-breaking investments in agricultural technology, with an estimated 632 start-ups globally raising $12.23 billion in venture capital funding. That’s because commercial-scale indoor systems that grow fresh produce in a controlled environment address the most pressing global and local problems farmers face, including supply chain disruptions and labour shortages, both of which have been especially acute during the COVID-19 pandemic. They’re also immune to drought, other unpredictable climate changes and even listeria outbreaks.

CubicFarms is in the business of tech. It doesn’t directly sell food but its growth strategy involves providing support in the form of business consulting and matchmaking; the company finds suppliers for growers to ensure that the growers succeed. It connected the Pfaefflis with Sysco, Whole Foods, Fresh Point and others. Sysco has recently announced that its purchasing fresh produce from growers using the CubicFarm System, which is a big deal for smaller farmers looking for customers for their produce.

CubicFarms CEO Dave Dinesen says this year there will be more news about partnerships involving purchasing, financing and, possibly, seed supplying.

On the Fresh side, Dinesen says we’ll see even larger installations like the 96-module FreshHub system recently announced for the Lower Mainland area of Vancouver by a private investor group, the company’s biggest project to date.

“As a company, we are moving towards these larger installs because that’s really what’s going to move the needle,” he says, “so that those [food service companies and large retailers] that buy the produce can truly lessen their reliance on imports.”

International markets are also a key piece of the strategy. CubicFarms announced plans last April for a CubicFarm project in Australia. Dinesen says he expects to announce larger global partners for its FreshHub product by the end of 2023 or 2024.

Since acquiring HydroGreen Tech livestock feed systems in 2019, the company has installed machines in Canada and the US, including a large beef cattle ranch and dairy farm in Wyoming as well as in Europe, with a farmer in Italy feeding water buffalo to make buffalo mozzarella. CubicFarms has been lining up dealers to sell HydroGreen machines in North America. Dinesen intends to make more sales in Europe and then the Middle East.

Steve Hansen, an ag-tech analyst at Raymond James, is optimistic about revenue picking up across both parts of the business, but he’s especially excited to see what HydroGreen offers. “There are no competitors of substance,” says Hansen. That said, he sees several for Fresh. “There are several dozen parties [in that arena] that are advancing their own growing technologies and, in most cases, trying to grow their own products.”

Still, Hansen forecasted a 100 per cent increase in CubicFarms’ stock price. In a January research note, he predicted a “breakout 2022” across both divisions.

“HydroGreen is probably the world’s most valuable patent for addressing land usage, water usage, herd health, herd performance and environmental benefits in the livestock industry,” says Dinesen. “I think it’ll be proven out in the next year or so.”

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Claire Sibonney is a National Magazine Award-nominated writer and editor based in Toronto.