Food is probably the most important issue of our time. It's the effect on food which will be the most crucial consequence of the climate emergency.
Meet a man with a vision.
Eddy Badrina - Eden Green Technology
Anthony Day 00:00
Today I'm talking to Eddy Badrina, who is CEO of Eden Green technology, an organisation which claims to help people around the world sustainably grow large amounts of food using less land, water, and energy. Eddy, welcome to the sustainable futures report.
Eddy Badrina 00:17
Anthony, thanks for having me. Appreciate this opportunity to have a conversation.
Anthony Day 00:23
It's a pleasure. Now, with a growing global population, there have long been concerns about feeding everyone. But the Ukraine conflict has highlighted risks of grain shortages, price rises, and potential starvation in some African countries. The British government's recently published its food strategy to widespread criticism. And I've commented separately on that. The supply of food is firmly in the headlines. Your answer is for vertical farming and Hydroponics. Is that a complete solution?
Eddy Badrina 00:55
I would be remiss if I didn't say that we are a part of the solution. We are not a silver bullet. And I don't think anyone ought to claim to be the silver bullet to addressing the food supply. Both shortage now and then long term, just the supply for a growing population. I will say that as a part of the solution, I think we're a pretty special, pretty unique way to solve for that food supply. Because we basically are taking the farm from however far away it is, from the population centres and bringing it right next to distribution centres. So we're almost eliminating the entire cost and wastes associated with your traditional supply chain.
Anthony Day 01:41
So you're cutting down on food miles.
Eddy Badrina 01:44
Anthony Day 01:45
Now vertical farms and hydroponics have been around for a while. How are yours different?
Eddy Badrina 01:52
So that's a good question. The spectrum really goes from conventional farming, and then to greenhouses. And then all the way on the other end sort of vertical farming and we're a hybrid.
But with conventional farming, you know, call it 40 acres, you know, roughly, you know, from a hectare perspective, I think that's a hectare and a half, maybe I forgot. Well, acre and a half is a hectare, roughly. But from 40 acres, you're probably wasting around 800,000 to a million gallons of water a year to grow the food. And then to find that 40 acres. You know where it's cheap enough where the economics work, you're looking at hundreds of miles from a population centre. So there's waste from an environmental perspective. There's significant drawbacks. And then, and then from an economic and supply chain distribution perspective, you've got costs and waste associated with that.
Now what greenhouses have done, greenhouses have eliminated almost all the variables minus some bugs, but really minus, you know, environmental concerns. And then they've let in sunlight, right? So free energy, basically. Greenhouses are great, and they're economical, but only at scale. So a five acre greenhouse is probably equivalent to a 40 acre farm. You can bring that a little bit closer to the population centre, but not that much. Because in order to get the economies that you're looking for from an investment perspective, most of the greenhouse companies here in the United States, maybe a little different in Europe, but I don't think so, are building in 60 to 120 acre increments. That's just huge, right? And it's to get the better economies of scale. But again, you won't find 60 to 120 acres remotely near a population centre. So while they solve for some of the environmental and waste costs, they don't solve for that distribution piece.
And then finally on the other end, you've got vertical farms. And vertical farms saw that because an acre and a half of a vertical farm is equivalent to about five to six acres of the greenhouse, which is equivalent to 40 acres of farming. So you can put that really near a distribution centre, really near a population. The problem with vertical farms as they stand is they're unprofitable. It's too expensive to build. And then for what you're growing, unless you're growing tomatoes or berries, which are very high volume, high margin, you cannot make a profit on those. So they don't solve for the economics and just the overall economic sustainability of it all. So what we've done is we've combined vertical farming within a greenhouse. Your audience may say, well, why doesn't everyone do that? Well, because it's really hard to do. So difficult in fact, that we actually have a patent on it. It's issued a patent in the United States and in Europe to do what we do. No one else can do exactly what we do.
Anthony Day 05:22
Right? And that leads you to be able to produce food. Not just tomatoes and berries. And to do it with less energy and less water. Tell me a bit more about that.
Eddy Badrina 05:32
Yeah. So we can grow around 200 varietals of leafy greens, herbs, some fruiting crops, and then obviously, tomatoes, some berries, right? Economically, we're focused on around 75 varietals, mostly around the leafy greens and herbs and peppers. And the reason we're focused on that is because we can get great margins off of that. And it's something that no one else can touch, because of just the economics of growing those things, grow costs versus the market price is just, there's not enough margin in there, but we can. And so that's what that's what we're focused on. We let other folks focus on tomatoes and berries, just give it to them, right? We want to focus on this huge swath of goods that really no one else can grow out of, unless you're in a greenhouse or conventional farming.
Anthony Day 06:32
Right. So how are you able to do this? Is it the way you control the climate, the way you control the, the feeds to the hydroponic system? Or what is it?
NFT - Nutrient Film Technique
Eddy Badrina 06:42
Now we're getting into the technical details, which some of your audience may find really interesting as well. So. So there's a type of hydroponics, which is what we do, called the NFT. It's not non fungible tokens, which is sort of the word of the day, right, but NFT hydroponics is nutrient film technique, and we basically taken the NFT hydroponics and then flipped it 90 degrees so that it's vertical instead of horizontal. So most of the NFT hydroponics that people will see in a greenhouse, which is very common in a greenhouse, they're on these rails, and they have gutters that are probably two degrees of incline so it flows from one side to the other. We’ve basically taken that and then flipped it so that it's going vertically from top all the way to bottom.
That the secret sauce, if you will, resides in how – we called them towers – how our 18 foot towers are designed to let maximum water flow, maximum nutrients, flow through and then address the roots of the plants. And then combined with distinctive discrete air flow, temperature, humidity, co2 levels, to each plant spot. In essence, we are creating a microclimate around each individual plant spot, as opposed to controlling the environment of the entire greenhouse. When you have a microclimate, a number of things happen. One is you get extreme efficiency when it comes to energy usage, because you're only conditioning roughly 1/5 of the entire volume of that greenhouse because you're just focused on the 12 inches radius around each plant spot. And then the second thing that you do is with maximum efficiency, you have maximum control. So just the way that we do it from the top to the bottom, each of those nutrients, each of these plants get what we refer internally as an all you can eat buffet. And it's just nutrient rich water at the exact right temperature 24/7 combined with the air and then finally with the light coming from sunlight. And it just has this effect on plants where they grow really quickly, high nutrients, optimal structure, if you will. And what that results in for the consumer is you've got literally from harvest to shelf in 72 hours. And when it goes from harvest to shelf in 72 hours and because it's grown so nutrient rich and dense, it'll last in your refrigerator for weeks on end.
Anthony Day 09:55
Right so what you're actually doing is you're controlling the microclimate at the plant level?
And so that means I suppose, given that you have got plants at different stages of growth, then you've got a different microclimate, depending on whether it's a seedling, whether it's just beginning to grow, or whether it's just coming to the point of harvest.
Eddy Badrina 10:18
Yes, and so you're exactly right. And then what you'll see in an acre and a half greenhouse of ours is you'll see sort of this perpetual harvest, right? So say there are 100 rows in our greenhouse. Well, you can really only plant three rows a day, because it's something like 4,000 plant spots in a day. By the time you get to row 90, 30 days later, 28 days later, or in some cases 21 days later, it's time to harvest. You’re planting on row 90 or 80. But it's already time to harvest row one. And so there's just this perpetual harvest going within our greenhouse. And it's really more of a factory than it is, you know, an open field farm, right? It's just, it's day after day we're planting. We're seeding. We're harvesting, we're cleaning, and then we're planting all over again. So then, from an economics perspective, we can afford to employ up to 30 full time people in a greenhouse, which is not insignificant for a workforce that, you know, when you're talking about reconnecting the consumer in the community with their food and where it's grown and who's growing it, that's pretty significant.
Anthony Day 11:40
Right. Well, you're based there in Texas, aren't you?
Eddy Badrina 11:43
Anthony Day 11:45
Now, the external climate must have some sort of effect, because the sun beating down on your greenhouses is going to heat it up. So therefore, the effect will be different depending on where you actually locate these plants. Have you got installations in other parts of the world?
Eddy Badrina 12:02
So we're just getting started. The founders are from South Africa. And so they actually built a smaller version of this in South Africa very, very early on. It's not running anymore. That was probably 10 years ago, five to 10 years ago. But really our first facility is here in Texas. Our second one is being built and should be done in a number of weeks from the time of this recording. And then the plan is to have a mesh network of these greenhouses all around the United States and eventually around the world.
But you mentioned the temperature differential. Texas, one of the reasons that we chose Texas is because at least here in Dallas Fort Worth, we get all four seasons. So today, right now, it's going to be 100 degrees here. We've also had weeks on end of freezing temperatures, and then everything in between, not to mention rain, hail, sleet, you name it. Tornadoes, right? So we've really been able to grow and prove out that this can grow and these microclimates are effective in almost any temperate zone that you have. There will be some adjustments made obviously to the greenhouse itself, but the internal, the thing that is patented for designing usage, these towers, and the control systems that run these towers, they're good in almost any zone.
Anthony Day 13:40
Right. So are you planning to build more greenhouses or more of these units across the world? Or are you providing a service so others can actually invest and build them to your design.
Eddy Badrina 13:52
So we are going to build them and own them ourself. And we will partner with retailers, grocers, distributors, and wholesalers to provide the greens to them. So, you know, in this industry at least, it all really comes down to the buyers and these retailers, distributor buyers. And so where they lead we will follow, and if they say we need this built here, you know in Dallas then we'll be here. If they say we want it built in Los Angeles, we'll build there. They say we want to build it, you know, right outside of London, we'll build there. We will go to where the population is and where they need the food.
Anthony Day 14:40
As you said you could build it right next to a distribution centre. Just minimising food miles.
Eddy Badrina 14:46
Absolutely. Yeah. So you know, that's one of the things most consumers think well, why don't you just build it next to a grocery store? But for folks in the industry, they know that to go to a grocery store, it always has to go through a distribution centre. So even if you built a greenhouse next to a grocery store, you'd have to go back to the distribution centre, and then back to the grocery store. So our plan, our strategy is just to, it's a little counterintuitive to the normal consumer, but to the industry specialists, they will know. Oh, man, if you build it next to a distribution centre, you are eliminating almost all the food miles.
Anthony Day 15:30
Right. Well, I'd have thought that a single unit produced far more than just one store could deal with.
Two Million Pounds (weight)
Eddy Badrina 15:38
Oh, yeah, a single unit will produce roughly 2 million pounds of leafy greens in a year, over 13 to 17 harvests. So that is a lot of greens, a lot of produce.
Anthony Day 15:53
Yep. Now, this all seems very sophisticated. I mean, there must be an immense capital cost. And yet you say you make money on it?
Eddy Badrina 16:03
Yes. So like any good investment, there's percentages, and then there's absolute dollars, right? So I would look at this, you know, if you're an interested consumer or an investor, look at it like real estate, right? So, a building may cost five, or 10, or $15 million to build, but the revenues that are going to come out of that should be commensurate in terms of percentage. It's the same way with our greenhouses. Our greenhouses are capital intensive, which is why we're building them ourselves and going through institutional capital to get them built. But the revenues associated with them, for the business folks in your audience, they'll appreciate that we run around 50 to 60% gross margins, and anywhere from 20 to 30, upwards to 35% of EBITDA earnings depending on what we're growing.
Anthony Day 17:04
This makes you more than competitive, I suppose, with the traditional farmer growing in open fields.
Eddy Badrina 17:10
Oh, yeah. Oh, yeah. Here in the United States, at least traditional farmers pride themselves on about 5% margins.
Anthony Day 17:17
Yeah, yeah. Well, it sounds very interesting. It sounds like the future. I’ll be interested to see how far you can take this because, of course, many countries in Africa, for example, do not have enough food. But I wonder whether they would have the capability of raising the investment, or indeed have the market to be able to support things like this. But if we go back to where we started, if we can achieve this, or you can achieve this, with less land, less water, and less energy, water and energy being the key things, then something is going to be considered, isn't it?
Demographics and Economics
Eddy Badrina 17:57
Yeah, you know, the demographic and economic trends are undeniable. You mentioned at the very beginning of the show that the, population is rising, right? The trends are rising. They're not going down anywhere. So the overall population is rising. And with population, demand for healthier, more nutritious foods is rising. That's an overall trend across the world. And in the meantime, you have a declining trend in arable land, usable topsoil, and then lastly, water. Here in the United States, water is the new oil. It is very much from a 50 year, you know, 25, 50, 75 year timeframe, it is just as competitive in the markets as oil will be. And so when you look at those two diverging trends, the delta in the middle can only be filled by folks like us.
Anthony Day 19:01
Right. So presumably you are recycling the water that you use.
Eddy Badrina 19:05
Yes. So water, you know, plants transpire, right? They drink water. But the water that is released in the air, we reclaim because it's very, very humid inside one of these greenhouses. So we reclaim as much water in the air as we can through condensate and then push that back into the system. And then people ask, there are a couple of other ways to really save on water. Just the way that we run our systems and the way that we reuse the water, we only waste the equivalent – for an acre and a half facility producing 2 million pounds of greens – we only waste the equivalent of two households worth of water in an entire year.
Anthony Day 19:58
Well, Eddy thank you very much for sharing all this with us. When you set up your first plot in Europe do be sure to let us know.
Eddy Badrina 20:07
Oh, I will. Come visit. And if you or your audience is ever in the United States and they're ever in Dallas Fort Worth, have them look me up and I'll give them a tour myself.
Anthony Day 20:22
Great. Well, we'll hold you to that. I've no plans to be over there. But I'm sure there are people listening who may well take you up on it. So Eddy, thank you very much for sharing with the Sustainable Futures Report.
Eddy Badrina 20:33
Hey, thank you so much for having me.
There’s an invitation from Eddy Badrina of Eden Green, so if you’re in Texas why don’t you get in touch?
This week I return briefly to two weekly episodes so the normal magazine edition will come out on Friday. As I explained, the Sustainable Futures Report will take a break for August and then come back in September with one episode per week. Episodes will in future be on Wednesdays and they will alternate with an interview one week and a magazine round-up the next week.
There is no shortage of issues to report on, and no shortage of people banging on my door and asking to be interviewed. It's great that I have the option to make a choice and I turn away almost as many as I actually interview. This week I've been interviewed twice.
Just published is the latest edition of Hello Mercedes with Mercedes Fernandez, when I talk about How Your Daily Choices Contribute to Climate Change.
It’s published as a podcast and it’s also on YouTube. There are links above.
I also appeared on GBNews TV talking with the president of the NUM about the West Cumbria coal mine which is expected to be given approval later this week. GBNews don’t seem to have kept it on their YouTube channel, but a friend of mine made a recording which I’ll share when I get it.
The consequences and implications of the climate crisis I've never been more important. My objective is to make the public aware, but at the same time to make people aware that the alternative to business as usual is not some sort of dystopian future. There are so many people working in so many different ways to do things differently and do them better that we need to tell people about them and urged them to urge governments intern to use imagination and innovation to preserve our standard living, to improve it for some nations and to do it while preserving life on Earth.
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That was the Sustainable Futures Report.
I’m Anthony Day.
Until next time.