"Becoming an event organizer was never the plan"

With a background in finance and investment, Nicola Kerslake became interested in indoor farming nearly a decade ago. She realized there were hardly any ways to invest in indoor agriculture at all. “I was curious why that was the case and became interested in growing indoors. Back then, nobody was doing it commercially – there were some guys, but they were doing it off the grid. I figured that if I were thinking of it, other people had to be thinking about it as well”, she recalls. With the help of friends she decided to throw an event and see who would show up. The 50 people she expected turned out to be over 200. With too few chairs and the possibility of the overcrowded venue to be shut down, it became clear that indeed more people were thinking about indoor growing. Her investment firm Newbean Capital became organizer of the yearly Indoor Ag-Con event.

Six years from that day, the new industry has evolved rapidly. Last year, over 300 million USD was raised in private funding by indoor agriculture firms. Still, according to Nicola, the industry is not mature at all. “Automation and the adaption of it, plant genomics, controls and LED equipment and software development – there are so many different trends in the market. The leafy green companies are visible, but what’s happening elsewhere is fascinating too. Recently, an ice plant factory opened in the US. Who would’ve thought of that? And there’s the social aspect: companies do not only talk about how to get a 10% better yield, but also check the social impact they have. Developments are to continue over the next years.”

Over the last couple of years, though, two developments have changed the industry for indoor farming. “For starters, the industry has genuinely changed with the large companies coming in: big IT-companies, but also ventures like Plenty and Aerofarms, and large greenhouse companies or substrate guys. In the beginning, folks started a little farm and thought of selling to a farmers market or a Whole Foods. They were checking out which crops to grow. With the big players entering the market, the stakes are higher. These innovators have increased the credibility of growing indoors.”

An example of this is Sananbio, opening its doors for the Indoor Ag-Con participants on Friday. “100,000 square feet in China and another 215,000 in Las Vegas – and plenty of other activities going on. Having folks like that in the industry, is truly a game changer.”

And then of course there’s cannabis. “For the indoor industry, this is an unsung hero”, Nicola states. “Partly because of the number of experiments that are ongoing. There is a very systematic way of planning in this business. This focus isn't hardly at all on how to sell the most kilos, but more on “big picture” development issues like expressing certain cannanoids in the crop. As a consequence, for example, the LED-industry has been driven by the willingness to experiment and the attention for plant science and behavior. This huge aspect is just starting to get tapped. And there’s the collection of people gathering in this industry. They’re coming from large farms, and agricultural companies but also political, sports and music, legal and accounting backgrounds. There is a good mix of very professional people.” The downside of this might be the fact that the produce guys lose their best people. Is that a concrete fear? “It’s changing the way the produce industry has to think of hiring and retaining their best folks, that’s for sure.”

Even though the industry is still young, it’s growing rapidly and the attitude towards it as well. “Of course it will take time for the industry to grow further. It takes time to prove the products, to have the farms operating successfully and to be able to show this to people. From the solar industry I have learned that it went through similar developments”, Nicola trusts. “And there will be some big events, both good and bad, waking up the rest of the industry. Check out the current E.coli-outbreak in Yuma – not easy to contain at all. When experts are talking about it taking years to rectify the underlying issue, it changes the attitude to indoor agriculture. We see it already: people who were dismissive of hydroponics a couple of years ago are now really interested in what we’re doing. There is a changing attitude towards the industry.

Next week these topics, amongst others, are to be discussed broadly at Indoor Ag-Con – one of the most important events in the global industry - even though it was never Nicola’s plan to become an event host. “For me the goal of getting involved in this industry was providing capital. That was always the goal.” It still is an important topic for her. Last year, she started Contain Inc., an alternative finance business. “Finance has been an issue from the start because indoor farmers can't often access traditional forms of debt. When going to a bank, the first question is “how many acres of land do you farm?” and traditional leasing companies rarely understand the value of the industry. There’s a big gap for us to offer options such as leases. With our 3-5 year leases we’re focused on a wide range of growers: from 2nd generation farmers to non-profits to complete start-ups. Our value is knowing the industry, knowing which lenders and vendors to work with and being able to spend time with the grower as they get their plans together.” The focus for Nicola therefore is on the long term of the industry. “Our focus going forward is adding to Contain Inc’s product range and vendor list to better serve the industry. We expect that there will be bumps along the road, as every growing industry experiences, but we see a clear path to a long term role for Contain Inc in a much larger global indoor agriculture industry.”