Hi and welcome to the Impact on FinTech TV.
I'm your host, Jeff Guderman.
Today I'm joined by Dennis Levine, a good friend and a fabulous eco-capitalist.
Dennis, welcome to the show today.
Thank you, Jeff.
Pleasure to be here.
So we talk a lot about this stuff, but today we're really gonna dive deep into it.
I always like to start out the show by understanding. why someone takes all of their talent and uses it to affect the SDGs as the pivot you're wearing, which we talk about a lot on the show, and really to do good rather than just to capitalize on the capitalist system.
Can you give us a little background about why you're in this general area of trying to save the world as we try to do here?
Sure, well, Doing good as opposed to the capitalist system to me is an oxymoron, doing good using the capitalist system is what the goal is because I believe if we're going to reach sustainability goals, food, water, energy on our planet, we have to demonstrate how to build businesses that are both sustainable and profitable by looking through the lens of sustainability and profitability.
That way we avoid the greenwashing that we've seen over the last few decades and we come up with tangible solutions to act as a catalyst for change to attract capital.
Now think about where we are.
We are here on Wall Street.
We're in the temple of capitalism where New York's not her.
This is it.
It doesn't, this is it.
So the goal is to be able to channel the trillions of dollars that flow through this into things that save water, food, energy on our planet, because climate change issues are real.
And they're affecting everybody on our planet.
So to your earlier point, this is the next big thing.
And From my days on Wall Street, I learned that the most successful investments we made and the most successful entrepreneurs we backed were those that satisfied the need to reach for sure, and the need here is palpable.
Yeah, let, let's dive into the need.
The need that you're trying to solve for is one that literally millions of people around the globe are dealing with hunger issues.
Billions of people around the globe are going to be dealing with potential water issues.
We're already seeing 2 billion people potentially not have access to clean drinking water over the next decades.
Talk to me about that need and how your company is trying to satisfy that.
So you know, we live in this amazing country, the United States, and we're only 5% of the world's populations, and we're already seeing the problems manifest here in the United States.
Those problems, food, water, are magnified elsewhere in the world, and today a billion plus people go to sleep every night hungry.
If we don't change the way we produce food and use water, that will go to 2 or 3 billion, and we'll see incredible climate migration simply because if you can't eat where you live, then you will move to where you can grow food, and that's an inevitability without change.
So when I looked at all the metrics, I looked at Temperatures rising.
I looked at resource scarcity.
I looked at population growth.
Oh my God, this is the perfect storm.
There is increasing demand on our planet, decreasing supply.
So where in that disparity can we find a way to produce food using fewer resources?
So we set off on a mission.
And we looked at water first because I believe water is the canary in the coal mine of climate change, for sure, and the metric is astounding, and people should know this of all Earth's water, oceans, rivers, streams, aquifers, only 0.7% is available to human consumption.
Every year.
Globally, 70% of that goes into agriculture.
In the United States, 80% of the water goes into agriculture.
Most of that water going into open field farms goes into our aquifers, doesn't necessarily go into the crops, they'll only absorb what they need, so it's wasted, but it's wasted with nitrates and phosphates.
Pesticides and herban stuff we don't want to drink, stuff we don't want to drink, yeah, stuff we don't want to eat.
So the challenge was how can we produce more food.
Organically using less water, getting food closer to where people live, because now The Colorado River feeds California agriculture, so we ship water from Colorado to California, put it on a truck, and ship it all the way to the East Coast.
Now that is an unsustainable model.
So we need to grow food closer to where people live, and we broke the code by building a large scale indoor hydroponic.
Facilities that can produce packet salads with no human touches using AI systems, full automation using 98% less water.
70% of that water comes from a rainwater recapture system.
We have no agricultural runoff, so nothing goes into the aquifers, and we get product to market sooner with no shrink.
So a longer shelf life, a USDA organic product, a superior price, lower than what they're paying from California.
So the consumer, the most important link in the value chain, gets a better product locally grown that they consume.
So I just want to handle all the objections up front with you.
Go for it, so that you really make a good impression on my show.
So we've heard about vertical farming for probably a decade.5 or 2 decades currently and have not seen a lot of traction in the marketplace.
What has been the problem up until now of the older version of vertical farming, and how have you guys fixed that problem?
Well, there's a place for vertical farming, uh, and there's a reason that vertical farming hasn't worked in the inner city here in the United States yet.
Hopefully, someday as the technology evolves, it will.
The simple thing is, The vertical farm is closed.
They don't use free sunlight.
You know, the ability to use free sunlight and help grow plants is easy, so they're running specific spectrum LED lights.
Sometimes 24 hours a day, so their energy costs are high, their input costs are high, their ability to expand is limited because they're in the inner city.
Their real estate cost is high, and ultimately since they're the last mile, their distribution costs are high, so Unless I'm missing something, when your operating costs exceed your revenue, you have an unsustainable business model, and that's been the problem.
So some of the really cool, important technology elements of vertical farms we use.
We use specific spectrum lights where we don't have free sunlight, but instead of a small facility going this way, we expand it horizontally.
So we have 10 acres under the blast, 540,000 square feet.
We use free sunlight every day.
We have fully automated systems, no human touches from seed to table, nobody touches this product.
Incredible.
And what we've done, you say that a lot though.
I want to stress what is the advantage of that?
Food safety.
All right.
And when you look at where 90% of our greens come from, it's either California or Yuma, Arizona in the winter.
So it's grown.
It goes from a grower, it goes to a packer, it goes to a distributor, it goes to a wholesaler, then it's shipped all the way across the country.
All of those touch points we consolidate under one roof.
We do it all seamlessly, and we grow 365 days a year.
We harvest 360.
We have no seasons.
We control the environment indoors.
It's truly remarkable.
So the advantage is all of those profit centers I just talked about along the way, we now have under one roof, which gives us the ability to sell to the retailer at a lower price, so we have more margin since they are margin starved.
He in turn can pass on those savings to the consumer, especially when we're in a food inflationary cycle that we see today.
Talk to me about alliances.
Are you working with any other companies?
Do you have projects, joint development work?
What's going on with the company?
Uh, yeah, the, our engineering firm is a company called Seed, and they have built 1000 greenhouses in 40 countries over their career.
So from a risk mitigation point of view, I think they know what they're doing.
In addition, we were very fortunate that Siemens chose us, and we just announced this at Green Tech in, uh, in, uh, Amsterdam back in June.
To provide us with AI automation technology which will enhance further our KPIs and our performance metrics because the ability to grow food using AI using controlled environment.
Using all the systems that we have just enhances the productivity, most importantly for you, the consume it.
And talk to me about water usage at the plant that you're at.
So our facility, we use 98% less water than the equivalent open field farm, 98% less water.
70% of that water comes up a rainwater recapture system.
They have a pitched roof, which is 10 acres in size, goes into a gutter, into a reservoir, that's treated, and all of the water then is a closed loop system.
The plants will only absorb what they want.
And the rest we will utilize using all natural nutrients that are water soluble, that are pure, no pesticides, no herbicides, so the consumer gets a more robust, more nutritious product because it gets there sooner with none of the poisons that they've been eating.
Amazing.
And we hire veterans to work in our facilities.
So the administration loves what we're doing.
We're growing food in America.
For Americans at a lower price, we're able to provide it to food banks, to school systems, and we use US veterans.
So it really resonates with Democrats, Republicans, liberals, and conservatives.
Why everybody needs to eat and we're giving the world.
Superior product at a lower price.
What are the types of things that you're growing right now and what does the future hold for what you could grow right now we're focusing on leafy greens, so that would be all types of lettuce, kale, spinach, because that's one family of product that would sustain itself and optimize production in the facility.
As our brand expands the Water Garden Farms across the country with a regional expanse, virtually 6 facilities, we will consider adding tomatoes.
Cucumbers, other crops, vine crops to a leafy green row crop system.
Incredible.
So I imagine if no human touch, there's robotic arms and stuff that's pulling the lettuce and packaging it.
It's actually hard to imagine.
It's incredible.
We have 4 packing lines producing 5 packaged salads a second, and unlike a lot of other providers that are moved for 5 to 4.5 to 4 ounces, which is shrinkflation, and charge more, we're maintaining a 5 ounce package.
At a lower price, it's US Day organic with no human touches.
That is a unique value proposition that does not exist in the market today.
And what does the demand chain look like?
Who's buying this from you?
Where is it being delivered to?
So this is retail will be.
Whole Foods, Albertsons, Safeway, Kroger, all of the major supermarket chains.
And we choose to use major chains because as we grow regionally, we will simply expand across the country.
And we're getting tremendous traction in other markets like Texas, Michigan, uh, Florida, uh, and, uh, upstate New York already.
And I imagine you solve for weather issues because the plant doesn't get impacted.
I mean, maybe if a tornado comes by, you'll have a problem, but aside from that, your weather issues are.
We built, we built a code and we look at all the weather history in a given region.
So you know, meteorological conditions, how we build, how we design the facity facility to optimize production, it's all based on what we grow and where we grow it.
What's the light every day, what are the temperatures?
Is there snow?
So a facility in the north would have more heat and more light.
So we're south, we have, where's the exact opposite.
So there's a lot of customization, and that's a real difference between what we do and what other people do.
First mover advantage isn't always an advantage in business.
And my goal was never to be first.
My goal was to be best, and that's what we've achieved.
All right, so take me, we're running out of time here, but take me into the future.
Where do you see this company 5 years from now?
5 years from now, the way we're planning it, we'll have 6 facilities strategically placed throughout the United States.
We'll have established significant brand equity and potentially here we are in the New York Stock Exchange, ring, ring the bell.
Ring the bell.
Take it public.
I want to get on that photo opportunity.
And you know, my background as an M&A banker, I understand how to create value.
We understand how to run a business and we.
Consider this a business.
It is something the world needs today.
It's something we need to do.
If you looked at US demand only, how many facilities would you have to build to meet all the US demand?
I'm just curious of the scale of what could potentially be there.
OK.
Our model says we can capture 95% of the US market demographically with 6 facilities.
And just as an example, right now what we're looking at is potentially building 1 or 2 million square feet in Texas alone.
Incredible.
Yeah, incredible.
As we know, Texas has huge problems around water, weather issues as well, but water definitely, they're on track to run out of water in anywhere from 13 to 20 years, most likely 13, and there goes the whole agricultural old.
Sites for Texas so you could potentially save Texas and allow them to continue as an agricultural leader with these facilities.
Well, they're prescient.
They know this.
We've, we've met with the Department of Agriculture there.
They recognize the Ogallala Aquifer has issues.
94% of the water that comes out of that every year goes into agriculture.
That's an unsustainable model.
They also know that building 2 million square feet of greenhouse like we build them in Texas saves 98% of that water.
Incredible.
And they have renewable energy, which is a cornerstone.
All of our facilities use renewable energy, either solar or wind, so that's very important to us.
Doing green.
Did you coin the term ecocapitalism?
I don't think so, but I like it.
We'll give you credit for it.
I appreciate it.
Dennis, ecocapitalist, great to have you on the show today.
Thank you.
Thank you.
Appreciate it.
That's it for the impact on FinTech TV.
I'm your host, Jeff Gilderman.
Until next time.
