AeroFarms

Unveil a strategic plan for AeroFarms to revolutionize crop cultivation through vertical farming. Explore solutions for issues such as consumer interest and energy challenges while focusing on growth and development strategies. Discover the potential of aeroponic farming and the benefits of urban-based, high-tech agricultural practices amidst global megatrends.

• AeroFarms
• Vertical farming
• Sustainable agriculture
• Green technology
• Crop cultivation

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Uploaded on Feb 22, 2025 | 0 Views

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1. We strive for your success. AeroFarms Towards a green future Presenting to: David Rosenberg (CEO of AeroFarms LLC) Delivered by: Louisa Vogt, Albert Gorlick, Marvin Klose, Jona Vogel Paderborn University Montreal, 6th January 2020

2. Driving question. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Profitable and sustainable business model Key Issues Mold consumer s interest Energy challenges 2

3. Solution preview. Strategic recommendation 1 2 Continuous growth and development 3 Implementation actions 1 Add franchising to business model 2 E-commerce & flagship store Joint development of LED with Energy Focus 32 vertical farms by 2022 3 3

4. Road to success. Status Quo Implementation Strategy Outlook 4

5. Status Quo 5

6. Status Quo Strategy Implementation Outlook AeroFarms at a glance. Channel Product Customer Retailers (ShopRit, Whole Foods, Seabra Foodsm Fresh Direct) Restaurants Corporate dining Schools Singapore airlines Leafy greens (kale, arugula, mizura, lettures) Herbs B2B Retailers Restaurants Corporate Dining Schools Airlines In future Fruits Vegetables B2C End consumer No direct end consumer touch points 6

7. Status Quo Strategy Implementation Outlook Business model with great potential. Aeroponic Plants in trays 30 feet high Not require soil or sunlight LED lights and sprinklers Farming 4.0 Buildings in urban areas 9 farms 7 east coast USA, 1 China, 1 Saudi Arabia More efficient Weeknesses Strengths Product variety Funding Large upfront costs High energy consumption Talent acquisition Local products Urban location Least affected by climate change Permanent optimization of data analytics by adjusting algorithsm Potential to expand your fully connected farms 7

8. Status Quo Strategy Implementation Outlook Megatrends. Increasing population Urbanizatio n Food security Loss of fresh water and arable land Worker welfare Food safety Megatrends benefit your business 8

9. Status Quo Strategy Implementation Outlook End consumer needs. Value Fast delivery Local products Cheap products Relationship with Newark school district Organic Environ mentally friendly Fresh products No USDA certified organic seal Availability Meet customer needs to better educate your consumer 9

10. Status Quo Strategy Implementation Outlook Projected vertical farming market globally. 2023 2020 2014 2013 0 1 2 3 4 5 6 7 in $ bn. Vertical farming market High potential to benefit from the significant gowth in the next years 10

11. Status Quo Strategy Implementation Outlook Financial status quo funding round E completed. in $ mn. Funding rounds Financial KPIs 2019 120 100 Revenue: $ 50 mn. 80 60 Total funding: $ 238 mn. 40 20 0 Farms: 9 1 2 3 4 5 6 7 8 Funding rounds Received $ 100 million in 2019 for rapid expansion 11

12. Strategy 12

13. 13

14. Status Quo Strategy Implementation Outlook Status quo recap. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Strategy Status Quo Implementation Potential for expansion No direct consumer touchpoints Challenges weaken business model 14

15. Status Quo Strategy Implementation Outlook Key success factors. Long-term growth Strategic decisions must be based on predefined criteria. Short-term effects Revenue/Cost Feasibility Each alternative must be evaluated equally. Strategic fit 15

16. Status Quo Strategy Implementation Outlook UrbanGreens 2022 16

17. Status Quo Strategy Implementation Outlook UrbanGreens 2022 The path to success. Growth strategy Business model In-house Franchising Sell turnkey-farms Sales channels E-commerce (delivery) Wholesale (indirect) Restaurant (direct) R&D Become energy producer Increase LED- efficiency Acquisition Cooperation In-house AeroFarms Growing a vision, not just a business model 17

18. Status Quo Strategy Implementation Outlook UrbanGreens 2022 The path to success. Growth strategy Business model In-house Franchising Sell turnkey-farms Sales channels E-commerce (delivery) Wholesale (indirect) Restaurant (direct) R&D Become energy producer Increase LED- efficiency Acquisition Cooperation In-house AeroFarms Growing a vision, not just a business model 18

19. Status Quo Strategy Implementation Outlook Pivoting the business model. Criteria In-house (producer) Franchising Sell turnkey-farms Long-term growth Decision specific Short-term effects Revenue/Cost Feasibility Company related Strategic fit 19

20. Status Quo Strategy Implementation Outlook Pivoting the business model. Criteria In-house (producer) Franchising Sell turnkey-farms Long-term growth Decision specific Short-term effects Revenue/Cost Feasibility Company related Strategic fit Franchising model will boost AeroFarms growth at lower expenses 20

21. Status Quo Strategy Implementation Outlook UrbanGreens 2022 The path to success. Growth strategy Business model In-house Franchising Sell turnkey-farms Sales channels E-commerce (delivery) Wholesale (indirect) Restaurant (direct) R&D Become energy producer Increase LED- efficiency Acquisition Cooperation In-house AeroFarms Growing a vision, not just a business model 21

22. Status Quo Strategy Implementation Outlook Creating new sales channels. Wholesale & other AeroFarms Customer 22

23. Status Quo Strategy Implementation Outlook Creating new sales channels. Wholesale & other Benefits Higher profit margin E-commerce (delivery) AeroFarms Direct customer contact Customer Valuable data insights Restaurant (flagship-store) 23

24. Status Quo Strategy Implementation Outlook UrbanGreens 2022 The path to success. Growth strategy Business model In-house Franchising Sell turnkey-farms Sales channels E-commerce (delivery) Wholesale (indirect) Restaurant (direct) R&D Become energy producer Increase LED- efficiency Acquisition Cooperation In-house AeroFarms Growing a vision, not just a business model 24

25. Status Quo Strategy Implementation Outlook Tackling the energy challenge. Become energy producer Increase LED efficiency Issues High carbon footprint High energy consumption High cost of end product Consumer concern 25

26. Status Quo Strategy Implementation Outlook UrbanGreens 2022 The path to success. Growth strategy Business model In-house Franchising Sell turnkey-farms Sales channels E-commerce (delivery) Wholesale (indirect) Restaurant (direct) R&D Become energy producer Increase LED- efficiency Acquisition Cooperation In-house AeroFarms Growing a vision, not just a business model 26

27. Status Quo Strategy Implementation Outlook Leveraging the personal network. Criteria In-house development Cooperation Acquisition Long-term growth Decision specific Short-term effects Revenue/Cost Feasibility Company related Strategic fit 27

28. Status Quo Strategy Implementation Outlook Leveraging the personal network. Criteria In-house development Cooperation Acquisition Long-term growth Decision specific Short-term effects Revenue/Cost Feasibility Company related Strategic fit A cooperation with Energy Focus will boost development of new technologies 28

29. Status Quo Strategy Implementation Outlook UrbanGreens 2022 The path to success. Growth strategy Business model In-house Franchising Sell turnkey-farms Sales channels E-commerce (delivery) Wholesale (indirect) Restaurant (direct) Become energy producer Increase LED- efficiency R&D Acquisition Cooperation In-house AeroFarms Growing a vision, not just a business model 29

30. Status Quo Strategy Implementation Outlook Status quo recap. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Strategy Status Quo Implementation Potential for expansion Pivoted business model No direct consumer touchpoints New profitable sales channels Challenges weaken business model Increased tech development 30

31. Implementation 31

32. Status Quo Strategy Implementation Outlook Status quo recap. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Strategy Status Quo Implementation Potential for expansion Pivoted business model Offer franchise model No direct consumer touchpoints New profitable sales channels E-commerce & offline experience Challenges weaken business model Increased tech development Development of eLED 32

33. Status Quo Strategy Implementation Outlook Status quo recap. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Strategy Status Quo Implementation Potential for expansion Pivoted business model Offer franchise model No direct consumer touchpoints New profitable sales channels E-commerce & offline experience Challenges weaken business model Increased tech development Development of eLED 33

34. Status Quo Strategy Implementation Outlook Setup franchise model to grow globally & sustainably. Optimized algorithms of 250 different plant types 280 different standard operating procedures on managing a farm Marketing campaign focusing on western Europe to boost franchise model Franchisee AeroFarms Consulting in real estate & operations Gathering of additional data Initial investment $ 12 50 mn. Franchise fee: 8 12 % of revenue Hire local employees Obtain local subsidies Benefits 23 new farms by 2022 (total 32) Increase in cash-flow of 10% Amortization time for franchisees 5 years Equipment & operations Cash-flow Franchise model will be key for profitable & sustainable business 34

35. Status Quo Strategy Implementation Outlook Status quo recap. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Strategy Status Quo Implementation Potential for expansion Pivoted business model Offer franchise model No direct consumer touchpoints New profitable sales channels E-commerce & offline experience Challenges weaken business model Increased tech development Development of eLED 35

36. Status Quo Strategy Implementation Outlook New sales channels will boost profitability. Two additional sales channels Flagship restaurant in New York Glass factory Cooperation with Uber Eats to enter e-commerce Vertical farm (35 + stories) Aero Greens by Uber Eats Glass Benefits Take out Increase profit by 10% Attract 15 % new customer Teach existing customer base Restaurant Franchise model will be key for profitable & sustainable business 36

37. Status Quo Strategy Implementation Outlook Status quo recap. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Strategy Status Quo Implementation Potential for expansion Pivoted business model Offer franchise model No direct consumer touchpoints New profitable sales channels E-commerce & offline experience Challenges weaken business model Increased tech development Development of eLED 37

38. Status Quo Strategy Implementation Outlook Setup cooperation with Energy Focus to increase energy efficiency. Increase energy efficiency by 120% compared to 2012 Raise attractiveness of franchise model eL E D Extreme low energy diode Benefits Reduced amortization time from 7 years to 5 years Reduce energy requirement from 3.5 gWh to 1.05 gWh ($ 6 mn. $ 1.8 mn.) Using 20% less energy than today Reduced energy will further build a sustainable business 38

39. Status Quo Strategy Implementation Outlook Contingencies. 1 Nobody interested to become franchisee impact Reduce fee for the start to 4 - 6 % of revenue Increase marketing efforts Customer still not interested to buy products Setup additional cooperation s e.g. airlines 2 1 3 2 3 R&D for eLED not as efficient as expected Additional cooperation with university probability Several risks have been identified but mitigation actions are available 39

40. Status Quo Strategy Implementation Outlook Roadmap. 2020 2021 2022 Cost Franchise model Develop franchise model 0.7 Marketing campaign 16 Sales channels Setup cooperation with Uber Eats 1.2 Setup flagship restaurant 5 R&D Setup cooperation with Energy Focus 0.8 Development of eLED 21 Total cost: 44.7 40

41. Status Quo Strategy Implementation Outlook Additional opportunity once everything is implemented. Aero Fish Switch from Aeroponic to Aquaponic farming type Enhance farming type to also grow and sell fish Benefits Operational cost for growing fish reduced by 50% compared to traditional process Offer high-calorie based proteins to customer Crops Purified water High nitrogen Fish tank Aero Fish will be missing piece in your product offer 41

42. Outlook 42

43. Status Quo Strategy Implementation Outlook Financial outlook rapid expansion. in $ mn. 250 120 100 Financial KPIs by 2025 200 80 150 Farms: 102 60 100 40 Revenue: $ 203 mn. 50 20 Amortization: 5 years 0 0 2019 2020 2021 2022 2023 2024 2025 Revenue Number of farms The franchisee model will dramatically increase the number of AeroFarms and the revenue 43

44. Status Quo Strategy Implementation Outlook Financial outlook rapid expansion. in $ mn. 250 Financial KPIs by 2025 200 150 Farms: 102 100 Revenue: $ 203 mn. 50 Amortization: 5 years 0 2019 2020 2021 2022 2023 2024 2025 Revenue Revenue through franchisees The revenue from the new revenue stream will overcome the revenue from own farms 44

45. Driving question solved. How should AeroFarms proceed to turn vertical farming into the future of crop cultivation? Profitable and sustainable business model Key Issues Mold consumer s interest Energy challenges 45

46. Monday morning actions. Plan workshop with business development team Set up meeting with IT department Contact CEO of Energy Focus 46

47. We strive for your success. UrbanGreens2022