Entering the urban farm scene as an aquaponic farming business back in 2013 was highly adventurous. It was still highly experimental, but the co-founders of Urban Organics plunged into it with gusto. The possibilities were incredible, especially in St. Paul, Minnesota, with its short summers and long frigid winters.
After 3 successful years of business growth with USDA organic certification, the company expanded operations into a new 87,000 square foot building across town from their original renovated Hamm’s Brewery location. A few weeks ago, the new location entered production in its phase one system stocked with Atlantic Salmon and a new range of greens. Once it’s operating at full capacity in 2018, the new facility makes Urban Organics one of the largest aquaponic farming operations in the world, with an annual production of 475,000 pounds of produce and 275,000 pounds of fish.
Amazing. They’ve outgrown their original 40,000 some square feet of space in the Hamm’s building? And are profitable enough to grow this large? Interesting, given that Farmed Here in the huge Chicago market, along with many other ‘massive’ or ‘world’s largest’ aquaponic farm operations that have folded over a lack of profit or sales. I had questions, and mainstream media never has all the info the indoor growing realm wants. So, I reached out to UO co-founder Dave Haider for some answers.
Asking if this major expansion means that they have left the ‘experiment’ stage now brought a chuckle. I think every news article written until recently about Urban Organics quotes Dave as saying what they’re doing is an experiment. But yes, he confirms that they’re out of the urban farm experiment stage, though aquaponics continues to develop as a technology. Those first couple of years were a huge learning experience, and they learned early on that demand far exceeded their anticipation. The move into 3,000 square feet of office space, 20,000 square feet of fish space, and 40,000 square feet of cropping space with 5 tier racks is overdue.
It turns out that due to the astronomical cost of meeting building codes, they’ve been confined to operating in only 8,000 square feet since launching their urban farm. Buying another building was a wiser use of funds. Not that the first one is a total loss, it served them well as a start-up and will still be useful going forward, but growth called for a change of plans. So, in partnership with Pentair, the global water filtration and aquaculture firm that designed and installed the Urban Organics aquaponic system, the group purchased the Schmidt Brewery warehouse in 2015.
Initially, I thought they had Nelson and Pade equipment from their fish tank design, but it turns out that Dave installs the windows in the tanks himself. Pentair’s US headquarters are in St. Paul, so working with a local company to handle the tricky part of the aquaponic installation made perfect sense. In the end, that decision was a huge benefit, and both companies are very committed to the continuing success and future growth of their aquaponic farming interests in St. Paul. Pentair says it’s the largest system of this kind in the world, and scalable to humongous proportions.
Both UO facilities get their water from wells, even in the heart of a big city. The Schmidt building gives them access to deep aquifer water that’s pristine in its 35,000-year-old purity. So, how much does that save them in overhead compared to an aquaponic farm drawing metered municipal water? A mere $20 a day, since it’s a closed system. So, that’s not changing the profit margin much, but Dave puts his gross operating costs at about 30%.
Which took me back to wondering… why do so many big aquaponic farming ventures fail? With the new Schmidt building running at capacity, they will see an annual revenue of $5-7 million dollars. Even with staff increasing from the current 18 to 50 employees at full capacity and total operating costs accounted for, this is still a profitable business. Urban Organics isn’t in a greenhouse and taking advantage of natural sunlight. The 2 acres of new cropping space requires 30,000 grow lights!
What kind of lights? They began with HO T5 fluorescents, but the new facility will be running custom designed, full spectrum LED strip tube lights with 228-watt output and PAR 225. LEDs are definitely energy-wise, but that’s still a whopper of a utility bill.
Perhaps the cause of other aquaponic farms’ demise is a crop conundrum. One of the first things I asked Dave was if Urban Organics’ planted fast turnover lettuce at initial launch like everyone else. Nope. They approached profitability wisely from the start. Their first crop was already sold before sowing; a contract grown mix of kale, chard, and lettuce bundles for Lunds & Byerlys, a local upscale grocery chain.
The equipment used in aquaponic farming is also extremely important. Keeping fish and plants happy and thriving is a delicate balancing act, that if out of whack would certainly eat up profits fast. The Star Tribune reports that working with the water filtration experts at Pentair is key to their success. But equipment isn’t everything either – business success is a holistic thing.
Before getting off the phone with Dave Haider, I asked him for some words of wisdom for newcomers to an experimental industry. Here’s his takeaway advice for aquaponic farming start-ups in other cities and countries…
“It IS experimental still. It IS hard work. Do your due diligence on location and market demands, and how to proceed in your city (code and regulations). Look at all the angles to learn how to succeed in your market.”
One other thing you may want to note – Urban Organics is producing fish as seriously as they are greens, and they aren’t stuck in the Tilapia groove. They started growing striped bass in 2015, and the Schmidt building will soon add Arctic Char to the Atlantic Salmon already in place. Tilapia isn’t everyone’s favorite fish, and it’s readily available anywhere. Today’s catch salmon and char, however, are a different scenario altogether.
More Info:
- Urban Organics: website and Facebook page
- Some system design details
- Some Hamm’s building system pics
- Star Tribune on Schmidt facility opening
- Pentair-Urban Organics collaboration
- Pentair Aquaponics Systems: commercial and hobby
- The Drink: bottled dinosaur age water
Images courtesy of Pentair/Urban Organics via Just Means, and Star Tribune (respectively).