In co-founder and CEO Zain Shauk’s own words, vertical farming startup Dream Harvest has “flown under the radar” intentionally for years. Founded in 2015, the US company has spent the last half-decade continually refining its approach to growing greens in a controlled environment — first on a dining room table, then a garage, and now in a Houston, Texas facility that employs a couple dozen people and sells leafy greens and herbs to the local population.
The company currently supplies Whole Foods locations in four southern US states as well as the Houston location of Sweetgreen. Notably, Dream Harvest also entirely powers its farm with wind power and claims to be carbon negative.
The company just raised $50 million from Orion Energy Partners and plans to open a 100,000-square-foot facility in Houston to expand the company’s growing capabilities. More yield and less waste are at the heart of Dream Harvest’s mission, which Shauk believes are more important elements in the farm than novel technology systems.
Read on for more about the fundraise, Shauk (ZS) thoughts on the role of tech, and how he deals with some of the current skepticism around vertical farming.
AFN: What led you to go into vertical farming and start Dream Harvest?
ZS: My co-founder [Harmeet Singh] and I are both Californians who unexpectedly ended up in Houston. I was a journalist at the time and Harmeet was a chemical engineer and he had a lot of experience in hydroponics. And I learned about all the benefits: you can grow locally all year round and you can use no pesticides. You can use way less water than [on] an outdoor farm. You don’t harm arable lands.
There was a lot of opportunity for us to directly address major problems with climate change and resources. That really led us to jump in and try to be innovators in this space. Harmeet had a lot of hydroponic experience. I had kind of an awareness of business and also of this space in particular of being a customer. And so we started reaching out to the grocery stores and the reaction was really positive because [when] we started in 2015, no one was really doing this here and in Houston.
That really allowed us to fly under the radar for a long time. We were growing on a dining room table just refining, refining our processes, then we moved into a garage and then into a warehouse. Now we have 26 employees and we’re in 46 grocery stores in four states. And we’re proud to say we’re partners with with some big companies and are highly rated on Amazon Prime and all that stuff. But we got in because of the the possibility to make a difference.
AFN: How does Dream Harvest stand out in an increasingly crowded vertical farming industry?
ZS: We’re a company that’s really science-first. And we’ve been able to generate really efficient yield and just turn the dials on our process. We have a lot of trade secrets around how we grow and it results in yields that make business sense today.
AFN: Expand a little on what you mean by being a “science-first” company.
ZS: When it comes to the sciences, so many factors [are] in technology and the systems that we use — those are unique to us. Part of it is our processes and those are very important. There are so many variables in hydroponic farming [and] you could break down a variable to so many different levels. If I just talk about lighting, there is the intensity of the light. There’s a wave spectrum of the light, there’s the hours of the light, there’s a distance that you put the light from the plant, and then there’s a whole host of other variables that I don’t want to mention here. That’s like 15 or 20 variables just in lighting.
So we actually control for more than 100 variables and those can be adjusted throughout the plant’s life, and so it’s not surprising that our growing formula is going to be unique to us versus someone else’s, and we will have very different results than someone else.
We’ve really been focusing on yield from the beginning when we started this business. We started with the focus on how is this going to be great for the planet and make business sense — to make sure we do everything safely and healthily for our customers and for our team. Then we want to make sure we don’t have to be burning through money forever. And achieving yields that made business sense was our goal. So we always made sure we turn the dials, adjusted those variables, try to get the right yield and not look for some future technology improvement to do it.
AFN: Talk about the wind-power aspect of your farm and how you arrived at using that.
ZS: One of the knocks on indoor farming is that it uses a lot of energy. In the beginning we knew that we were only going to use green energy. We’ve never used anything but renewable energy. So we sourced wind energy from the Texas grid and we’ve been an EPA green partner ever since. It’s something that we’re going to continue in our large scale facility. We’re working with energy partners to do a lot more with renewable energy. One of the beautiful things about the Texas grid is that we can source all wind energy from it. But you know, in the future, no matter where we’re located, we’re committed to be fully renewable powered.
AFN: How do you respond to skeptics that suggest vertical farming might not make business sense?
ZS: Indoor vertical farming is productive. You have to have a model that [allows you] to get enough yield to cover your costs. When you go vertical, you multiply the amount of yield you’re getting the amount of land you’re using. You’re also multiplying the energy because you’re using a lot of light, which is why we use renewable energy.
So there’s, there are two points to your question. One is can you produce enough food? The answer is yes, we can. And we can produce it in leafy greens, we can produce in herbs, we have a lot of experimentation going on with flowering and fruiting. Well, we have a lot of progress with tomatoes and cucumbers, we’re doing them really well.
Does it make business sense? The answer is increasingly “Yes.” I would point to Tesla as a great example. As you continue to work on a technology, you continue to establish that capability, you first sell the [products] that are easiest to sell to maybe the premium customers and then you get to something that is more cost effective for everyone and makes business sense.
Our crops make business sense. We have the yield. And the yield is the thing that matters most.
The good news and what makes me really proud is that our science-first approach has allowed us to get there without expending so much capital on like novel technologies. We’ve focused on our yield. And we’ve made business sense today. And we’re going to make business sense with any product that we roll out and more excited about our greens today to go wide scale with that we’re excited about the herbs that we do well, and I think we’ll do even more in the future with the fruit.
AFN: What your plans for the new capital? I know there’s a new facility in the works.
That’s in Houston. It’ll be about 100,000 square feet. We have great grocery store customers and partners and restaurant partners. And we get a lot of interest from customers all the time about our produce. This is gonna allow us to provide a lot more really fresh, amazing quality local produce, grown with fewer resources, and we’re using only renewable energy.
AFN: Will you keep the local aspect of your business model long term?
We always want to be a local source because our focus is on the planet, so [we focus on] what can we do to reduce food waste. So that means resource waste. It means energy waste, and it definitely means food waste, and packaging waste.
We think with the problem of local produce being something that hasn’t been solved yet. There’s a lot of opportunity for us and for other businesses. So we will look to where we can have the most impact on the planet. And if that’s continuing to invest in Texas, we’ll do that. If that’s investing elsewhere, where there’s a real problem of not having a certain type of local produce, we will do that too.