Indoor farming is best known for leafy greens and micro-herbs. But New York’s Oishii is hoping to blaze a new trail and sweeten up the segment.
“A lot of people call strawberries the holy grail of vertical farming,” Oishii founder Hiroki Koga tells AFN. “Strawberries are the hardest crop to grow in a vertical system and it’s been every vertical farmer’s dream to grow them. Conquering strawberries allows us to grow into other crops very quickly.”
The startup announced a $50 million funding round this month led by Mirai Creation Fund, part of Tokyo-based SPARX Group. Additional investors included Sony Innovation Fund — the corporate venture arm of Japanese tech giant Sony — Tokyo-based AI company PKSHA Technology, and San Francisco-based VC Social Starts.
“We’ve had multiple offers from different funds but we ultimately decided to go with SPARX because they have a very strategically aligned mandate. They’re backed by Toyota, one of the largest manufacturing companies in the world [and] vertical farming is the intersection of agriculture and manufacturing,” Koga says.
Although it may seem odd for Toyota to be interested in agrifoodtech, the carmaker is working on its Woven City project located at the base of Japan’s Mount Fuji. It’s a so-called “living laboratory” where researchers live and work full-time to imagine what future cities may look like through technological innovation.
Koga is no stranger to controlled environment ag (CEA). Six years ago, he was working as a CEA consultant in Japan, helping large corporations enter the space. While Koga views Japan as the birthplace of vertical farming, he moved to the US in 2015 – around the time that the method was becoming popular in the country.
Alongside the allure of being the first to crack indoor strawberry cultivation, Koga sees the fruit as a way to address what he calls the “unit economics problem” in indoor farming. He sees strawberries as providing a very strong revenue and profit model, as well as a crop that can further “democratize” vertical farming.
“In order to democratize it, I wanted to start with something that’s truly impactful — not products that people will buy because they are sustainable — [but] something that is superior compared to what is on the market, and that would completely change people’s experience,” Koga says.
He leveraged his personal network in Japan to collaborate with farmers and research institutions on the details of indoor strawberry cultivation – from seeding all the way to harvesting. It took “countless” iterations to get the formula right, he says.
“There’s probably 20 or 30 different things that you can tweak in a given cycle of the plant. So, let’s say there are five or six different stages of the plant life cycle – if you multiply all of those, there are millions of different combinations,” he explains.
“It’s a matter of tweaking those on a daily basis to figure out what the perfect mix is.”
However, this knowhow isn’t what Koga considers to be Oishii’s “secret sauce.” Rather, that’s the bees that the startup’s using handle pollination.
While Koga won’t spill the ‘bees’ about how all this works in Oishii’s context, he claims to have found a way to replicate a natural environment within an indoor vertical farm that convinces the critters they’re outside.
“They live in harmony with our farmers and robots,” is all Koga will add.
The Tesla of vertical farming
With the initial R&D under its belt, Oishii is now turning its focus to consistency and quality of product. Its current New Jersey facility spans a few tennis courts, Koga says; but its next one will be the size of an American football field. It currently sells direct-to-consumer through its website, and through traditional retail channels like supermarkets.
But its strawberries may be out of some consumers’ grocery budgets, retailing between $15 and $50 per pack depending on the size and the number of fruits. This price point puts Oishii’s berries in the luxury food category – for now, at least.
“Our current Omakase berry is our Roadster right now, but we already have developed multiple strawberry cultivars that we can produce much more cost-efficiently. Our Model S and Model 3 will be on the market soon,” he says, referring to the latter-day models now being sold by Elon Musk’s company.
Another US vertical farming startup, Plenty, is also trying to solve the strawberry equation. It recently added Driscoll’s to its list of backers and is collaborating with the major berry producer on indoor strawberry cultivation.
Koga welcomes competition in the space, particularly if it means branching beyond leafy greens.
“It’s generally a good thing that people are following in our footsteps and expanding out of the leafy green space. The more berries the better,” he says.
“Ten years ago, we only had Tesla, maybe a few other companies. But Tesla was the one who proved that it can be done, and now there are dozens and dozens of electric car manufacturers. [The electric car] become much more widely available.”