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DOE Revisions to Manufacturing Regulations

DOE Proposes Revisions to Enforcement Regulations for Consumer Products and Commercial and Industrial Equipment

Written by JC Walker of Keller and Heckman, LLP

Date: Sep 10, 2020

In a notice published on August 31, 2020, the U.S. Department of Energy (“DOE” or the “Department”) proposed revisions to its existing enforcement regulations for certain consumer products and commercial and industrial equipment.[1] The proposed revisions are intended to further align the regulations with the Energy Policy and Conservation Act of 1975 (“EPCA”) and provide additional clarity and transparency about DOE’s enforcement process. Manufacturers of covered products should review this proposal very carefully. While certain proposed changes may provide some reduction in administrative overhead, the practical outcome may be to increase a company’s liability exposure during enforcement investigations as we discuss below.

A. Electric Motor Enforcement Procedures

Currently, the enforcement provisions for electric motors are promulgated separately at Part 431, Subpart U. According to DOE, the enforcement process for other covered products at Part 429 is much more developed. Thus, the Department believes that harmonizing electric motor enforcement with the procedures for all other covered products should afford electric motor manufacturers greater clarity. This is by no means an administrative change as the proposal could pose significant liability implications for electric motor manufacturers.

First, enforcement testing for motors could only be conducted by a laboratory that is accredited to the International Organization for Standardization (“ISO”)/International Electrotechnical Commission (“IEC”) standard 17025:2005(E), General requirements for the competence of testing and calibration laboratories. In contrast, Part 431 currently requires testing by National Institute of Standards and Technology/National Voluntary Laboratory Accreditation Program (“NIST/NVLAP”) accredited laboratories.[2] The proposed change should not be significant as NVLAP incorporates the ISO/IEC 17025 standard.[3] As both NVLAP and ISO/IEC 17025 have moved to the most recent version of the standard ISO/IEC 17025:2017, however, it is not clear whether DOE’s prescription of ISO/IEC 17025:2005 narrows the available pool of test laboratories.

More importantly, the proposal would reduce a company’s ability to challenge DOE’s enforcement testing by eliminating 10 C.F.R. § 431.383(f), which allows electric motor manufacturers to request additional DOE testing after DOE makes a noncompliance determination. Under the proposal, it appears that DOE would conduct additional sampling only at its discretion and if a unit in the initial sample is proven to have been defective.

Moving electric motor enforcement to Part 429 will also increase the number of possible causes of action available to DOE, including: failure to test a product in accordance with the applicable test requirements; use of controls or features to circumvent the test procedure and produce test results unrepresentative of the product’s actual energy performance; and knowing misrepresentation by certifying an energy use or efficiency that is not supported by test data.[4]

B. Enforcement of Design Standards

DOE also is proposing to clarify that “design requirements” are energy conservation standards subject to DOE investigation and enforcement, as specified by the EPCA.[5] According to DOE, the evaluation of only a single test unit would be sufficient to demonstrate that basic models in the preceding categories are non-compliant:

DOE’s proposal explicitly states that a test unit of a basic model subject to a design requirement may be selected for enforcement testing or examination. In such an instance, DOE will make a determination of noncompliance for the basic model based on an examination of whether a single unit of the basic model fails to comply with the applicable design requirements, as the standard applies to a design-not the measured performance of individual units-such that one unit can demonstrate noncompliance.[6]

Based on our cursory review, the following covered products are subject to design requirements:

Water boilers                                                  Torchieres

Conventional cooking tops                        Commercial unit heaters

Conventional ovens                                   Walk-in coolers and walk-in freezers

Ceiling fans                                                    Residential boilers

Ceiling fan light kits

Manufacturers of these products would not only be subject to enforcement for noncompliance with the numerical energy performance, but also if a single unit fails to meet an applicable design standard. Examples of such failures could include failing to use a triple pane glass door with either heat-reflective treated glass or gas fill in a walk-in freezer as required by 10 C.F.R. § 431.306(b)(1).

C. Use of Third-Party or Competitor Data for Enforcement

Under its current enforcement regulations, DOE may request any relevant information from manufacturers to assist in determining whether their covered products comply with applicable energy conservation standards.[7] The Department is proposing to allow use of compliance information from other parties, including but not limited to, third-party certification programs or other manufacturers with independent test data, for enforcement purposes. According to the Department:

This proposal ensures that DOE can enforce its regulations in instances where relevant information is retained by parties other than the manufacturer. Parties other than the manufacturer often conduct independent testing to determine compliance with applicable standards. In such instances, DOE’s ability to retrieve that test information could save government testing resources, and ensure that DOE can enforce in a timely manner, which will further DOE’s goals of maintaining a level playing field for all parties and encouraging compliance.[8]

Contrary to DOE’s stated intent, the current proposal may act to chill competitor complaints to the Department. In our experience, manufacturers will often submit test data to DOE to initiate an investigation of a potentially noncompliant competing product. This information is often provided on a confidential basis to avoid commercial disputes with a competitor, because the testing was done in-house rather than by an accredited laboratory, or for a variety of other reasons. The expectation is that DOE will pursue its own testing to support any subsequent enforcement action.

It is difficult to understand, however, how DOE could bring an enforcement action based on confidential information without triggering due process concerns. Thus, any final regulations must address DOE’s procedures for “retrieving” data from third parties; how the Department intends to proceed if complainants request confidentiality; and the likelihood that it will investigate complaints in the absence of such data.

The DOE’s proposal to retrieve test data from third-party certification programs may also raise concerns. Data submitted in support of certification is compliance data and should be available to the DOE. That said, manufacturers should review the terms of their certification program agreements to understand how these organizations will handle their certification data, whether notice will be provided before release to DOE or another agency, and the protections, if any, afforded to non-certification data.

D. Other Changes

The notice proposes several other clarifications and administrative revisions, including:

Adding a process to petition for reexamination of a pending noncompliance determination.[9] As proposed, the process would require that DOE provide the manufacturer with a letter of intent at least 30 days prior to issuing a notice of noncompliance determination. The manufacturer would then have 30 days from the issuance of the letter to file a petition for reexamination that meets certain information requirements (e.g., sets out the material issue(s) with the Department’s assessment or testing, provides complete test reports demonstrating compliance with the applicable standard, etc.). Upon review, DOE may modify or leave its pending determination unchanged.

Providing more specificity and transparency when issuing test notices.[10] In addition to the basic model number, DOE proposes to include characteristics or specifications of subject model(s) (e.g., individual model numbers, serial numbers, manufacturer date ranges or locations) when issuing test notices. The revisions would also require manufacturers to inform the Department if the requested units are unavailable, along with details regarding the unavailability of the units and any similar available units. To that end, the Department proposes to add a provision reserving DOE’s ability to make a noncompliance determination based on a reduced sample size in limited circumstances (e.g., when the basic model is subject to design requirements or test units are unavailable).[11]

Allowing a finding of noncompliance based on a single assessment test where efficiency is at least 25% worse than the applicable standard.[12] According to DOE, the new process would avoid the expenditure of unnecessary resources by foregoing the typical enforcement testing process.

Eliminating the requirement to notify customers of a determination of noncompliance.[13] To reduce the burden on manufacturers, the Department proposes to eliminate the provision at 10 C.F.R. § 429.114(a)(2), which requires that immediate written notice of a determination of noncompliance be provided to all persons to whom the manufacturer has distributed units of the basic model since the last compliance determination.

Comments on the proposal will be accepted until October 30, 2020. For any questions on this notice of proposed rulemaking or energy efficiency requirements in general, please contact us.

[1] Enforcement for Consumer Products and Commercial and Industrial Equipment, 85 Fed. Reg. 53,691 (Aug. 31, 2020).

[2] Or a laboratory accreditation body with a mutual recognition arrangement with NIST/NVLAP; 10 C.F.R. § 431.18.

[3]See generally NIST Handbook 150:2020, NVLAP Procedures and General Requirements, available from https://www.nist.gov/nvlap/publications-and-forms/nvlap-handbooks-and-lab-bulletins.

[4] 85 Fed. Reg. 53,694.

[5] See 42 U.S.C. § 6291(6).

[6] 85 Fed. Reg. 53,694.

[7]10 C.F.R. § 429.106(b). This includes covered products or equipment that are imported into the United States, which are also subject to the applicable provisions of 40 C.F.R. Part 429, 430, and 431. 10 C.F.R. § 429.5.

[8] 85 Fed. Reg. 53,694.

[9]Id. at 53,696.

[10] Id. at 53,694.

[11] See Id. at 53,705 (proposed as 10 C.F.R. § 429.111(a)(8)).

[12] Id. at 53,696.

[13] Id.

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Forage Kitchen – Local Food Economy Evolving in a Global Epidemic

Written by Callie Waldman, Forage Kitchen

First Friday at Forage Kitchen in Oakland, Calif., Friday, Oct. 5, 2018. Photo by Alison Yin/Alison Yin Photography

INTRO

Forage Kitchen is a commissary and shared incubator kitchen in the heart of Uptown Oakland. Nestled amongst retail locations and maker warehouses, we exist to support the local food economy by supporting its producers. Our community members find this support through our physical shared kitchen space, business support & promotional help, and through our network of like-minded food business owners. We’re a lot of other things as well. Beyond just our commissary, we’re also a small batch copacking facility as well as an event space for both private bookings and community gatherings.  Attached to our kitchen we have a small cafe that houses rotating up-and-coming restaurants, offering low rent to minimize risk as they transition towards moving into their own permanent space. 

HISTORY

Though we officially opened our doors in 2016, leading up to that moment took years of thoughtful decisions and physical build-out.  In 2012, cousins and co-founders Iso Rabins and Matt Johansen began their journey in building Forage inspired by their own experience as food entrepreneurs. Their driving motivation was to create an experience and a kitchen for others that they wished they’d had themselves while navigating the industry. 

Iso, having worked in shared kitchens for years while hosting his Wild Kitchen underground dinners, had seen all the ways shared spaces fell short, and the destructive impact that had on the community. This experience was motivation enough to want to create something better. Iso’s focus had always been food and food makers; launching Forage Kitchen just felt like the right next step.  

If you ask the cousins, Iso will tell you that getting Matt onboard took some courting.  Matt’s expertise in business management, his previous partnership in opening SF’s still-thriving Hayes Valley Biergarten, and his effortless knack for connecting with just about anyone, balanced Iso’s vision and made him the perfect co-founder.  Iso knew he needed Matt onboard and over a handful of beers and long talks at family reunions, the motivation and the dream was mutual. 

Once established and open, Iso and Matt needed someone to flesh out programming and act as a direct line of support for the growing community, and so they introduced a third partner, Callie Waldman, to run daily operations. Callie also came from extensive food industry experience but also brought with her the relationship building component, having overseen employee engagement and company culture during the early stages of Imperfect Foods. Focused on honesty, communication and trust, this small but mighty trio oversees all aspects of the business.  

STRUCTURE

When operating at full capacity, Forage congruently runs four arms of business: membership, small batch co-packing, events, and a cafe. Each functions as an integral piece of the puzzle, harmoniously interwoven to support our community at a multitude of crossroads.

Membership

Our primary focus and the reason Forage exists, is to support our members. Each of our members own and operate their own small food business and have 24/7 access to our kitchen through reserving tables using our online booking system. Pricing is tiered and ranges from $21-28 per hour depending on frequency. Additionally, we offer an $18 per hour rate between 10pm-6am to accommodate those chefs who prefer off-peak schedules.  Once in the kitchen, members have equal access to our industrial equipment as well as the option to rent storage depending on their needs. Folks are surprised to hear that we typically fluctuate between 40-50 memberships at a time, however the variety of scheduling needs means that we hardly see conflicts in booking or overcrowding. Our members range from pastry chefs to soul food caterers, bagel producers to homemade pickle and boutique sauce companies. A vast majority are women-owned. The kitchen is equipped with a gamut of industrial equipment in order to accommodate many types of businesses. We have grills and deep fryers, 4 convection ovens, a total of 12 burners, a 30qt standup mixer, and an entire rack of smallware equipment available.  

Small Batch Copacking

Through our small batch copacking program, we lay out a pathway for businesses to grow with us. Once companies are a little further along, this program enables food producers to scale even bigger, while we take care of everything operationally from sourcing ingredients to label compliance to packaging.  For small scale food producers, outsourcing production allows for their time and energy to focus on sales and marketing so that they can get one step closer towards their dream of large scale distribution. We’ve worked with a wide variety of clients but our areas of expertise mainly focus on bone broth, cookies, sauces and spice blends.  

Events

One of the joys of running Forage is to foster our growing community. We find significance in this not just among our members, but within the greater community of Oakland. Our central location and spacious outdoor area makes Forage ideal for bringing people together. We’re a short walking distance from bars, cafes, and venues in every direction, and BART is just a 10 minute walk down the street, making us accessible to the rest of the Bay.  Outside of the current covid circumstances, our summer calendar is typically stacked with all kinds of events. We host weddings and rehearsal dinners, holiday parties and cooking classes, birthdays and anniversaries. In the warmer seasons we offer monthly outdoor movie nights and we partner with Sofar Sounds, hosting regular live music nights. Every First Friday of the month, we open our doors once again and participate in the city of Oakland’s monthly First Friday event where our members are encouraged to set up vendor tents and sell their food; an excellent opportunity for their own exposure and testing out the market. 

Cafe

Connected to the kitchen and facing the street, our cafe serves as a rotating space for new restaurants to launch their temporary home and gain traction as they test menu concepts, hire staff, and work out operational kinks before moving into their permanent retail location. Some of these restaurants include:  Smokin Woods BBQ, World Famous Hotboys, and Shawarmaji. Regardless of who’s serving food, patrons can enjoy patio seating and a cold, local beer on tap. 

HOW WE FOSTER INNOVATION AND ENTREPRENEURSHIP

Under most circumstances, the production and sales of food in California requires the use of a certified commissary kitchen. At the most basic level, this is what we provide. In addition to that, there’s a lengthy list of permits and licences that producers need to apply for, some which come from the county, others which come from the city or state. There’s a lot of red tape and often, even knowing where to begin with the administrative side of this industry can be daunting enough to cause roadblocks. This is again where we come in. As part of our onboarding service and at no extra charge, we offer additional support with new members by identifying and helping complete all the applications they need. 

Undeniably, our biggest avenue of support exists through our active community. It’s inspiring to see members helping one another as some have been in the industry for decades, while others are stepping foot into a commercial kitchen for their very first time. We’ve seen collaborations emerge, like Gourmet Puff (a Nigerian doughnut company) popping up with Shawarmaji (a Jordanian Shawarma restaurant). Internally, we use slack as a way to make sure all members can easily connect with one another and we have a couple channels specifically intended for companies to post things like kickstarter campaigns, new product launches, or simply to spread the word that they’re hiring. In the last few months we also set up a little shelf in our cafe where patrons can purchase shelf staple items, all made at Forage. We sell products like The Final Sauce, Goldi’s Spice Blends, and Claudine Hot Sauce.  In this sense, we find ways to interweave the various components of Forage such that our members’ businesses are amplified. 

CURRENTLY

Since the pandemic began affecting California in mid March, It’s no secret that small food businesses have suffered. As event cancellations soared and remote work within the bay area tech scene became status quo, most of the catering companies that worked out of Forage suddenly had nothing to cook for.  In an effort to get creative, we worked with members to develop a ghost kitchen model, offering our space as a pickup site for any catering companies willing or able to shift into strictly pickup & delivery. We’ve seen several companies successfully make the switch, however with the exorbitant percentage that corporate delivery platforms take from each ticket item, relying strictly on the apps is hardly feasible. In this vein, we’re huge proponents of encouraging customers to pick up food directly from the restaurant whenever possible.

FUTURE

Though business has been undeniably slow for the first several months, our kitchen remains open, 24/7 as it’s always been. And, as it’s become increasingly clear that we’re in this for the indeterminable long haul, we’re starting to see some shifts. We’ve started hearing from folks who’ve completely changed direction to make ends meet; A previously touring musician who decided to bottle and sell chili oil; A furloughed Pastry Chef who shifted her focus to participate in a national bake sale, benefiting the Black Lives Matter movement. When outdoor dining opened in Oakland, that enabled us to once again capitalize on our outdoor space after months of it laying dormant. We replaced our large picnic tables with wine barrel seating designed to fit 2-4 people instead of 8-10. Our cafe extended its hours, and we folded in a Happy Hour to encourage customers to stay and have a drink rather than just taking their food to go. 

In all honesty it’s hard to say exactly when we’ll be operating at full capacity again, or what that will even look like as it’s a constant moving target. That said, we’re optimistic. We’re seeing the beginnings of private event inquiries for 2021, and we’re also starting to talk about hosting small, distanced gatherings. Additionally, we’re working on launching our own cafe concept in the fall of 2020, focused on maximizing our outdoor space. While uncertainty is always the case, covid has been an abrupt and potent awakening to this truth and so we move forward with flexibility, creativity and patience; committed now more than ever, to offer a space and a community that supports our local food economy. 

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Digital Traceability: Reducing Risks and Finding Efficiencies

Written by Alex Lewis, Parity Factory Corp.

The ongoing crisis has shed light on the need for innovation in the food space, even in the most fundamental processes.

If someone were to ask you which industries were most important to our daily lives, what would you say? Along with things like communications, construction, and clothing, one of the first things that likely comes to mind is also one of the most basic: food. The agricultural and food processing industries provide for our most key needs and enables our continued growth. It is unlikely anyone would argue against the importance of the food and beverage industry to our society, however 2020 has brought us a loud and clear reminder of just how crucial it is, in the form of the COVID-19 pandemic. 

In just a few short months, food and beverage manufacturers saw demand increases that haven’t been seen in a lifetime. At the time of writing, sectors of the food industry have experienced spikes in volume ranging from 32% in milk, 30-47% across the snack sector, and a staggering 77% increase in demand for meat, and this trend holds true for nearly every vertical within the industry.

The stay-at-home orders announced by most governments have sent consumers rushing to the store, clearing shelves and placing new strain on food and beverage processors. As they struggle to keep up with their order volume, many manufacturers are looking for new ways to improve their efficiency and reduce their liabilities. As it turns out, one of the most effective methods may also be the simplest: digitizing their lot tracing.

What is digital lot tracing?

All food and beverage manufacturers track their lots. In fact, it is one of the basic requirements for running a food processing business, with the specific standards and protocols defined at the federal level by organizations such as the FDA. By requiring tracking of all material that is involved in making a product, down to the packaging used, it ensures that recalls can be performed swiftly and protects the health of the public. Manufacturers manage their tracing using a variety of methods, from pen and paper, to Microsoft Excel, to fully integrated traceability software, with many using a combination of methods. Digital lot tracing simply means that a company is capturing and managing their tracing data on a digital platform, often integrating scanning and barcoding into the process. This approach has a drastically lower error rate than more traditional methods and tends to be significantly more efficient.

Despite tracing being a common daily task that all processors contend with, there has been surprisingly little momentum towards automated lot tracing in food. By some metrics, only 1 in 5 operations have fully automated their lot data capture, with a bit more having partially implemented the process. The food industry has always been slow to adopt new processes, but as demand and competition skyrockets, many are finally feeling the need for an upgrade.

The risks of a recall

Executing recalls, specifically executing them quickly and efficiently, is one of the biggest challenges that food and beverage manufacturers face. Under current FDA guidelines, food and beverage processors need to be able to perform a recall within four hours. Many of the major retailers demand even more of their suppliers; if you want your product on the shelves in a Walmart or Costco, you must be able to perform the same process in as little as two hours. The unfortunate reality is that for processors tracing on paper, particularly those producing at scale, these targets are difficult to hit. Also, the human element involved in manual tracing can allow errors to find their way into data, and this has become especially true for those who are dramatically increasing their throughput to keep up with new demand caused by COVID-19. Without true, reliable data, a recall can quickly go from difficult to impossible.

The consequences of a botched recall can be dire: the average recall costs a manufacturer $10 million, not including possible fines from regulators, or losing the aforementioned Walmart or Costco contract. One of the biggest losses is one that may not be immediately obvious: consumer confidence. Over half of consumers will quit purchasing a product once it has been recalled, and studies have shown that a company’s stock price will typically drop as much as 22% following a major recall. Once that confidence is gone, it can take months or even years to get it back, if it can be regained at all.

All these problems can be mitigated, if not completely prevented, through digital lot tracing. With a capable solution in place, recall times can be measured in minutes, not hours, as a few quick searches replaces shuffling through endless forms to find the lot in question (if it was recorded correctly at all). This guarantees compliance with even the most demanding of rules and regulations and eliminates all fear when inspectors and auditors show up for routine recall tests. In addition, the ability to execute a speedy yet thorough recall when problems arise minimizes the risk to both consumers, and the manufacturer’s reputation. The bottom line: most food manufacturers are going to face a recall at some point. It is crucial to have the systems in place to react appropriately when that time comes.

How does it increase efficiency?

Due to the huge importance of lot tracing, manufacturers using manual systems often have some of their most competent and experienced employees devoted to the task. Even if these staff would be better suited to other areas, it’s just not worth taking the risk of assigning less experienced employees to the job. Digital lot tracing solves this by drastically simplifying the tracing process. Scanning a barcode and letting software do the rest is far quicker, easier, and less error-prone than meticulously creating and tracking hundreds of lot codes by hand. Meaning that you end up spending less time on tracing, and therefore less money, while winding up with data that is significantly more reliable. This both frees up an operation’s most capable employees to pursue new opportunities and allows anyone in the operation to take part in the tracing process. New employees can be trained and onboarded quickly, which is particularly useful for processors hiring huge amounts of new labor in the wake of COVID-19. 

All of this allows for greatly increased flexibility when it comes to staffing, and as COVID-19 turns the industry on its head the value of that flexibility has become crystal clear. While many of us have had the luxury to transition into working from home, that’s just not an option for many working in the food space. When employees are unable to attend work, for example if they are sick, someone else must step in. This can be a major threat to efficiency when the few people in your operation qualified to handle lot tracking are missing. In dealing with turnover and staff redistribution, there’s tangible benefit to having a system that allows employees to be effective, regardless of their experience level. 

For those looking to digitize their lot tracing, there is no shortage of solutions to accomplish that task. However, a sufficiently robust solution should go beyond just traceability. If you are tracking each lot as it moves through your facility, it creates great possibility to capture additional data such as yields, storage locations, and quality information. In this way, digital lot tracing can be viewed as a foundation on which to build even more extensive efficiency improvements. These additional features are some of the most important considerations for any manufacturer to make when choosing between available systems.

Preparing for an uncertain future

COVID-19 has proven that swift, unpredictable changes can happen in any industry, even one as foundational as food and beverage. With new issues such as shifting demographics, climate change, and the variable nature of trade on the horizon, it is likely that changes will become more frequent and even the smallest efficiencies will be essential to thrive.

Customer consciousness is also changing rapidly, and businesses that want to stay competitive have no choice but to change with it. As consumers and regulators demand ever more transparency and accountability from the food industry, reliable tracing data is becoming ever more crucial.

Manufacturers will undoubtedly rise to these new challenges in the future, just as they are rising to the challenges of today. And along the way, many will find a comprehensive digital lot tracing system to be one of their most valuable tools. 

Sources/Further Reading:

Acorn Surfaces & Treatments
for Concrete Restoration Products and Services

Breaux, Randy. “COVID-19 Shows the Need for Automation.” Foodprocessing.com, Food Processing Magazine, 2020, http://www.foodprocessing.com/articles/2020/power-lunch-covid-19-shows-the-need-for-automation/. 

Deloitte. Recall Execution Effectiveness: Collaborative Approaches to Improving Consumer Safety and Confidence. 2010.

Demetrekakes, Pam. “How the Coronavirus Is Affecting Food Processing.” Foodprocessing.com, Food Processing Magazine, 2020, http://www.foodprocessing.com/articles/2020/how-the-coronavirus-is-affecting-food-processing/.

Lelieveld, H. L. M. Hygiene in Food Processing. Woodhead, 2017.

Stier, Richard F. “How Food Processors Can Create a Plan for Traceability and Recalls.” Food Engineering RSS, Food Engineering, 11 May 2020, www.foodengineeringmag.com/articles/98026-how-food-processors-can-create-a-plan-for-traceability-and-recalls.

Torero, Maximo. “How to Stop a Looming Food Crisis.” Foreign Policy, 14 Apr. 2020, foreignpolicy.com/2020/04/14/how-to-stop-food-crisis-coronavirus-economy-trade/. 

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Innovation – Emerging Agribusiness Technologies

Originally Published in Oct-Dec 2019 Quarterly

Sheri McClure

Good business leaders are always trying to do the best for their stakeholders, their employees, and their customers; but they don’t always have the time to research new ways to make their businesses more efficient and sustainable. Luckily, talking to experts is what we do best. We want to share three emerging technologies that can help you streamline your agribusiness in remarkable and eco friendly new ways.

Basil and lettuce being grown hydroponically in a large greenhouse. Water usage is only 1% of regular farming!

Vertical Farming

Traditional farms require mass quantities of acreage and are subject to issues like unseasonable weather, fallow land, and pests. With increasingly unpredictable weather, a growing aversion to pesticides, and an ever increasing population to feed, agricultural areas are feeling additional pressure. Vertical farms have become one way farmers can address these issues.  

It may be helpful to think of vertical farming as the technologically-advanced urban cousin to traditional greenhouses. Of course, each company offers systems with different features, but the overall goal is to utilize vertical space in a safe, controlled environment that greatly lessens each farm’s carbon footprint. Vertical farms can also be housed in old warehouses or other unused buildings, which could help boost the economy of underutilized urban areas and bring fresh, local produce to these communities.

I spoke at length with Niko Kurumaa, the International Sales Manager for Netled (pronounced net led) about Vera, their closed vertical farming solution. Netled has its roots in tomato farming, but was developed as a daughter to their greenhouse business after 20 years in industry. Their primary crops are leafy greens, like basil and lettuce, and they are expanding into the cannabis industry. Netled were pioneers in LED grow lights back in 2007, and have continued to push the technology of indoor agriculture with Vera. 

In general, vertical farms cut the farm’s carbon footprint and transportation costs. They even allow farmers to utilize more layers of soil since most of the good soil has already been used. Vertical farms can also be housed in old buildings or even skyscrapers–urban spaces where traditional agriculture would not be possible on the same scale. 

So what exactly is Vera and what prompted Netled’s recent 11 million dollar contract with EU company Astwood Infrastructure? Niko began by explaining Vera’s automation benefits. “Vera uses 95% less water than traditional farming,” he said. This decrease is primarily attributed to the water circulation system. The plants are watered, but when they give up additional moisture through natural processes, the AC system captures it, condenses it, and reuses it. The Netled engineering team has proven that Vera circulates 98% of the water used, which makes this type of farming more sustainable and aids in doubling average crop production. Recycling water in these closed environments also keeps chemicals out of the soil, which is helpful because the chemicals can affect future crops and contaminate drinking water.

But I believe Netled’s success is about more than a great product. “We see ourselves as a technical partner, not just a technical supplier,” Niko explained. The company has their own testing facility in Finland, where they are based. (Although they are actively looking for partners in the US and an operator in Indiana.) Netled is constantly improving the product and will test their customer’s crop in their own facilities to make sure everything is working optimally. In addition, Vera comes with a 10 year maintenance agreement, and their software connects all of the Netled farms globally to their tech. In other words, whether you’re in Finland or California, their team can help ensure that your vertical farm is functional and efficient. 

Management Software & Services

Agribusiness consists of a lot of moving parts. It is important to have reliable methods for tracking things like production, shipping, sales, and compliance. There are companies like AgriCare, located in the Central Valley, that manage some or all of these aspects for businesses. But there is also a growing list of vertical software technology that you can manage with or without additional support to keep your business organized. 

One of these resources is Chasqui (pronounced cha-ski), a platform managed by Ciclo. I met Oscar Aguilera, Co-Founder and VP of growth at Ciclo, at the NCIA’s Cannabis Business Summit and Expo in July 2019. I was impressed by their services, and was even more excited to learn that their product can be customized for any type of agribusiness. 

Ciclo places a huge emphasis on meeting their customers’ needs. In the legal cannabis industry, there is an enormous need to remain compliant despite everchanging and dense guidelines. Their platform, Chasqui, helps to keep growers and distributors compliant. But the software can also be customized for more traditional crops and their agricultural needs. 

For customers who would like additional support, Ciclo is there to provide managed services for Chasqui customers. You can use the software straight out of the box, but Ciclo wants to ensure that your and your businesses needs are reflected in your software customization and support. They begin by speaking with new customers over the phone. Their representatives want to understand your business, including its challenges, workflow, and processes, so you can customize the software to work best for you. This preliminary call is followed by hands on and face-to-face site visits, so you can feel comfortable with the product and its uses. They even have representatives who are fluent in both English and Spanish, so everyone involved in your business can have their voice heard. 

Management software like Chasqui makes it easier to keep tabs on all aspects of your business from anywhere at any time. It is important to find the best product for your business needs, but finding one that marries customized software and face-to-face customer service sounds like a promising start.

Alternative Energy

Notice that this section is not called Solar Energy. Solar can be a great way to go, and there are great companies like Sunworks Solar Power in Roseville, Wildwood Pools and Solar in Fresno, and SPURR in Concord. But these days everyone knows at least something about solar energy. What you may not know is that you can take solar on or off the grid. The companies listed above can help customers learn to bank their own solar energy and use it when they need it most instead of selling it back to large energy corporations. And Dr. Micro Grid consultants can help you get off the grid entirely. But solar is not the only option.

We met the Executive Vice President and Senior Account Manager of Ice Energy at the Southern California Facilities Expo back in May, and we were fascinated by their innovative solution to the high cost of cooling commercial spaces. Instead of using a conventional HVAC unit, use ice. In many ways, their Ice Bear and Thermal Bear thermal storage AC units are the opposite of solar energy. When ambient temperatures and energy costs are lower, these units make ice. When temperatures and energy costs are higher, they use these huge chunks of ice to cool the coils that in turn cool your space. 

If you are currently envisioning a large block of ice in a big bucket a la Looney Toons, think again. These are slick, HVAC sized units that easily replace traditional units. Ice Energy claims their customers can save up to 40% on their overall energy costs, and up to 95% on their peak energy usage. They also have a pretty impressive list of big name customers in agriculture, retail, and industrial, including New Belgium Brewery, Staples, AT&T, Lithia Chevrolet, and Panda Express.

Each business is unique and requires different supporting services. We love speaking with experts about what they do, what they offer, and what they know. And we are always happy to pass along that information to our readers. Hopefully some of these new innovations piqued your professional interest and will help you learn new ways to run your business more efficiently and sustainably.