The Next Big Sourcing Frontier

New urban farming platforms let operators source foods like lettuce from as nearby as next door.
New urban farming platforms let operators source foods like lettuce from as nearby as next door.
LOCAL ROOTS

Stepping into Tender Greens, a Los Angeles–based fast casual, is like stepping into the Thanksgiving meal of your dreams. The bustling open kitchen is lined with oversized serving bowls of creamy mashed potatoes, red and green butter lettuce with tarragon dressing, and rare albacore tuna grilled to perfection, among many other upscale dishes. By the time you reach the end of the service line, tray in hand, your mouth is watering.

Of all the seasonal vegetables and salads on the menu, the simply dressed butter lettuce presents one of the most intriguing ingredients on the menu—not just for its freshness or flavor, but because it was grown hydroponically in a shipping container that is located in a warehouse south of downtown Los Angeles.

Hydroponics is the process of growing plants without soil, usually with the roots submerged in nutrient-rich water. The combination of artificial light, temperature, and nutrients has been regulated to create a proprietary blend and flavor. Tender Greens’ hydroponically grown butter lettuce was delivered fresh and chemical-free to the restaurant—with the roots still on—that morning.

It might sound too good to be true, having local produce delivered to the restaurant’s doorstep that morning, but it’s not.Urban-farming platforms like hydroponics, aeroponics (similar to hydroponics but where the plants’ roots are not submerged and receive nutrients via mist), and aquaponics (aquaculture that leverages the nutrient-rich waste to grow both more fish and plants) are allowing operators to source hyper-local foods that are premium quality and carry an appealing story for
customers.

And increasingly, these systems are accessible to fast-casual operators around the U.S.

Lessons from marijuana

The first thing to know about hydroponics is how it was popularized, which is not without some controversy. When a plant is immersed in nutrient-filled water, it doesn’t have to search the soil and work for what it needs. That’s why you’ll find faster growth and higher yields with hydroponics—and that’s also exactly why hydroponics has become synonymous with the marijuana industry.

“We can learn from the marijuana industry, but marijuana has a very different profit margin,” says Christina Wong, director of PR and brand expression at Tender Greens. “How can you make lettuce profitable like marijuana?”

That is the question Local Roots, a Tender Greens supplier, is trying to solve. Local Roots is responsible for the design and operation of the shipping container, or TerraFarm, that houses Tender Greens’ butter lettuce, as well as more than 60 other types of leafy greens for other clients. The vendor’s proprietary technology is an iteration of equipment developed by the marijuana industry, as well as based on research from NASA in the 1970s.

“NASA was the one to pioneer how we grow food in places we don’t normally,” says Allison Towle, director of corporate development for Local Roots. “If we don’t have the sun and we can’t plant in the dirt, how are we going to feed people for the eventual living-in-space scenario?”

What NASA discovered is that certain lights emit light-wave spectrums that mimic the sun. Plants are able to complete photosynthesis if they have access to that light wave. Local Roots is made up of scientists, engineers, and farmers who, over two-and-a-half years, adapted the NASA technology but specifically focused on how to grow food indoors in an economically viable way.

The result was shipping containers built out with sensor systems for climate control, irrigation plumbing, pan-like racks, and custom-engineered LED lighting. The controlled environment eliminates exposure to harmful chemicals, bacteria, and pathogens. The plants grow twice as fast, and because they eliminate runoff, they use 97 percent less water than conventional farms. Each container produces the equivalent of 5 acres of outdoor farmland.

“Put a number of them side-by-side and you’re producing an incredible amount of food,” Towle says.

As developers of technology and sellers of produce, Local Roots has made some interesting discoveries along the way. It learned how light and temperature can affect flavor, such as how more blue light intensifies the spiciness of arugula. It’s not unlike how different grapes, climates, and soil conditions produce different wines.

“We are actually able to amplify flavors in our produce by manipulating the conditions in the farm,” Towle adds.

Thinking inside the box

For restaurant owners, indoor farming technology is exciting—chefs will be able to customize produce based on aesthetics and tastes. But who will be willing to pay for this premium product? Urban farmers know their produce must be priced competitively with traditionally grown alternatives. Today, Local Roots is only specializing in herbs and lettuces.

“We are focused on leafy greens because we can grow them economically,” Towle says. “We are not interested in growing a $10 head of lettuce.” In theory, anything could be grown in the TerraFarms. But berries will be the next realistic project Local Roots tackles.

Another target for urban-farming vendors is efficient aquaponics technology, which combines hydroponics with aquaculture. But that day may still be far away.

Chef Andrew Gruel, founder and CEO of seafood fast casual Slapfish, is interested in urban-farming technology like aquaponics. But he says the price point today just doesn’t make it feasible for his business.

“I just haven’t seen it done economically on a grand scale,” Gruel says. “As a fast casual who is held to a $12–13 average ticket price, it’s not currently possible. I would love to utilize the technology if I could find a reasonable source.” 

The future is hopeful, though. The reliability and consistency that come with indoor farming can help contribute to reductions in pricing. For example, an indoor farm always knows its harvest and can commit to pricing.

“Everything is computerized and measured and monitored—everything is controlled,” Wong says of hydroponic systems.

These indoor farms can even adjust the daytime lighting to occur overnight, when electricity costs are cheaper. By using solar power, reducing water needs, eliminating the need to refrigerate produce and ship it across the country, and improving LED lighting technology, these urban farming technologies shouldn’t be too far from becoming cost-efficient supply solutions.

Reinventing the supply chain

Tender Greens also partners with LA Urban Farms, a producer of aeroponic Tower Gardens that grace the outdoor seating areas of some of its restaurants, and Go Green Agriculture, one of the largest organic-hydroponic producers in the country. These partnerships have proved to be expensive, similar to if they were buying produce from a small farm or producer. But for Tender Greens, it’s an investment in the future.

“We’re looking forward 10–20 years and imagining what our agriculture will look like or how much it could shrink, and how we could grow quality produce that Tender Greens believes in and is closer to our cities,” Wong says.

Towle says 98 percent of leafy greens in the U.S. are grown in California and Arizona, which means that, especially for East Coast restaurants, produce can sit on a truck for up to 10 days. As much as 40 percent of the produce is wasted after numerous deliveries.

“By the time it makes it to the shelf, it’s lost its nutrients, its freshness, and its quality,” Towle adds. “Undoing that complicated supply chain means you make fresh, nutrient-dense food year-round as close to the source as possible.”

That’s one of the main reasons why Tender Greens partnered with urban farmers. The fast casual has 24 restaurants all over California, but expansion is in its future, and company leaders don’t want to rely on California-based produce. They want an indoor farm located right next to each of Tender Greens’ new locations.

“We don’t want to compromise if we are expanding to the East Coast, but how are we going to grow lettuce year-round?” Wong says. “The fun part is imagining how we can partner with urban agriculture partners that are working with hydroponics and have them scale with us.”

Right on trend

These new sourcing solutions aren’t just sustainable and high quality; they’re also trendy. The National Restaurant Association’s most recent “What’s Hot Culinary Forecast,” which polled 1,300 professional chefs, found that hyper-local sourcing was the top concept trend of 2017. Among the other top 10 trends were environmental sustainability and locally sourced produce, meat, and seafood.

Restaurants are great ambassadors for new food technologies, Towle says. The aeroponic Tower Gardens from LA Urban Farms that bloom at some Tender Greens locations are a perfect example. The vertical garden is made of modular stackable growing pots. It’s space- and energy-efficient and could easily be used for residential or commercial purposes.

“We’re not farmers; we’re restaurateurs and chefs,” Wong says. “But while those towers aren’t enough to feed our restaurant every day, we get to educate our guests that come in, and they get to imagine the world in a different way.”

Indoor farming not only drastically reduces the amount of water and space necessary to grow certain crops, but it also allows farming to be brought to urban areas. In turn, sustainable and local produce becomes more accessible, especially to communities who don’t have sufficient water, space, or weather to grow certain crops.

“Customers are always looking for something new and something different, but also want to feel good about their purchases,” Towle says. “Knowing you are buying something that is grown sustainably, pesticide- and herb-free; reducing carbon footprint; [and] eliminating runoff, it’s really a win-win.”