Russ: [00:00:00] Thanks for downloading the 23rd in our series of episodes of the csuite podcast that we’re recording in partnership with the European PR Agency Tyto and their Own Without Borders podcast, where we are interviewing leaders of unicorn companies to find out about the key issues, pain points and challenges that start-ups face and how they can address them with a strategic approach to marketing and communications. My name is Russell Goldsmith. My co-host for this episode is Tyto’s Senior Partner, Holly Justice, and today we are thrilled to be joined online by Erez Galonska, Founder and CEO of Infarm, a company whose smart modular farming system allows distribution of farms throughout the urban environment, growing fresh produce in any available space and fulfilling any market demand. Welcome to the show Erez, can we start by you giving us a quick introduction to your company?
Erez: [00:00:59] Absolutely. Thank you for having me, Russell, Holly. Infarm is an urban farming company specializing in indoor vertical farming or control environment, agriculture. We are on a special mission to transform cities into self-sufficient in the food production, bringing premium products, more diverse products and helping the end consumer to have access to those premium products in affordable prices. And we see ourselves also a catalyst for change and demonstrate how you can create businesses for profit and for purpose. We’re doing this by maybe three different ways. We have a very strong customer base of retailers where we’re partnering with them and bringing our farms very close to where food is actually consumed. So, we cut the lengthy supply chain and we can talk about the impact of this later on. And I’m very happy to say that we are already working with 50 percent of the top leading retailers worldwide, and we are operational in 11 countries, have more than 1,000 people, purpose driven individuals working with us on this mission, and we are very proud of what we managed to achieve so far.
Holly: [00:02:15] One of the things I was reading particularly on that recent funding announcement at the end of last year. I came across one of the quotes that you said in the CNBC article is that the current food system is broken. I’d love for you just to elaborate on that point a little more and explain what you mean by that.
Erez: [00:02:32] Yeah. First of all, if you look on our supply chain and if you even zoom just a moment, one step up and you look from the helicopter view, so to speak, on our food supply chain food system, you will see that in the next decades, we will need to increase production by 70 percent or alternatively, some people say we will need two extra planets in order to feed the growing population. We know that 70 to 80 percent is going to live in cities very far from where food is produced, and we know today that also 30 to 50 percent of the food produced is wasted before it even arrives to our plates. Now, the food that survived the long journey lacks vitamins, freshness, taste and flavour, fragrance, and in most cases, it’s contaminated with chemicals. Therefore, we as an end consumer and I see myself as an end consumer in the end consumer of these fresh vegetables, we want to have healthier produce, we want to reduce the waste, and we want to produce in a more efficient way, both from a resource perspective, basically growing more and delivering higher quality to the end consumer and to do it in affordable prices. So, this is exactly what we are trying to solve, both on the big picture, trying to find ways to feed the growing population in the next decade in a more sustainable, efficient way. And really help retailers to source better ingredients for their customers.
Holly: [00:04:05] And on that retailer point, you’re already supplying retailers such as Amazon Fresh and Marks and Spencer. How did those deals come about, and can you reveal any future expansion or growth plans to us today?
Erez: [00:04:04] I have to admit that all the retailers that we are working with, I would say 99 percent came from inbound sales. And you can see how strong the brand that we build in the sector of, I would say, in the ecosystem of retail or the food segment, you see our impact inside of this world. And we started with the first farm in 2017. Today we have more than 1,000 farms in the field for those various retailers that we work with. And I guess this one farm, this one idea that we can actually cultivate food right in the fruit and vegetable department just where people actually work and bring them ultra-fresh and more diverse products, I think that notion was very impactful. And that was led to a lot of retailers just calling us and asking us “can you do the same for us?” “Can you grow the food right in front of our customers?” And today we have more than 1,800 locations worldwide, and this is if you are discounting, of course, the e-commerce where of course we serve more and more people. And these inbound sales also shows you that there is a real need for our solutions and for companies that are trying to solve those problems and trying to bring fresher produce grown in a sustainable way, more local, free of pesticides. And to do this with less transportation, less food miles and less water and so on and so forth. So, we are basically capitalizing on this need and trying to provide those retailers what we like to call farming as a service. So, it’s almost if you are a retailer, if you’re an owner of Edeka, which is the largest one in Germany and the one we started to work here from Berlin. So, if you are the owner, you will almost have a farm and we will provide you these farming services and we will ask you simple questions like “What do you like us to grow for you?” “When do you want us to harvest?” In the peak of the day or during the weekend? And we would ask you, “who are your customers” and “how we can fit what we go to their demand?”. So, everything is a very personalized way of looking on the farm and to deliver the best value by using technology.
Russ: [00:06:37] I’ve looked on online at some of the photos of what you call your cloud connected growing centers. It looks unbelievable. Can you just explain how that all works and the benefits of such a setup?
Erez: [00:06:51] So, in each and every farm, our modular farm, we have 75 sensors which allow us to track any parameters of the growing conditions inside of those farming units. We like to say almost like these units are very similar to climate machines. When you think about it, we bring the Mediterranean climate into every corner that we farm in, and normally it would be in the north hemisphere. And this unit is cloud connected. We can monitor it and both on the growing recipes, but we can also monitor the situation of the unit. We can listen to different parts of that unit so we can see if the pump needs a replacement. We can understand how to connect this to the demand of the market. So full control, both from operational perspective and from the growing conditions. And all these units are connected to a central platform where we can constantly improve and iterate and conduct almost research if you like or perfecting the growing recipes and the bottom line of this very unique way of farming, this modular approach, allows us to collect significant amount of data. I can tell you that we already crossed the four billion data points a month on plants. Some argue that we are already one of the biggest research companies for plants, and we are partnering, of course, with very big universities which just announced our partnership with Wageningen University in the Netherlands, which we are very excited about. And this knowledge about the plants and how they grow allows us to all the time create better efficiencies, increase the yield on the square meter of the growing on the farm itself. So, all the time, increase the yield, increase the quality, increase the nutritional value, and we can do this while using less and less resources. That’s why we like to say premium products in affordable prices, and this is the power of software and technology
Russ: [00:08:55] And that modular technology, can you just explain how quickly you can deploy that and also how large some of these farms can be?
Erez: [00:09:02] So, when you look on our modular farms, we have different kind of models for different kind of applications or demand, if you like. So, we like to reverse the demand into the farm. And this is also something I think unique that modularity allows us to do. And then, of course, we can grow with the demand if it’s a retail or supermarkets and we can all the time add more and more categories and more varieties because our ability to create different environments under one roof, it’s quite unique for the world of agriculture. Normally you will see very big greenhouses or even vertical farms plant factories where you have just one homogenous, very big climate. We can decentralize climate and create those units next to each other and grow the strawberry next to the salad, next to the herbs and perfect each and every growing recipe for what is actually inside of those farms. Now, of course, from the client perspective, it’s brilliant because we can grow with their demand and all the time add more and more categories as demand rises. But on the other side, for us, it means that we can use capital in a more efficient way. Behind each and every model, there is a client, it could be a chef, it could be a retail owner, it could be an e-commerce company. And this gives us a lot of possibility to personalize and create better value for our customers.
Russ: [00:10:26] Does that put an end to seasonal products? Like you mentioned about strawberries, for example, because here in the UK, you can buy strawberries all year round, but they’re only really good at certain times of the year.
Erez: [00:10:36] Correct, yes. So, I wouldn’t say it’s the end of seasons. We are not going to replace the outside climate or agriculture as a whole, but for sure, we can start and standardize the climate and bring the strawberry in the UK, in the same quality year-round with no fluctuation in cost, and we can fix it based on the demand of the market. So, it’s creating a more resilient farming network, which is also making it a bit more sustainable if you like. Just on the modularity, I think the interesting part beside the growing different or creating different climates and growing different kind of crops and creating a bigger, I would say diversified, creating bigger categories for our clients. It’s also the infinite scale that we can farm on. So, each and every unit we can deploy in between six to eight weeks. So, from the moment we are entering with our unit or to the store or to our growing centres, after six to eight weeks, we’re already starting to farm. And then it’s a year-round production, and very reliable. Our systems are consistent in terms of output and we’re all the time optimizing them in the growing recipe. So, we increase the output and quality while reducing the resource or the cost of production is all the time going down. And we can produce those units almost like you will manufacture a car, right? We have our own suppliers and we’re bringing them all together, and those units can be produced in hundreds and in the next couple of years in the thousands. Therefore, we can have all these partnerships and in parallel start to deploy those units, activating very fast and roll out internationally and nationally with all our retail partners. So, this execution game is very important because once you have the product market fit, everybody wants to know how fast you can bring it everywhere. And here we are.
Russ: [00:12:27] How do you think the agritech sector in general will evolve in the short term to medium term?
Erez: [00:12:33] First of all, vertical farming is still agriculture, and agriculture is a long-term game. So, 12 months, I wouldn’t look just under what’s going to happen in the next 12 months. I would look what’s going to happen in the next decade and what is going to happen is that the technology and software and precision agriculture techniques is going to enter in a very meaningful way, and they’re going to change the industry by personalizing the demand and bringing supply and demand maybe closer together, so we can really farm based on what people really need to eat and not, we’re not going to choose any more products that are going to be, that can survive the long and lengthy supply chain. So, you will choose in the UK, to grow a very specific strawberry, which maybe the people in the UK, who really wants to have access to. So, you will start to look on what people want to eat, from the nutritional perspective, but also from taste. And so, there’s going to be a lot of personalization, these are on the commercial side. If you look on the efficiency perspective, you will see that farms are going to become ultra-efficient. And you will see it because we will start to learn more about plants. We will start to learn more about what kind of seeds we want to bring into those climates. And we will start even to think what kind of climate we want to create for certain seeds in order to maximize their full potential. So, it’s going to be tasty, ultra-efficient and personalized, and that’s the trend. And we are very much living on that front and continue to push to make that happen.
Russ: [00:14:13] I mentioned at the top of the show that you reached unicorn status in December. Obviously, you founded the company back in 2013, so reaching that milestone. Has that changed the perception of the business in any way?
Erez: [00:14:25] Well I can tell you, it’s definitely changed perception of the external world. With every round that we are pushing and pulling together, it’s very important for us to show that we’re heavily capitalising the company in order to execute against the contract that we signed. So, it’s about confidence for the customers, but also, I think in this very specific moment, you can say that it’s also a signal for the entire agricultural controlled environment or vertical urban farming as an industry, because it’s a meaningful point for any company reaching that milestone. And it showed that we are in a very big transformational for our food system and there is more and more players that need premium products and affordable prices cultivating nearby the consumption points. And we are very proud of being the first one in Europe that are reaching that milestone. Again, we are not focused on valuation. We are really focusing on execution, how PR announcement communication helps us to bring more confidence to the entire industry, to the entire ecosystem. And so, we can continue and do what we know how to do the best. And this is to cultivate amazing plans and bring it to you so you will have a better experience around food. From the client perspective. I can tell you that with each and every round that we raise, we are just being more confident around our clients. Those are the biggest companies in the world, those retail clients. And for them, it’s very important that there is a company which is heavily capitalized and that can execute against the contracts and against expectations. And this is our focus all the time, customers, customers, customers and execution against what we sign and what we promise.
Holly: [00:16:17] One of the key things we like to focus the discussion on with guests in this series is around communications and culture within the business. So, from your perspective, kind of what has your approach been to building the Infarm brand, raising awareness of that challenge in the industry that you’re solving and importantly, differentiating the brand to other competitors out there?
Erez: [00:16:41] First of all, I think from a brand perspective, our strategy was in the beginning to put the farms in front of the end consumers. And it’s part of our radical transparency or radical transparent approach to farming, but also to the brand, and this is something that we are going to work in the next couple of years and we’re going to showcase more and more pieces of our supply chain from the way we produce the food, why we are doing what we do. And we’re going to reveal more about the impact and the sustainability aspect of our farms. So, you can count on us that we all are going to benchmark on that front. And this is for me, a big part of building a trustworthy brand. In the end, this is food – you want to know the people that are producing your food, you want to know who is behind this food, where it’s coming from, what is its content and what is its taste, who else is eating it and maybe how they’re using the ingredients and what kind of recipes they do with it. And I think it will inspire others to go into that path, and hopefully our food system will become more transparent, more reliable, more resilient, and more sustainable. And of course, more tasty. And this was our problem because 10 years ago, when I say to my friends and family and so on, that I want to grow my own food on the top of the mountain, they thought, I’m crazy, but it actually came from this feeling that you really want to control what you put inside of your body, and you want it to be healthy. I couldn’t have access to amazing, fresh, diverse, sustainable, healthy products, so I just grew it myself. Now it’s more about, OK, how can I share it with others? This, I would say the magic of growing, how can we share it, how we can standardize it so everyone will have access to that experience. And if we manage to do that and people will pick up a herb or a strawberry or a mushroom or buy it from Infarm and they feel a little bit healthier both from themselves, but also they will understand that they’re doing something which is better for the environment. Then I think we managed to build a brand.
Holly: [00:18:55] I think that trend of people wanting a little bit more control over what they’re putting in their bodies is something everyone is well aware of now. But I can imagine nine, 10 years ago when you were launching Infarm, that’s quite a visionary step to have taken with the company. In terms of building that vision and building the company culture over those nine years, how have you approached that?
Erez: [00:19:00] Definitely when you build a brand, you also need to look inside. And I can tell you that we’ve been very much focusing on bringing purpose driven experts into the business. So, it’s not just about, let’s scale the business and grow, grow, grow, it’s also we need to demonstrate the impact that we have on supply chain. And of course, on our people and culture. And I have to admit that in some cases we did mistakes, and it was more challenging, and people also left the business. And for us, it was a lot of learning curves. And what we decided to do is all the time to bring the philosophy of a product, to bring it into the organisation. and start to iterate on the organisation as if we are iterating on our farms. So, if you ask someone from Infarm, “what do you think about the company?” Everybody will say the product is amazing, so people are really bought into the product, which is number one in creating a culture. But from an organisational perspective, what we feel like, we are growing so fast, and we have the right people, so we don’t want to lose that talent because we are growing too fast, and things are becoming hectic and it’s normal for any start-up in the world. So, we started to iterate also on the organisation, and I can tell you that every half a year we are reorganizing the business to create more clarity and more ownership and making sure that people are content and have this clarity on what needs to be done in the next six months and 12 months. And in the beginning, it was stressful for a lot of people because reorganization, everybody thinks it’s restructured. They think, OK, we’re going to fire people and reduce, and it’s a cost driven exercise. In our case, it’s not. It’s really about ownership clarity and helping people to really build what they’ve been hired for. And we are very proud of all the Infarmers that are out there. I take the time to go around and speak with, even remotely with the different cities, with the different farmers, take questions and explain why we do what we do, both from a vision perspective or the mission, but also just the day to day why we are deciding not to move with the next generation already next month and to postpone it. And so even small decisions that can influence day to day of a lot of people. We are spending time and trying to build and to gel this culture to be also very much mission oriented and help us to build a better farming network.
Holly: [00:21:52] And that point that you said around the challenges of getting an organizational structure that works for the business as it is when you’re changing and growing so quickly. You’ve now got teams based across different regions, multiple countries. I guess those in-person touchpoints from you are really important for them when you go and visit them and meet them. But how do you navigate communicating with individuals versus communicating with the entire company and making sure you’ve got that clarity of vision and comms channels from an internal comms perspective?
Erez: [00:22:27] First of all, we have a team which is purely focusing on internal communication. We have screens in each and every hub or farm or growing centre where we are constantly communicating to the teams over there digitally. I’m very much focusing on creating webinars or town halls with the different regions. We have the normal global all hands with the entire company, and I’m forcing also our leadership to do the same to spend time with the team if it’s in a smaller groups and cascade different information that you can’t really all the time speak with the people because we have other things that we have to do. So, it’s about enhancing communication specifically in the time of Covid. And I can tell you that being hands on enhanced communication, it’s something that for me, it’s not coming naturally. This is my first podcast, so I’m not a person going out and I’m using my time to really build a business and executing but enhanced communication was my resolution for the first year, and I am used to writing every month a report for all the company in our general chat. And now my resolution was OK Erez, you have to move it to a video format. Welcome to the new world. So now at least, I’m trying to also make sure that people are seeing me because we cannot travel. And there’s so many locations and I still want people to see the face of the people behind the mission, behind the vision and explain and inspire people for the product and for what we want to achieve. And it’s important for me that people also understand how important it is for us. So, yeah, we are doing a lot on that front and probably we can do it much better, I have to admit. And this is something that again, we’re all the time getting feedback from the team and trying to improve both on the personal level, but also on the wider company perspective.
Russ: [00:24:28] Well, first of all, thank you, we’re very honoured that you’ve chosen us as your first podcast, so thank you so much for agreeing to do that.
Erez: [00:24:36] It took us some time to make this happen but thank you for hosting.
Russ: [00:24:41] No, absolutely. Well, it’s interesting you’re talking about that because, Holly’s just touched on the internal comms there, and I wanted to ask you about your role as an external spokesperson. So, how do you view that? Is that something you’re comfortable with?
Erez: [00:24:55] It took me some time to get used to it and to adapt and to learn how to be in front of an audience, how to present. So, it’s not something that comes to me. It’s maybe natural today or it seems like natural. But it wasn’t like this at all. And I got a lot of people that give me feedback, and I used to have mentors and just sharpen my own stage external abilities with time, and with experience, then you start to enjoy it, Like, I’m starting to enjoy this podcast.
Russ: [00:25:28] That’s good to hear. Thank you.
Holly: [00:25:31] You mentioned a few moments ago Erez that in that comms journey, you’ve learned quite a lot, that here’s always more to improve on. If you could pick one, what would you say the biggest communications challenge has been that the company has faced and how did you guys overcome it?
Erez: [00:25:49] Well, there was a few challenges, and I can tell you that actually it’s all the time a challenge to understand, to try to understand all the different perspectives in the organisation and how its impact from the people in the field with the farms that executing and to their leadership team. So, there is a lot of room for mistakes, so every communication is challenging. We had now an interesting transformational activity where we decided to give more ownership to the different countries, so we restructured the company, the organisation and setting up the company for the next stage, for the next phase, if you like. And for us, it was not just about OK giving more ownership to people, but also to explain why I’m moving to London, why Guy’s moving to the Netherlands, why we are collaborating with Wageningen University, what is going to be the benefit from it. Why we incubate the company in the Netherlands. What will be the ownership of each and every country, how this is going to flow into one coherent organisation and so on and so forth. And we spend a lot of time just understanding how to communicate, what to bring to the table and to make sure that people still trust in the path and trust our decision on Infarm and how to take it, and we just want to make sure that people are confident and they are in good hands and we are thinking about everything and making sure that the life at Infarm is just becoming better and better for them. We still didn’t figure out how to create a very good hybrid culture between people at home, people in the field and so on. And this is also feedback that we’re getting from the team. And here we need to do much more work. So, this is a challenge that we are still in the process. So, I don’t have yet a conclusion, but we can revisit it in one year if you want.
Holly: [00:27:45] I don’t think that’s a challenge unique to Infarm, it feels like that’s something facing a lot of companies at the moment. We’re kind of entering this new hybrid world.
Erez: [00:27:55] Yes, correct. So, people are patient, but still, we have to deliver. So, we need to do everything that we can in order to find the right balance and the sweet spot, so people feel good in working here. And it’s also helping the culture and the people to just feel comfortable at work. It’s just basic and we’re not there yet. So, this is something we’ve been working on.
Holly: [00:28:21] You mentioned mistakes earlier Erez, what has been the biggest mistake that you’ve made in your entrepreneurial journey? And how did you fix it? What did you learn from it?
Erez: [00:28:32] So we did many, many, many, many, many mistakes, I can tell you very small ones, which was also the impact was very big, but also very big ones. I can tell you that we tried to bring very senior people to the organisation in a very early stage. That was a mistake, not because of the people, the people that we brought were great, but it was a mistake not to give to the people at Infarm, the ones that really did the work until that day and even though they are lacking the experience, we didn’t give them a chance to prove themselves and we didn’t help them to develop themselves. And didn’t be honest with them that we were thinking about bringing those people. So that was in a very early stage, even at the seed round. So, we fixed it quickly. And then of course, the senior people didn’t also, they didn’t understand how a company like us can even exist in such a hectic and miscommunication and so on, so the hands-on part and really developing people from the organisation is key. And this is something that we until today we continue to do. And even if we see that there is a gap in experience and so on, we are very transparent and honest. But the first thing that we do is all the time give a chance for the people in the organisation in helping us to build a company. Smaller mistakes, which also had a bigger impact, we thought that in the beginning, we will build farming as a service, as a tech provider. We were going to sell equipment and sell our know-how software, hardware and support people and provide farming service almost like from a big tech angle of it. That was a mistake but actually here the mistake is that we thought that what we have in mind can actually work, and we really pushed very hard on this, and we succeeded. And actually, we’d been successful in selling our equipment and we got some traction there, even the first farming Metro, which is one of the biggest wholesalers here in Europe, they bought it from us and in one point we started to listen to our customers and to the feedback coming from the retailers and the feedback was clear. First of all, if you really want to transform the food system, don’t lean on the retailers. You can partner with the retailers, but don’t count on them that they will deploy hundreds of millions of fields to change the system. It’s not their business to disrupt in the market itself. And the other thing is that they say to us, look, you are the new start-up, you’re bringing this new technology to the market, this value and you should talk about it because we can talk about it. But the end consumer won’t believe us, as they will believe you, you are the face behind this brand. So why won’t you tell to the customers why you are you doing this? And we started to do this, and it was even more successful. So we adopted and iterated and fixed that and pivoted the business to become more operational and then farming the service became a bit more turnkey solution for urban farming.
Russ: [00:31:43] This has been absolutely brilliant. Thank you so much. We said we’d keep you for about 30, 35 minutes, I think we’ve sort of stuck to that. So, we’ve got one final question for you, and we’ve asked all our unicorn leaders this question. If you were to go back in time and speak to your old self, what guidance would you give yourself about communications? And also, what steps would you encourage yourself to take in order for you and your business to excel in comms?
Erez: [00:32:08] I think, first of all, everything around transparency. This is something that I will be a bit more vigorous if you can say that. And whatever we want to do on the brand and be radical, transparent. And this is something that I would bring to the business in the early days, it took us some time to understand the power of honesty. And I would say to myself, in the beginning, the people that are with you, you can tell them more about your concerns, your fears, and not just be a leader with a shield that need to just show that everything is going to the right direction. Engage with the people on that front. That will be my advice to myself.
Russ: [00:32:51] Tremendous. Listen, I know it took us a while to get this organized, but I’m so pleased we finally got around to getting to chat to you. Thank you once again for agreeing to be your first podcast. Really appreciate that. But for now, Erez Galonska, thank you so much for taking the time to join us online.
Erez: [00:33:09] Thank you for hosting me and I enjoyed it very much.
Russ: [00:33:13] Holly, first of all, I should have said right at the start, but welcome to your first csuite podcast, so thank you so much for co-hosting today. What was your thoughts on what Erez had to say?
Holly: [00:33:23] Thanks, Russ. What a fun way to spend 35 minutes or so. There were so many things I picked up on, but in particular, one thing that really chimed with me was he started off right at the top of our discussion, talking about the importance for Infarm of that link between profit and purpose, and that the two don’t have to be mutually exclusive. And I love how, as a company, they’ve weaved that into everything that they do from the business that they’ve built through to the culture that they’ve built across the company to the internal and external comms like that core purpose of the challenge they’re trying to overcome for the industry is there and is what drives them day in, day out. And I just thought that was fab
Russ: [00:34:17] Well, listen, that is it for this latest episode in this special series that we’re doing with Tyto. So, thank you so much, Holly, for doing that and look forward to doing some more in the future with you. If you want to find out more about Infarm, then their website is simply Infarm.com. We’d love to hear your comments on today’s chat, you can do that by sharing them on our Facebook, LinkedIn, Instagram or Twitter feeds, or you can do it in the comments of the YouTube version of this podcast. Those are all linked from the top of our website at csuitepodcast.com, where you’ll also find all our previous shows and supporting show notes, plus links to where you can follow us for automatic downloads of each episode via the likes of Spotify and Apple and if you like what you heard, then please do give us a positive rating and review. You can also subscribe to the Without Borders podcast from our partners at Tyto. All the details for that are on their website. Just head to TytoPR.com, click on the podcast link in the top nav bar and don’t forget, you can also download a copy of ‘Growing Without Borders, The Unicorn CEO Guide to Communication and Culture’ that’s available on Tyto website as well. That report is a great overview of the first 15 of our unicorn interviews. Don’t forget if you are a unicorn leader yourself and you’d like to be part of this series, please do get in touch via the contact form on the website at csuitepodcast.com. Plus, of course, anyone can get in touch with any feedback you may have. And finally, you can also reach me directly via Twitter using @russgoldsmith, or you can find me on LinkedIn. But for now, thanks for listening and goodbye.