Editor’s Note: AgTech X was acquired by Agritecture Consulting in 2019. Having learned several lessons from our former community of doers like Regina, the team at Agritecture built a new online platform to help the next generation of entrepreneurs plan their farms smarter. We call it Agritecture Designer.
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Regina Bellows is a marketing project consultant based in New York City who spent the bulk of 2018 launching an indoor mushroom farm in Brooklyn from scratch. Here, Regina explains how she became an urban farmer, offers key learnings from her experience, and makes a call for potential successors. (Editor’s Note: The business was later sold in 2019.)
Part 1: Before the Farm
It all started with the bees. I read that the bees are dying. This was deeply disturbing. Bees are the cornerstone of many ecosystems—being the primary method for transporting the pollen that drives plant reproduction.
Why are the bees dying? Google says it’s primarily pesticides and monoculture.
Monoculture, by the way, is the agricultural practice of growing a single crop across a substantial expanse of land. All the flowers for that crop bloom and die around the same time, wiping out the source of food for bees that live in that area, As a result, bees have to be carted off on a truck to the next field. They’re not built for this and often die off in droves (unless the pesticide poison gets to them first).
So how do we stop our pesticide use and monoculture?
Indoor, urban, vertical farming.
I immediately began volunteering my time at a vertical farm startup in Downtown Manhattan. After that, I worked for an agtech startup. And in the thick of it all, I ran into a man growing gourmet mushrooms in NYC and selling them to restaurants. He said they were selling like hot cakes. He wasn’t lying.
Part 2: Planning the Farm
When I found an offer for a little mushroom farm startup course in my inbox one jobless morning, I purchased it. My research told me that gourmet mushrooms could be profitable on a small scale without needing to raise startup capital.
So, I set up a small 4’x6’x2’ grow tent in my apartment. I finagled with humidifiers until I could maintain 90% humidity and set up a window AC to maintain about 58 degrees Fahrenheit. I put a shelf in there and some LED lights. I tracked down a supplier and ordered blocks of mushroom mycelium in the mail.
And all the while, I was building this economic model calculator.
Here it is, if you want to see it.
It’s not super granular—it shows one mushroom variety and one sales channel at full production speed—but I thought it was a good place to start. It doesn’t include any revenue from workshops, farm tours, or goods purchased and resold.
With mushrooms to sell, I walked door-to-door in downtown Manhattan asking to speak with the head chefs of restaurants. I showed them the mushrooms and told them my plan to build a farm. I asked if they wanted to buy any. The third chef I spoke to said yes! He purchased from my little grow tent several times before I shut down the tent.
In the meantime, I had tracked down the perfect space to build the farm. My friend lives above an unused commercial warehouse in Prospect Heights, Brooklyn. I met the landlord and offered to rent the back room for my urban farming project. He agreed!
The space is ideal because it is a 300 square-foot room right next to 2,000 square feet of rentable space, just waiting for the business to expand into it. I didn’t exactly have the perfect vision for expansion yet, but I brainstormed a few ideas:
- A bigger farm (meaning more mushroom grow chambers or maybe hydroponic equipment)
- A makerspace offering plenty of workshops, including a farming apprenticeship
- A research facility (perhaps in collaboration with people interested in making new biomaterials, exploring agricultural technology, etc.)
It also has a garage door which can be used to accept deliveries. I currently park my Prius in there.
Part 3: Starting the Farm
The grow chamber was built on a part-time basis over the course of about two months. It was built out of angle iron, aluminum-covered insulation, and the outside was finished with drywall. There are two rows on each side for the blocks of mushroom mycelium to sit on while they grow. The room has high ceilings which allowed me to build them six shelves high.
I made it feel like Portland, Oregon, in there with a commercial humidifier, an AC/Heater, and LED lights all on automatic timers and sensors.
Outside of the grow chamber, I built shelving, set up a harvest table, and bought a walk-in cooler. I also built a database using Airtable to track production over time, and, eventually, I began to grow.
I created an LLC and signed up to sell at the closest farmers market with a wealthy demographic (that’s the target market for gourmet mushrooms). Market day #1 was pretty anticlimactic, because I ran out of mushrooms three hours in.
I quickly learned that the market customers needed a lot of advice around how to cook mushrooms. This was a surprise to me. “How do you cook these?” and “which type of mushroom would you recommend for an omelette?” were the most common questions.
For anyone who is wondering, all types of mushrooms are delicious in omelettes!
Part 4: Learning How to Farm and Sell!
There were dozens of wrinkles to iron out right away: What market signage is the best? How can I easily label the blocks of mushroom mycelium going in and out of the grow chamber? What is the most appropriate price at the market?
Grow Chamber Production
- I learned that 92% humidity is the very highest I can set the humidistat levels to before it begins raining and creating a pool inside the grow chamber.
- I learned how important it is to have backup equipment. The $40 exhaust fan in the grow chamber might say it is semi-waterproof, but it goes out every six weeks. And the mushrooms are not very happy without oxygen.
- I learned that I could cover the cost of a second employee at the booth with me by simply adding a secondary product. I chose mushroom tea. I wish I had added truffle oil or mycelium grow kits, too, to see how many upsell offers I could pack in.
- I learned that, although cardboard is usually ideal for storing mushrooms, plastic bins with holes on the sides (and only the sides) are the only way to avoid a wet mush during rainy days at the market.
- I learned that the mushrooms might get a lot of “oohs” and “ahhs” at the market when they are pre-portioned and displayed in a pint box as a beautiful, ready-to-sauté bouquet, but the quantity of garbage from trimming off the mushroom stems will bring the price per pound down too much. Bulk mushrooms are the way to go.
One day at the market, a customer asked if he could buy the trimmings. (Trimmings are the garbage we cut off the ends of the stems before displaying the mushrooms.)
“Sure!” I said, “That’ll be $5.”
I made a new sign called “soup mushrooms,” and I began to pile handfuls of what would otherwise be garbage into pint boxes for sale.
There were dozens of restaurants jumping at the chance to work with a hyper-local mushroom farm in Brooklyn. Many approached me without me having to make the effort! I took on two standing orders. But I made a few mistakes along the way—all of which were highly educational.
- I made the mistake of not batching the deliveries (finding restaurants that are nearby and telling them they need to accept the same delivery days/times if they want to work with me).
- I made the mistake of sampling with mushrooms that were harvested early (the younger they are, the smaller and darker blue they are). The earlier I harvest, the lower my yield is. I had to deliver big, light blue mushrooms to the restaurants, or else the costs would have to be raised.
- I also wish I had explained to them that these mushrooms, since they are extra fresh, will be delivered weekly—not biweekly. That way their small orders of this novelty product can become bigger orders to cover the delivery costs.
Part 5: Stepping Down
Remember this calculator I mentioned before?
Well, after four months of operations, the numbers are holding strong. This business is positioned to succeed—especially with the food trends for 2019 projecting strong sales for fresh mushrooms and farm-to-table restaurants on the rise.
And starting a mushroom farm in Brooklyn has shown me that farming indoors in urban environments has the ability to succeed now. It’s just a matter of finding creative ways to make it work while the world is slowly making the shift.
But I’ve come to the conclusion that I’m not the right person for this anymore. This business needs someone with a passion for cooking that’s so strong they can have those conversations all day long with new and loyal customers alike. And, ideally, this business would be run by someone with the vision to design workshops and offer regular tours of the farm, as an add-on business model to make extra revenue.
Growing a business to full-speed production will require cash flow. It is never a smooth journey, and there will be expensive hurdles along the way, like learning that an employee isn’t working out or finding a bigger walk-in cooler.
And I’ve already spent a lot of cash on the build and the time-consuming learning curves—some of which I have outlined above, but there were dozens more. In fact, I am offering training during the transition of farm ownership to relay all these detailed learnings in order to lessen the upfront costs.
I have done what I could to help push this industry forward, but now I am looking for the right person to pick up where I left off. Let me know if you think you might be that person by emailing regina [at] thefarmroom [dot] com.