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The supply chain next door

Thinkstock Indoor agriculture holds promise for supplements.
Indoor agriculture could take adulteration out of the supply chain for supplements.

The gathering in the room just off the bar at a downtown restaurant in Manchester, N.H., could have been called “eclectic.”

An Iowa farmer, a millennial talking excitedly about his almost-ready indoor lettuce farm, two men from a robotics company keenly eyeing a future in agriculture, all there to hear a former executive of a Del Monte company talk about transforming agriculture and inner cities with hydroponic operations that could make food fresher, cleaner and more local, connecting urban communities to food in a healthy way. But the executive, Mike Zelkind, who left behind a lucrative career in big business to found his small-staff/big-mission startup 80 Acres company, was not the only one with a transformative vision.

MegaFood CEO Robert Craven staged the gathering.

Craven is passionate about bringing healthier food options to more people, but he sees something beyond the save-the-world mission of 80 Acres and other ag-tech companies ready to bring agriculture indoors. It’s not an immediately obvious idea, but the emerging technology that includes low-energy LED lights to drastically reduce the carbon footprint and bring higher yields and nutrition to hydroponics may hold more promise for the supplement supply chain than the tomatoes and lettuce Zelkind says the company will be   growing for restaurants.

 “All the things you find in the supply chain with supplements can be solved if you are growing these things right up the street,” Craven said.

The economics are yet to be determined, but the vision is intriguing. Adulteration in the supply chain is among the biggest problems facing the supplement industry. Ingredients out of China and India are ubiquitous, with many changing hands at an unknown number of steps along the way, every one of those steps an opportunity for misdeeds.

Something like what Zelkind is proposing at the presentation in Manchester could cut that down to a single step. “We can do virtually any ingredient and we can do it right here,” Zelkind said.

Product consistency is another advantage, Zelkind said, particularly in a global trade vulnerable to climate change. “If they want to control potency and they want it to come in a certain way, there is no way to get that naturally in the field.”

Zelkind has a long history in big food, one that began at General Mills and included a series of stints piloting companies for private equity deals. Before launching 80 Acres, he had run Sager Creek Vegetable Company through its acquisition by Del Monte. He is self-funding the indoor farming company and has a staff of just eight people, but big plans to place shipping-container-sized pods in shuttered factories and other locations around the country. In Zelkind’s vision, tomatoes and vegetables wouldn’t be picked weeks before they are ripe, to be shipped across the country. They could be picked as they ripen, and shipped across the street. The environment would be completely controlled, with insects and pests stopped at the door. “Truly clean,” Zelkind says. “Truly pesticide free.”

Craven likes the idea on several levels. Building a fresh-and-local oasis in a food desert is a big part of the appeal, he says. Community development and jobs are very attractive aspects. Pulling together supplements and food in a way that benefits both is even better.

Craven says he can see possibilities for “somebody with 80 Acre’s technical skills in partnership with companies like ours that need what they might grow but also want to partner with a community that needs to put people to work and needs to feed the poor.”

But the idea, like so many, comes down to economics. Craven met with Zelkind in Manchester last week (80 Acres is based in Cincinnati). “We supplied him with all of the items that we buy, all of the different botanicals that we buy and supplied him with the price on that, per kilo,” Craven says.

The potential benefits go beyond the adulteration and supply chain issues. Working within the confines of California’s Prop 65 regulations, it can be difficult to get something as simple as a carrot with acceptable levels of lead.

Growing indoors, away from the prevalence of contaminated soils, eliminates that risk. “That opens a whole world of possibilities.”

Zelkind is focusing on food and not herbals, but he sees few challenges in growing the ingredients companies like MegaFood use. “Herbs are not a particular challenge.”

Speaking last month, Natural Alternatives International CEO Mark LeDoux said he is another believer in the hydroponics for supplement ingredients. “Any time you can bring things closer to market, it’s a good thing,” Ledoux said. After all, LeDoux noted, indoor herbals is a proven concept. “Look at the medical marijuana market.”

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