Opportunities & Challenges of Business Start-ups - Borealis Fresh Farms
Borealis Fresh Farms Inc. is an agri-tech vertical hydroponic modular farming system in Timmins Ontario that produces locally grown produce year-round. Their goal is to increase the region’s capacity to produce local food and create new jobs – most of their produce is consumed within 50 km of where it was grown, providing food security and reducing the overall carbon footprint.
Co-founders Marc Rodrigue and Alex Cochrane started Borealis in January 2018 after two years of business planning and market analysis. They knew that a farm in Northern Ontario would be affected by the short growing season and they wanted something to grow year-round. With that in mind, they built a modular farm that is fully automated to control temperature, light and humidity among other factors. Within this ‘box’, they farm nutrient dense foods such as kale, basil, parsley & joi choy. This is the first phase of their three-phase growth strategy, which is a highly capital-intensive operation that will not generate revenue for two to three years, all of which was accounted for during the business planning stage. For a point of reference, each container costs between $160,000 - $180,000, plus upgrades, and can grow just under 4,000 plants.
At the 2019 Northern Ontario Ag Conference in Sudbury, Marc shared some of their challenges and opportunities that they've experienced as they've started their business:
The adoption of new technology can be problematic. Always think about all the impacts that the new technology can have and ways to mitigate those impacts.
Business modelling and validation is necessary to identify how pieces fit together but can be difficult to complete and validate. Borealis uses Strategyzer to complete this process.
Operating costs, specifically electricity, are high. This was anticipated and accepted during the planning stages, but once the main phases of the project are completed, they will assess other options. In the meantime, they have adapted their schedule to mirror peak hydro pricing and modulated air flow to help balance heat loads more.
Applied research and knowledge needs can be difficult to access as local institutions can lack the proper expertise to support such innovative and technical infrastructure.
Access to markets and distribution to those markets can be challenging, especially for smaller-scale farms.
Lack of food and ag-incubation spaces that tie the players in the food community together to create a collision of ideas.
Consumer trends are growing towards organic/clean/nutrient dense foods, buying local and vegetarian & vegan food options, bolstering a business case for Northern local food production
Advancement in technology is improving accessibility and sustainability for agri-tech businesses. For Borealis, they built their own specific traceability system to track every plant from seed to final sale.
Their operation also acts as a ‘lab’ where they can make changes and assess impacts, working to improve their yields and competitiveness.
Building local relationships have opened new markets and partnerships. Borealis has connected with local chefs, restaurants, grocers, social agencies, schools & consumers and is included in a local food box with the Anti-Hunger Coalition, new dishes offered at restaurants, etc.
Educating people on where the product comes from and how it has grown has created repeated business through the local farmers market.