What’s this farm doing in the middle of Newark? Trying to change the world

It sounded crazy seven years ago when the indoor agricultural company, AeroFarms, announced it would grow crops in multi-story buildings in Newark’s Ironbound section.

The company leased a shuttered steel beam supply company on Rome Street, tore down a rusted warehouse and built a 70,000-square-foot building. It filled it to the ceiling with grow tables 80 feet long and stacked 12 layers to a height of 36 feet.

AeroFarms uses aeroponics and LED lights to grow its products. The company says it can produce up to 2 million pounds annually of kale, bok choy, watercress, arugula, red-leaf lettuce, mizuna, and other baby salad greens. It’s all done without soil, sun or pesticides, and the company claims to use 95% less water than outdoor farms. AeroFarms-branded leafy vegetables are sold in the northeastern U.S. at retailers, including Whole Foods Market, ShopRite, Amazon Fresh and FreshDirect.

AeroFarms, one of the world’s largest vertical-farm outfits, is set to go public in July after closing a merger with Spring Valley Acquisitions, a special purpose acquisition company (SPAC) sponsored by Dallas-based Pearl Energy Investments. AeroFarms will list on the Nasdaq exchange under the new ticker symbol “ARFM” with a $1.2 billion initial valuation.

If the current movement to grow more food in urban settings by high-tech indoor methods follows the path that some predict, Newark’s vertical farm on Rome street is the largest indoor farm in the world and will be an important part of the history.

“The vision long term for the company is to take a new understanding of agriculture to a new height and then feed people and to apply that knowledge to grow better plants,” said David Rosenberg, AeroFarms’ chief executive, who recently announced plans to expand its Newark headquarters.

AeroFarms operates nine indoor farms in four Newark locations, and one in Virginia and a growth and research facility in Abu Dhabi as part of a $100 million investment by the United Arab Emeritus.

Rosenberg said the company plans to build a network of new high-tech indoor farms across the United States. The first is currently under construction in Danville, Virginia, on the North Carolina border in close proximity to more than 1,000 food retailers and approximately 50 million people within a day’s drive.

AeroFarms has more than 150 employees in Newark, including grow-house workers, horticulturists, engineers and data scientists who represent a dramatic shift from the scrap-metal yards and chemical plants and breweries that dominated the Ironbound.

Marc Oshima, AeroFarms’ co-founder and spokesman, said the company offers computer and financial literacy training programs, and the workforce includes former criminal offenders and homeless people.

“The biggest impact we’ve had on the city is inspiring other tech firms to come to Newark,” he said, describing how AeroFarms donated offices to Newark Venture Partners, a business incubator funded by Don Katz, founder and chief executive of Audible.

Aaron Price, president of TechUnited, a non-profit that lures startups to New Jersey, said technology companies like AeroFarms figure in luring jobs and students and new residents to New Jersey’s largest city.

“By leveraging technology, cities can thrive. Newark has embraced incoming technology companies and they are embracing Newark,” he said. “Newark is having real job growth.”

In addition to selling crops, AeroFarms announced various partnerships with governments, universities and Fortune 500 companies to help solve agriculture supply chain problems. For instance, AeroFarms will publish a study to improve leafy green production, flavor and nutrition next year with the Foundation for Food and Agriculture Research, a non-partisan, non-profit funded out of the U.S. Farm Bill. The findings are aimed at helping farming industry.

Agriculture is responsible for 15% of global greenhouse gas emissions, and accounts for one-fifth of U.S. fossil fuel use, mainly to run farm equipment, transport food and produce fertilizer, according to Columbia University’s Climate School.

As excess fertilizer washes into rivers, streams and oceans, it can cause eutrophication, or algae blooms that proliferate and kill aquatic life. As of 2008, there were 405 dead zones around the world, the university’s researchers say.

The United Nation’s Food and Agriculture Organization (FAO) says more than two-thirds of the world’s fresh water is used for agriculture. And around the world, farmers are losing the battle for water for their crops as scarce water resources are increasingly being diverted to expanding cities.

To feed the growing and increasingly urban global population of 9 billion expected by 2050, FAAO estimates the world must boost food production by 70% through higher crop yields and expanded cultivation.

AeroFarms’ business strategy is more concentrated on monetizing its intellectual property than selling leafy greens. In its Securities and Exchange Commission disclosures, AeroFarms claims 250 inventions and 45 recognized trade secrets that optimizes cultivation of 550 plant species.

Rosenberg compared AeroFarms’ trajectory to the growth of Amazon, which began focused on books, and Tesla’s development of batteries and focus on autonomous vehicles after gaining a foothold in electric vehicles.

“In the same way, leafy greens at AeroFarms is our beachhead,” he said in a recent investor call, “and we look forward to utilizing our platform in many ways.”

George E. Jordan writes a weekly column on business and development in New Jersey. He may be reached at george@griotmediaworks.com