Containing the world’s food challenges
HI-tRaC
The author’s shorthand for Happiness Index, Infrastructure, Talent, Regulations, Access and Capital. The six pillars that make UAE a great place for a startup. This week, the focus is on Infrastructure. This infrastructure is helping a startup contain the world’s food challenges.
Where will all the food come from by 2050, when the world’s population will grow from seven billion people today to over nine billion? Today, the world’s agricultural supply chain, including all the components from farm supplies to farm and from farm to table is estimated to be a third of the world’s GDP — one estimate is from Frost and Sullivan, indicating a level of $20 trillion. Arable land is scare and often the source of conflict. Degradation of nature to meet the growing demand is one of the key contributors to climate change.
About 51 per cent of this population will live in cities. This has coincided with the growth of cities like Singapore and Dubai. These cities are highly dependent on a food supplychain that is amazingly complex. The sources of food in the supermarkets in these cities is a lesson in Geography. Lamb from Australia, bananas from The Philippines, mushrooms from Japan, apples from France, iceberg lettuce from Holland, okra from India. The list just goes on. A visit to the Fruit and Vegetables market off the 311 is highly recommended to see the sheer scale of what it takes to keep Dubai’s diverse population fully stocked with fruits and vegetables that they are familiar with.
Concurrent with the growth of population, is an acute awareness that animal-based nutrition is not sustainable. The Food and Agriculture Organisation (FAO), a United Nations entity, estimates that 60 per cent of the world’s arable land is given over to the rearing of livestock. The World Wildlife Fund (WWF) estimates that the capacity of the world’s fishing fleet is two to three times larger than what the oceans can sustainably support. Along with the scarcity of land, the United Nations Environment Programme (UNEP) estimates that by 2025, 40 countries in West Asia, North Africa and Sub-Saharan Africa will face water-stress or scarcity conditions.
Containing the challenge
Tsuyoshi Stuart Oda, co-founder of Alesca Life, is an investment banker by training. While studying Political Science at the University of California, Los Angeles (UCLA), Oda decided to attend a couple of Business Economics lectures to learn about and participate in Google’s IPO in 2004. Soon realising the importance and impact of the finance industry in improving the lives of millions, he went on to do a dual track programme for his Bachelor’s degree.
Following several internships at Merill Lynch, he joined their ranks in the Tokyo office. While being a second generation Japanese American, Oda had never lived in Japan before and learned to adjust to a new climate, culture and company. After witnessing (and surviving) the global financial crisis, he moved to China in 2011 to work in the business development team at Dell. He was deeply involved in Dell’s strategic expansion plans across 10 key global emerging markets. While researching his coverage markets, Oda realised the opportunity to apply his knowledge and passion to addressing one of the biggest common challenges faced in developing countries. The shortage of quality nutrition and safe water.
Humankind has the unique collective ability to turn situations around. Urban farming, in the form of vertical farming is a viable and sustainable trend. However, the challenges are complex ranging from consumer psychology to municipal zoning regulation, micro-logistics to business models.
Oda considered some of the key challenges.
Up to 50 per cent of all food that is produced gets wasted. In developed countries, artificially short expiry dates, overprocurement and processing, and fruits and vegetables that do not “look” good aesthetically, although viable as nutrition, are wasted. In developing countries, where food scarcity is a huge challenge, the wastage is due to inefficient logistics, poor farming practices and market access.
Another challenge is that agriculture has several broken processes. Although agriculture related technology (agtech) is big business, it has previously worked in segregated silos with little synergistic collaborations. This is partly due to the social and political challenges related to agriculture.
The third is preference and choice. Food habits are formed because of what is available in the market. For example, millets in the Indian sub-continent which are much tastier and more nutritious than wheat or rice, lost out to bland, poorvalue substitutes because the latter were backed by a viable value chain from seed-to-store. Once habits are formed, it takes a lot to change. Oda co-founded Alesca Life Technologies to find commercially viable solutions that tackled some of these challenges. While there are plenty of academic publications, the application to the real world has been short on performance. What makes Alesca unique is the deployment of their technology in underutilised or idle urban space. Spare space in apartments, underground parking structures or industrial warehouses. The company uses LED lighting (growth lights), combined with hydroponics within contained spaces to allow urban farmers to grow vegetables and fruits year round as localised to the point of consumption. Seedlings are grown in modularly designed trays that are stacked in vertical columns. This technique allows a one square metre footprint to yield five to 15 square metres of growing space.
Going beyond the basics of water, lighting and space, Alesca has developed controlled nutrition, remote smartphone monitoring and control, and an operational management system. With these tools, the urban farmers of tomorrow may seldom need to go to their farm to check on their produce. Alesca then brought the process to an industrial scale by developing stackable farms within shipping containers. Oda exhibited the Alesca product in Abu Dhabi in February 2016. This generated very high levels of interest from key leaders and decision-makers in the UAE. In late 2016, Alesca was selected as a finalist in the Dubai Future Accelerators programme to pilot and scale their technology in the Middle East. Oda is now busy developing a strategic pipeline in this part of the world.
Not resting on the team’s progress to date, Oda recognises that changing habits and preferences is a major challenge. So is the need to find solutions for high-calorie staples. Although nutrition has been solved at sustainable price-levels and logistics challenges have been minimized, there is still work to be done. It will take education. Plus sustained support from forward looking multi-national corporations such as Mercedes Benz and policy makers such as the UAE government. The writer is a director at Vyashara. He’s a digital banking and digital financial services evangelist, practitioner, advisor and consultant. Views expressed are his own and do not reflect the newspaper’s policy. He can be reached at ves@vyashara.com.