Name: Fortune Global Forum 2023: Climate Innovation Spotlight: Food, Transformed
Uploaded: 2023-11-29
Duration: 16 min 29 s
Description: Sky Kurtz, Founder and CEO, Pure Harvest Smart Farms In conversation with: Ellie Austin, FORTUNE

Sky Kurtz, Founder and CEO, Pure Harvest Smart Farms In conversation with: Ellie Austin, FORTUNE

Fortune Global Forum 2023: Climate Innovation Spotlight: Food, Transformed 

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Access to food is a concern that affects individuals and communities worldwide and especially in this region. According to the World Bank, in the Middle East and North Africa, half of all food that is consumed is imported and 90% of the food consumed in Gulf Cooper operation countries is imported. But here in the United Arab Emirates, significant steps are being taken to ensure the population has access to fresh locally produced food. Uh In our final climate innovation spotlight of the conference, we're highlighting one of the innovative companies that's working to do just that pure harvest smart farms uses cutting edge sustainable agriculture technologies here in Abu Dhabi and in other regions to produce a bounty of produce in desert environments. Sky Kurtz is the founder and CEO of pure harvest smart farms and he joins us today to talk more about the food production revolution. Please welcome Sky alongside Fortune Live media, deputy editorial director, Ellie Austin. Hello everyone. Sky. Welcome to the stage. So Matt kind of briefly outlined what pure harvest does, but I'd love you to give us more of an overview of its mission and how that came about. Well, so pure harvest is a technology enabled agribusiness. But really our mission is to make a more safe and sustainable food system. And beginning in some of the harshest environments in the world, we started here in the United Arab Emirates. We've expanded in Saudi now Kuwait Singapore soon, Morocco, soon. And really what we're trying to do is kind of save the world from bad un tasty, you know, unsustainable, produce production. And we do that, we design, procure construct and operate these very high tech climate controlled greenhouses that then allow us to farm really anything inside and to do so with greater resource efficiency, very high output per unit of input like water, energy, fertilizer, things like this. And we've got some footage, I think of one of the greenhouses that you were just mentioning. Let's roll the footage if we have it. What are we seeing here? Sky? I mean, the first thing I noticed personally is that there isn't much soil, for example. So how are we making these very juicy looking tomatoes thrive? In fact, it is soilless agriculture, we fertilize and feed the plants hydroponically. So it's think of it as a mineral bath sitting within a substrate. And that's how we're able to give them a precise amount of, of irrigation and nutrients for the specific needs of the specific variety that we're growing. And it's very resource efficient. We're able to recirculate the water and the fertilizers. So we use, you know, lower consumption and much higher output and precise requirements of the plant, which is why you see this near perfect food. And what's your strategy for deciding which specific produce to focus on it all starts with the market, right? So we're unlike any fresh produce company. In the end, we participate in a global fungible commodity market, right? In, in food. And so we have to be very mindful of based on where the market is, its demands, the diets of people, also the economics and alternatives of what they're is supplying the country is, is really what defines what the opportunity set is and where, where this solution is particularly competitive is anywhere where it's a water intensive high value short shelf life good. So tomato capsicum cucumber, strawberry, aubergine lettuce, microgreens, herbs, berries in any variety. But people ask us what, what can you produce? We really can produce anything. We make a perfect environment for food to grow inside and do nature to do its job and that genetic material to print beautiful food. But where should we is the more important question and where we should is in places like I mentioned where there's import dependence, where there's a severe climate or and you know, seasonal supply patterns. And when, when in a world where you are shipping water around, it is typically unsustainable both in terms economically long term, but also environmentally, right, with the carbon footprint of that food, when it's being air freighted across the oceans is not promising. And you were saying before we came on that you tend to focus your operations within a certain distance of the equation. Can you explain more about that? Yeah. So we, we typically say, where are we special the way we farm in that, in that greenhouse you saw, we're not alone folks in Holland and Canada and America and Australia and other parts of the world farm in greenhouses from low to high tech. What's special about us is our focus on climate management systems. So doing that in harsh difficult places like the United Arab Emirates, but also in the construction technology, the materials and redundancy and resiliency we build into the system, right? That's we're more climate tech and construction tech than Agtech. We're ag tech because we make money selling fresh produce. We are farmers, right? So with regards to the the markets we target, it's typically places that that proximity to the equator is important. And the reason why is that at the most fundamental level ag is sunlight co two water nutrients. That is the chemical process of photo census of plant creation, right? Sun and co two are abundant in places like the Middle East. And then if you look at the inputs to farming, this is true in a field farm in Botswana or in an A I powered high tech vertical farm in Manhattan. But that the inputs are light, whether artificial or real or natural light, labor, land, energy, water tax, transportation and capital, right? These inputs are the same. What's interesting is really what's different around the world? Are those inputs on like capital, energy, light land use, we are an extremely efficient use of land, high output per unit. We are in light. I mentioned that in full census is key. So why are we special in the middle is where the sunlight is and wherever there's light there is yield and then yield affects the entire economics of production. It makes the solution economic which has the added benefit of being much more sustainable, right? And I think with cop coming, that's part of the reason we're, we're featured there heavily and participating heavily. We're trying to drive awareness of people of the embedded water and the embedded carbon in your food is quite significant and these are major contributors to climate change. And so really if we farm better and feed better, we can of course help to mitigate a piece of this climate change. Do you measure the carbon footprint of these greenhouses? And how does it compare to other methods of producing, produce? So we do internally and we're soon externally, we're working on being audited so that we can actually share this data. But really what it comes to in the end, our solution and solutions like ours decouple the relationship of food production from climate and they instead marry it to energy and capital sources So we are as sustainable as the energy available to us and or the energy of the alternative produce that we displace. So if I'm gonna benchmark us against Holland, who's famously one of the most efficient resource focused food energy, water nexus players in the world and credit to them, their leaders in this industry globally. But if you're in the UAE and you're buying a tomato, say from Holland, that production is produced particularly during the winter months, using lots of energy for heating. It's using also energy for artificial lighting and then you're trucking it, air freighting it and it lands. So if you look at the full energy system including the transport, it's quite significant, right? You're burning jet fuel to get food here here though we of course have to control the climate and in markets like the UAE where we use grid energy where as sustainable as the grid, which credit to the government is getting increasingly more sustainable with the nuclear power utility online, huge utility scale solar deployments. But ultimately, we're reliant on that source of energy for the climate needs which are partially offsetting that heating, artificial light and air freight, right? But then on the other hand, in a market like Saudi, we built in Saudi with a 30 megawatt solar power farm. Over 80% of our total energy demand is renewable energy from solar power and clever energy storage techniques. There were dramatically more sustainable than any alternative and importantly, water, that's the other piece water. It's what source of water. And if that water is desalinated, burning natural gas, for example, that is against you. But if you're able to use much less water, like for example, versus incumbent local farms they use, you know, typically 7 to 10 times more water than we do per kilogram of production. So that's a massive step change in resource efficiency in the UAE and the GCC more generally, we're relying on very, very high levels of imports when it comes to food. And I wonder how scalable is your technology? What capacity potential does it have to really reduce? That figure? I think it's 85% of produce is imported into the UAE. Yeah. Well, so again, we we focus on produce and I'll come to that in a moment. But I think broadly just food system because we only earn one piece of the calorie pyramid, right? Fruits and veg. But of course, I believe people ask about food security. Food security is of course the living, it is calories to fuel the human life. And that really sits in more grains and pulses and et cetera, being honest about keeping people alive. But living is what we all want to do and about quality of life and longevity of life. And that's about nutrients and calorie density and health, which ultimately more people should be consuming fruit and veg and more of it. So to the point of what can we do? This is a region particularly troubled by import dependency and by health challenges, obesity rates that are off the charts and growing diabetes rates that are problematic. So we need to create a system that encourages and makes available and affordable, high quality, safe, sustainable tasty produce, to invite people to consume this versus alternative. And that's where in a region like this, particularly one that is wealthy, has access to capital, abundant access to energy and increasingly more renewable. We can make a huge impact, right? I I believe that a huge portion of the fresh produce, demands of the of the region can and should be produced locally. But back to that should produce. People ask me, should we be producing wheat or rice? We absolutely could, we definitely should not be that the water intensity that you can there is and the perishable rice, for example, could be produced somewhere where rainfall is abundant, land is abundant and labor costs are low and it can be ground stored and siloed, shipped in oil tankers, you know, an incredible efficiency in the value to weight ratio of the shipment and then it can be stored and have food security and resiliency in a portfolio of storage solutions. Not true of a tomato, not true of a lettuce. So that's where we should focus. And to the point I believe in this region with support. Ultimately cost of capital is our challenge. If we can drive down the cost of capital. This is food infrastructure, we need to finance more like airports and bridges then like venture capital backed tech start ups. And but unfortunately, that's it's a transition there needs, we are trying to prove that one of the pillars of sustainability, right is profitability. We got to prove that these farms truly generate economic value and are thus infinitely fable, which I think we're doing now. But it's a, it's been a long journey to get there as we've been inviting folks to focus on this as an investment sector. So how does the cost of your, for example, compared to the cost of a tomato that is imported into the UAE from Europe? Good question. So from Europe, we're 25 to 60% cheaper, right? We we we are able to dramatically compete on both quality. We're higher quality because we're able to harvest later. We are typically higher bricks of the sweetness and higher quality. And I think our consumers in the region, I'm looking at one of them would objectively state that that is true. So we we beat them on quality and beat them on price. So we're strictly dominant from a game theory perspective, right? Versus across our, we actually won an award recently. That was the first ever award of the product of the year for the entire portfolio of product. So the quality is superior, we're using the same genetic material, we just bring it here, give it perfect conditions and more light than it's ever witnessed. And it has a fantastic outcome and also credit to my team. We have a committed and wonderful group of agronomist and operators people that are passionate about making great produce. But I would also say though, um we're as, as far as in the region, we're increasingly now increasing the portfolio of what we supply. We started with just tomatoes and then now we're in strawberries and capsicums and leafy greens and spinach and blackberries and raspberries. We're trying to increase that portfolio. Our goal is to build a global fresh produce brand. You should be able to trust a brand and a product just like you do a Coca Cola. If you open it in Beijing or in San Francisco, you have the same experience and you have confidence in that not true, produce very few global brands, right, Driscoll's and even then if anyone's tried Driscoll's in different markets, it varies dramatically. The experience. Why should that be true in a world where we can use technology to give that consistent experience and back to the cost typically, especially if it's an air freighted or imported market, we can be much more cost effective. Now, importantly, though I want to be transparent about versus local seasonal, low field grown or low tech grown production, we are typically a premium typically 20 to 45% above. So we are a new category in the markets, we enter a premium local now over time and I mentioned this to you backstage is our vision is eventually to democratize access to solutions like this. It requires incredible infrastructure, investment and capability to do so. But really what makes it possible anywhere is the cost of capital and the availability and cost of energy. But what's great about this too? We're a major energy consumer because I mentioned we decouple food from climate, instead married to energy and capital, but we're able to use a lot of sources of energy. For example, we're working on a project in the Philippines in Manila. Looking to co locate with the geothermal power plant using behind the grid power CO two, which we clean and feed to the plants, which is a source of energy as well. And we use the waste heat and absorption chilling and create coal to dehumidify. So we feed off of this sustainable source of energy to provide the we're able to be competitive selling tomatoes in Manila, right? And I think that's the kind of partnership that we need to do around the world to make this infrastructure replace traditional agriculture in a world where climate change is challenging traditional production methods. We've only got a couple more minutes and I've got two questions I want to ask you. So let's treat kind of quick, quick fire. Um The first one is if we zoom out and talk about geopolitics for a second and I know this is a big question to answer briefly. What impact are the conflicts in Israel, Palestine and Ukraine having on your strategy? I know they impact the global food supply chains quite significantly, very quickly. Ukraine affected, fertilize markets over the world. We use a lot less fertilizer. It was admittedly good for our cost structure, bad for the world but also an awareness event of the importance of securing your food supply. Unfortunately, governments quickly forget in peacetime, everything is great trading, not so good with shocks and Israel. Palestine admittedly, both sides of the conflict have reached out to us about fresh produce supply. These shocks are awareness events to the world about you need a portfolio of of food security solutions. And I believe unfortunately what's bad for the world is good for the theme of controlled environment, agriculture of technologies, increasing production, potential and domesticating or food sovereignty as opposed to just food security where you control it within your own borders. So I think it's actually a net benefit but unfortunately a bad way to get there. And what you said both sides have reached out to you specifically, what have they been asking for fresh produce, supply food for you to supply food, to ship food and supply food and we of course capacity constrains. But there's ultimately shocks. I mean, even in that specific conflict region, there's a lot of fresh produce that trades. Jordan Iran also Israel's own production and Palestine's own production supplying and that's shocked. Right. It's now and with fresh produce supply there's, it's perishable. You don't have a stockpile of it. And that's problematic. Now, ultimately, people survive and moving to things like grains that can be carried in a sack, but it's not long term sustainable. Right. And I think, I, I hope and believe one day infrastructure can make this possible for people to supply their own needs. Sky. We've got to leave it there. Thank you so much for your time. Thank you. Appreciate that. Thanks for having me.