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Hydroponics startups are slowly growing on Indian consumers

Written by Monika Ghosh Published on 

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The COVID-19 pandemic has dramatically accelerated the demand of organically grown produce.

Chennai-based biotechnology graduate Rahul Dhoka’s rooftop looks like a maze. Only, it’s a maze of over 6,000 organically grown leafy vegetables and herbs such as carrom, kale, lettuce, and spinach.

These vegetables, grown in planters made of PVC pipes that have taken over his 90 square feet rooftop, are grown using hydroponics technique—a method of growing plants in nutrient rich water instead of soil. Non-commercial hydroponics farming does not require large spaces and can be grown on rooftops like Dhoka’s or even in a smaller set-up such as a doorstep. They can also be designed as vertical farms to optimize the land area.

In 2016, Dhoka got into hydroponics as a hobby, and three years later, once he mastered the technique and learnt how to create different design structures, he founded Acqua Farms, a consultancy startup that helps people set up their own hydroponics farms.

Dhoka told KrASIA that the consumer interest in hydroponics has increased dramatically due to the COVID-19 pandemic as people have become more conscious of what they eat and want to know where their food comes from.

“My revenue in the first two to three months of COVID-19 was almost the same as the entire previous year’s,” said Dhoka, founder and CEO of Acqua Farms.

Eat healthy, live healthy

Acqua Farms is one of the several organic food companies that have reported a surge in sales during the pandemic while individuals are showing interest in growing their own produce. This trend of owning farms and eating healthy has boosted the demand of hydroponics farms.

The startup, in addition to selling hydroponics starter kits, also runs a subscription service for people with no knowledge of maintaining a hydroponics set-up. Under the subscription service the startup assigns an agronomist who takes care of the plants and monitors them once a week. Till date, Acqua Farms has helped set up over 500 hydroponics farms.

Rahul Dhoka, founder of Acqua Farms posing with the hydroponics set-up on his roof top. Photo credit: Ashwin Prasath

One of the primary benefits of aquaponics farming is that since plants receive nutrition directly from the treated water, they grow around 15-20% faster than traditional soil-based farming, providing higher yields, said Dhoka. This also allows more harvests of the same crop than is possible in traditional farming, giving hydroponics farmers an edge.

“With good management, you can even get 16 harvests in a year [for leafy greens], whereas in soil-based farming only three or four [harvests] are possible,” he said.

Dhoka said, in addition to higher yields, hydroponics is also a sustainable way of farming as it utilizes 90% less water than traditional farming. The benefits of hydroponics don’t stop here: since it can be put together inside buildings and roof-tops, it reduces carbon footprint and food wastage as the produce doesn’t require any storage or long-distance travel, which makes it ideal for farm-to-fork model.

According to the Food and Agriculture Organization of the United Nations, 190.7 million Indians are undernourished. Amidst this dire situation, 16% of India’s agricultural produce is wasted due to the lack of proper storage and transportation.

Hydroponics startups are largely focusing on growing leafy greens due to their shorter crop cycles, easier management, and lesser space requirements. It also caters to the niche market of exotic green produce like kale, lettuce, and herbs.

Commercial-scale set-ups

While Acqua Farms works mostly with individuals and families, a few hydroponics startups focus on building commercial-scale farms as well. Unlike non-commercial set-ups, these require greenhouses or poly houses to provide complete climate control. This allows the production of crops irrespective of the weather conditions.

This is where Mumbai-based startup Barton Breeze comes into the picture. It sets-up farms on the rooftops of apartments as well as inside the buildings. To ensure its clients have a steady income, Barton Breeze buys their produce at a price which gives these urban farmers a 30% profit on each harvest. The startup then sells this produce in the market.

The entire process is hassle-free for farmers as Barton Breeze manages their farm, and takes care of marketing, transportation, and sale of the produce.

Large and commercial-scale hydroponics farms require to be equipped with advanced automation systems to ensure the yield is unaffected by weather conditions.

Barton Breeze enables such farms with automation systems to track their farms remotely. The startup’s app iFarm offers a farmer remote access to the farm, “wherein a farmer can not only just monitor but also control the farm remotely which means sitting at home, you press a button and things will happen on the farm,” Shivendra Singh, CEO, Barton Breeze, told KrASIA.

Agritech, hydroponics, Barton Breeze
S Sudhanva, COO of Barton Breeze. Photo courtesy of Barton Breeze.

Through the app, the farmer can control the temperature and humidity, and even control the dosing of nutrients in the water. The app also allows users to get updates on their farm data such as energy consumption.

When anything in the farm fails or goes wrong, the farmer gets an alert via email, message, or a buzzer in the app. This not only makes it easier to manage large farms spread across acres but also reduces the need for human labor.

Additionally, Barton Breeze offers farm management software to maintain day-to-day activities. This software can help farmers identify their approximate date of harvest, and expected yield. Moreover, the company installs humidity sensors, sunlight sensors, climate control systems, and thermal sensors in the farm that send alerts when stocks are running low and highlights issues like pest attacks and any increase in the level of plant allergens.

To reduce human contact amid the pandemic, the company has automated customer onboarding through its app. But, most importantly, it has created an artificial intelligence (AI) system that provides crop management guidance to farmers. “For example, if your plant’s leaves are yellow, [the] AI can find out why they are yellow, what are the remedies, and what are the things you can do to cure it,” said Singh.

Singh claimed Barton Breeze grew at a CAGR of 500% year-on-year in 2019, and saw twice more online visitors this year compared to 2019.

Investor interest in hydroponics

According to Singh, hydroponics produce is very well accepted in urban cities like Mumbai, Delhi, and Bengaluru. Spending is not a problem for customers–it’s the unavailability of options near them that keeps people from accepting hydroponics, he said. The products are sold in supermarkets, and unlike a couple of years ago, they have a distinct label that mentions they have been grown using hydroponics.

Most hydroponics startups are still, however, struggling to match their price with the market price of traditional farm produce due to high operational as well as production costs.

However, Singh said Barton Breeze has managed to significantly bring the cost down. “We have brought down the production cost. So, if something is coming from Bengaluru to Mumbai and costs INR 200 (USD 2.70) per kilogram, we offer it at a price of INR 120 (USD 1.62) per kilogram which is lower than the market price,” he said.

With the prices of hydroponics produce being at par with or lower than traditional farm produce, Singh believes the customer base for the former is expanding which is currently limited to upper middle class families. But the demand still remains limited to metros and tier 1 cities.

Read this: Farm to fork: This millennial urban farmer grows vegetables on carpark rooftops in Singapore

Even though the hydroponics startups are experiencing increased demand, investors remain skeptical of the potential of hydroponics produce in the market. For consumers, as long as the produce is organic and the price is at par with other available options, it doesn’t matter whether it is grown in a hydroponics set-up or in any other way.

“Hydroponics is more expensive [than greenhouse and net-house farming], and mostly for the production of raw greens, exotic vegetables, and super-premium berries,” said Mark Kahn, Managing Partner at Omnivore, an agritech focused venture capital firm. Earlier this year, Omnivore participated in agritech startup Clover’s USD 5.5 million Series A round. Clover sells hydroponically grown fresh produce.

“We think there is a market for hydroponics produce in India, but it will remain a niche segment within CEA [Controlled Environment Agriculture],” he added.

According to Kahn, there are two major hurdles for the hydroponics segment–lack of consumer demand and high cost of infrastructure.

“…identifying the target segment and building demand will require significant downstream investment and large marketing budgets. As for the latter [hurdle], hopefully, hydroponics startups in India can find ways to lower set-up costs and make units more modular,” he said.

However, he adds that Omnivore remains “excited” about hydroponics and will continue to explore investment opportunities in the sector.

Although Omnivore has a cautiously optimistic outlook of the hydroponics market, both Barton Breeze and Acqua Farms reported increased investor interest since the start of the pandemic. “We were definitely in touch with a couple of investors [before] but after COVID, every week there’s a new investor interested in us,” Singh said.

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