Canadian vertical farming startup Adapt AgTech is partnering with Reef Technology to bring its mushroom-growing shipping containers to major cities across the United States, starting with Austin.
Reef transforms urban real estate like parking lots into mobility and logistical hubs and currently operates over 8,000 locations across hundreds of cities. The partnership will help Adapt place its shipping containers steps away from such customers as restaurants and grocery stores, without having to pay the astronomical rent of a commercial or industrial space in a downtown area.
Adapt opened its first shipping container in Austin and began deliveries to restaurants this week. Over the course of the next few years, the startup plans to expand to over 50 locations, including Boston, Chicago, San Francisco, Seattle and Miami.
“Our model is to create hyper-local farms in densely populated urban areas to reduce the distance from farm to fork,” Jonathan Murray, Adapt AgTech’s CEO and founder, told TechCrunch.
Adapt’s network of shipping container farms specializes in “aberrant gourmet mushrooms,” which are gourmet mushrooms that haven’t been available in North American retail until very recently. Think pink, yellow, blue and king oysters, chestnut mushrooms, and the trending lion’s mane.
“Mushrooms cater very, very well to container farming versus other crops like leafy greens because of the energy consumption,” continued Murray. “They don’t require a tremendous amount of light. It’s really just temperature and humidity.”
Adapt, which launched in February 2022, delivered its first farm in June last year to a location in Toronto. The company has been growing ever since and now has farms in Ottawa, Vancouver, Halifax, Kingston and Austin. On February 17, Adapt says it will launch a partnership with Loblaws — Canada’s largest retailer — starting with two flagship stores in downtown Toronto, and then dozens more in Toronto and Ottawa before expanding elsewhere over the following months.
Adapt will also roll out with retail banners under Canadian grocery chains Sobeys and Pattison Food Group in 2023.
“By the end of 2023 we’ll be available in stores of at least three of the top five largest retailers in Canada from Halifax to Vancouver and in between, which combined represent over 3,500 stores,” said Murray.
Adapt recently closed a seed round with climate VC Congruence, and it will use the funds to expand its base and hire more support.
Sustainable fruiting, cheaper mushrooms
Adapt AgTech designs and manufactures its shipping containers in Delta, British Columbia. Aside from the five containers operating today, Adapt recently started production on 16 more units and is aiming to deploy over 25 units over the next 12 months. Some of Adapt’s shipping containers are solar-powered with backup plugs, but for the purposes of a speedy U.S. launch, the startup will plug its shipping containers into the grid. The energy consumption, Murray said, is low — about 10 kilowatt hours per day.
The company’s distribution model is akin to a hub and spoke. Adapt uses a centralized hub in Kingston, Ontario, to do all of the lab work and colonize the substrate blocks — meaning it allows the mycelium, the root structure of the fungus, to grow on blocks of sawdust, spent coffee grounds or coconut coir. The startup then sends out the blocks to shipping containers, where the mushrooms can fruit close to customers. Murray says this allows Adapt to deliver mushrooms within a couple of hours of harvest, which not only means fresher fungi, but also longer-lasting mushrooms and reduced spoilage.
The startup deploys and operates the containers and also fulfills orders. An operator oversees everything from harvesting to managing orders to delivering mushrooms.
“All of our containers are currently operating essentially on one full-time farmer, so we’re enabling them to become what we like to call ‘farmtrepreneurs,’” said Murray. “So uncapped commissions, grow your territory as big as you can. We’ll add containers, we’ll grow your territories. This allows us to bring new and young people into farming as well, which is exciting.”
Murray also noted that existing mushroom farm operators have reached out to Adapt to flip their at-home businesses into Adapt farms.
The whole process allows the startup to stay vertically integrated, and thus save money on materials like substrate, which Adapt makes itself out of whatever is locally available. Adapt’s control over each farm also lets the company keep tabs on well-fruiting mushroom strains and propagate more of them, delivering even healthier margins to the company and a high-quality product that’s cheaper than what you’d get at the farmer’s market, said Murray.