It shouldn't come as much of a surprise that the Twin Cities, and the state of Minnesota overall, would be a focal point of innovation and startup funds for agricultural and food-related enterprises. After all, both are well within local tradition and culture, and the Midwest is all about farming and food. But somehow, until relatively recently, what is now termed "Ag-tech" hasn't gained a lot of traction with business investors. Likewise, commercial real estate investment has traditionally not included much in the way of agriculture. Farming, no matter how it's performed, is often deemed risky business. Agriculture is still sometimes viewed as "not business," and the thought of modernizing with anything other than sweat and hard labor has been long in coming.
But that's all changing. The perception is well on its way to disappearing in some areas, with alternative urban farming methods springing up all across the globe. Aquaculture, hydroponics, aeroponics, aquaponics and high-rise soil-free farms are sometimes hailed as the latest revolution, touted as the food production model that will save the world's population from starvation.
Ag-Tech Investment "Healthy"
Recent studies have shown that ag-tech investment is growing at a steady pace—everything from funding for drone companies to manufacturing of the specialty grow-lights that make high-rise "ponics" growing viable. In addition, investment capital for urban farms is no longer an impossible dream. Continental Grain Co. (CGC) is a major player. Chris Abbot, as co-leader of CGC's venture capital arm, is bullish on the Midwest as the hub for innovation in food and agriculture, noting that South Carolina and San Francisco are also extremely active markets.
Abbot believes that universities are key components that will fuel the growth, noting that positive "cross-pollitation" occurs between academic and business communities. The University of Minnesota, with its distinct Minneapolis and St. Paul campuses, can be at the forefront of local growth efforts, he believes, just as the University of Iowa in Ames has been successful in combining "domain expertise and university talent."
However, Abbot also believes that Minnesota must scale up its efforts in order to retain a location advantage. He cautions that if current momentum isn't sustained, the local market risks being displaced.
Urban Aquaponics, an ambitious aquaponics startup venture that began operations in a 9,000 square-foot space at St. Paul's former Hamm's Brewery five years ago, ceased operations this year when it lost the financial backing of corporate giant Pentair. It was hailed as one of the most "up-to-date aquaponics facilities in the world" by its founders when it began operations in 2014.
It closed in May, after expanding into 87,000 feet of space at the Schmidt Brewery complex. The Pentair announcement simply said that the aquaponics farm did not live up to its expectations. Pentair, at last report, still holds title to the property, although no plans have yet been announced for a new use.
That is just one failure that resulted in the loss of only 27 jobs, but it created a buzz in the investment sector, affected the rejuvenation of a significant real estate transformation, and also impacted the future of alternative farming. Similar urban farms have also closed in recent years in cities like Milwaukee and Dallas. Universities and even high schools, however, continue to point to sustainable farming and soil-less growing as the solution to providing food for the world into the next century.