AeroFarms Sustainability and Profitability: A Path to Future Crop Cultivation

AeroFarms aims to revolutionize crop cultivation by developing vertical farms that are both sustainable and profitable. The company is strategically addressing key issues such as funding, consumer knowledge, and environmental impact while expanding its market presence domestically and internationally. By focusing on stakeholder analysis and location strategies, AeroFarms is paving the way for a successful future in sustainable agriculture.

• AeroFarms
• Sustainability
• Profitability
• Vertical Farming
• Sustainable Agriculture

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1. AeroFarms: Presented to: Presented by: DeGroote Consulting, McMaster University Annette Szeliga, Nicole Verni, Stephanie Ebreo, Alex Beran 1

2. How can AeroFarms make vertical farms the future of crop cultivation while ensuring sustainability and profitability of its business model? 2

3. preferred solution 3

4. key issues 4

5. key issues U - importance + Funding Venture capital (Nationalistic Legislation) Grants 1 - urgency + 2 1 Consumer knowledge Organic perception Brand awareness 2 3 Environment & crops Nutrient dense grains CO2 emissions, LED lighting 3 appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 5

6. analysis 6

7. aerospace market analysis In U.S. millions 280 50 Captured market Market opportunity Aerospace US market (2019*) Revenue (2019) appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 7

8. location analysis CURRENT FUTURE Nine locations 7 in the USA 1 in China 1 in Saudi Arabia US Expansion Camden, New Jersey Southern New Jersey Buffalo, New York Headquarters in Newark, New Jersey 69,000 sq. ft. warehouse International Expansion Target: 25 farms by 2022 appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 8

9. stakeholder analysis Consumers Retailers Individuals Funding Partnerships (Airlines) AeroFarm Government Venture capital POWER Internal resources (Human capital) INTEREST appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 9

10. analysis appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 10

11. opportunities 11

12. opportunities 1 Product diversification 2 Relocating of farming operations 3 Community involvement & growth appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 12

13. product diversification pivot & broaden to include grains and other vegetables in product portfolio, expand crop varieties benefits key issue tracker Expand product offering Potential to solve world hunger Cater to large consumer base Leverage data capabilities X Funding ? Consumer knowledge considerations Capital intensive No access to additional funding opportunities Does not directly address consumers Potential to increase environmental impact Human capital expertise and resources Environment & crops appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 13

14. relocating of farming operations keep current locations in urban centers, expand to rural areas to grow more crops benefits key issue tracker Urban centers as distribution hubs Reduced infrastructure/building cost Potential expansion of product offering X Funding X Consumer knowledge considerations Logistics & transportation of produce and food products, freshness Lack funding strategy Environment & crops appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 14

15. community involvement & growth set up pilots in community areas and a subsidiary OpCo in China benefits key issue tracker Community involvements & sustainability Leverage OpCo in China for funding Less capital intensive Educational grants across the USA Funding Consumer knowledge considerations Human capital & infrastructure for expansion Logistics for pilot farms Community partnerships Allocation of funding for operation Environment & crops appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 15

16. decision matrix product diversification community involvement & growth relocating of farming operations key issue weight Funding 0.4 1 5 1 Consumer Knowledge 0.4 3 4 2 Environment & crops 0.2 4 4 4 TOTAL 1.0 2.4 4.4 2 1 5 low high appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 16

17. preferred solution 17

18. preferred solution 0 years 1 year 6 months 2 years+ Community pilot farms Funding & designation China subsidiary Additional renewable energy & crop varieties appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 18

19. implementation 19

20. timeline: 0 -12 months F.E.E.D. Foster communities. Establish. Expand. Diversify. ACTION OWNER (7) KEY ISSUE TRACKER ADDITIONAL PILOTS (13) CURRENT LOCATION PILOTS Funding 1 Establish community partnerships near current locations Marc Oshima & marketing team COMMUNITY PILOT FARM Infrastructure & tech HR & human capital Operations 2 Pilot logistics Consumer knowledge 3 Marc Oshima & marketing team Youth & student AI, Iot education School field trips Education programs & materials FARMING & EDUCATION TECH EDUCATION BRAND & PRODUCT AWARENESS Involvement in growing own food Environment & crops Rec programs for community members Roll out pilot locations 7 near current (0-3 months) 13 additional (3-12 months) 4 Operations appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 20

21. F.E.E.D. Foster communities. Establish. Expand. Diversify. timeline: 6 months 2 years ACTION OWNER KEY ISSUE TRACKER Funding 1 Explore and apply for government grants (wellness, community) CFO & Finance team Consumer knowledge 2 Research and apply for certifications (i.e. Pesticide free) ED Harwood Chief Science Officer Environment & crops appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 21

22. F.E.E.D. Foster communities. Establish. Expand. Diversify. timeline: 6 months 2 years ACTION OWNER KEY ISSUE TRACKER Funding 1 Convert China location into Chinese subsidiary CEO, CFO Consumer knowledge 2 Apply for Chinese grants CFO & Finance team (China subsidiary) Environment & crops 3 Monitor trade legislations & consider Saudi Arabia for additional subsidiary CEO, CFO appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 22

23. F.E.E.D. Foster communities. Establish. Expand. Diversify. timeline: 6 months 2 years ACTION OWNER KEY ISSUE TRACKER Funding 1 R&D into solar wind energy Ed Harwood, CEO CFO Consumer knowledge 2 R&D into grain and protein rich foods crop cultivation Ed Harwood, Chief Science Officer Environment & crops appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 23

24. F.E.E.D. financial projections appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 24

25. key success factors 25

26. key success factors FACTOR Community engagement & stimulate demand TARGET 16 new locations TIMELINE 2022 Certifications Acquire pesticide free and other designations 1 year Additional funding secured $150 M 2020 appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 26

27. risks & mitigation 27

28. risks & mitigation risk trigger Unable to set up farm pilots likelihood impact mitigation plan Communities unwilling to partner Outreach in subsequent communities Medium Low No capital received from applications Focus on generating revenues from community farms, IPO in the future Unable to secure state funding Low/ Medium High Countries take firm stance opposing vertical farming Political legislation barriers regarding vertical farming Focus on countries with pro vertical farming legislation Medium Medium appendices risks & mitigation preferred solution implementation analysis key success factors key issues opportunities 28

29. Safe slide 29

30. appendices 30

31. financials analysis appendices 31

32. Implementation costs analysis appendices 32