AeroFarms Sustainability and Profitability: A Path to Future Crop Cultivation

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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.

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

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

preferred solution 3

key issues 4

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

analysis 6

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

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

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

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

opportunities 11

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

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

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

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

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

preferred solution 17

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

implementation 19

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

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

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

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

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

key success factors 25

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

risks & mitigation 27

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