-Next on "Start Up," we head to Charleston, South Carolina, to meet up with Andrew Hare and Matt Daniels, the founders of Vertical Roots, a company that's grown into the largest hydroponic container farm in the U.S. All this and more is next on "Start Up."

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♪♪ ♪♪ ♪♪ -My name is Gary Bredow.

I'm a documentary filmmaker and an entrepreneur.

As the country focuses on recovery, small-business owners everywhere are still fighting to keep their dream alive.

So we set out to talk to a wide range of diverse business owners to better understand how they've learned to adapt, innovate, and even completely reinvent themselves in this ever-changing world.

♪♪ This is "Start Up."

♪♪ ♪♪ Hydroponics is a type of horticulture which involves growing plants without soil by using mineral nutrient solutions in an aqueous solvent.

Terrestrial plants may grow with their roots exposed to the nutrious liquid or, in addition, the roots may be physically supported by an inert medium such as perlite or gravel.

Today I'm heading to Charleston, South Carolina, to meet up with Andrew Hare and Matt Daniels, the founders of Vertical Roots, a company that's grown into the largest hydroponic container farm in the U.S.

But from what I've heard, it wasn't long ago that Matt grew his first head of lettuce in a tiny apartment closet.

♪♪ Mission statement.

What is Vertical Roots'?

-Vertical Roots is an indoor, controlled-ag hydroponic farm, and the mission is to revolutionize the way communities grow, distribute, and consume food.

-When did the idea for Vertical Roots come up?

-Matt Daniels, who's the co-founder of Vertical Roots with me, is a good buddy.

We actually grew up together in Hilton Head.

Were not close friends at the time but both reconnected in, I guess, around 2013 in Charleston.

And about probably 2014, I think I was at his house, and he had some lights in his closet, and, you know, your mind immediately goes to someone's growing some kind of cannabis in their closet, and you open it up, and Matt actually had basil plants and some little pepper plants growing in this little homemade hydroponic system, and I was really fascinated by that.

That grew into us having, like, a little hobby -- backyard hobby farm with peppers.

And we always kind of joked that if we could make a business out of it, we would.

We were actually able to build a small system in a friend's garage, basically, a mechanic shop.

Matt built every light, did everything we could to build a little system just to kind of start testing out what it could be, and that's kind of how we got started back six, seven years ago.

-What is hydroponics?

-So, hydroponics is the process of growing plants in water.

So free of soil, meaning that, you know, you use an inert media, basically made with coconut husk or with peat moss, and they're molded to fit the channels and fit everything else in the systems, all of our trays and stuff like that.

So you take -- You know, you take your seed, put it in there.

It needs water and light.

Once it sprouts, it needs a little bit of nutrients.

So the three -- The big three you handle, and then the plant develops in the water.

-Now, does that speed up the growth cycle?

Does it make it much more fast and efficient?

-It's -- It's way faster.

-Really?

Okay.

-So, yeah, in the order of like -- We basically cut -- In some cases, we're cutting a traditional crop cycle in half.

-In half.

-Yeah.

Some of that is, you know -- They grow -- Like, big Romaine.

You know, they've got these monstrous, like 1-1/2-pound heads of Romaine.

So, that takes one hundred and however many days it takes, whereas we shoot for like, you know, the 8-ounce.

More of a -- Easier to manage.

Still fits in the system.

Still a nice big plant.

But it's not -- we're not trying to go and get like tons of weight out of it.

-Tell me about how this, you know, sort of personal interest of yours turns into a business.

-I became pretty passionate about just growing in general and was very interested in hydroponics just from the standpoint of not having to go outside and use up soil and natural resources, that kind of thing, because, you know, in general -- traditional ag, the plants only see a very small portion of the water that they're given, so it's -- I mean, in the end, it's -- it's a little wasteful for when you're -- when you're trying to grow something.

So this, you know -- -And the mass amounts of water used to irrigate, yeah.

-Yeah, and so the -- Just that by itself, just the more of a sustainable way of growing a plant, you know, using the same amount of water or very close to the same amount of water for an entire growth cycle was something that appealed to me because, you know, it's much -- it's much less, like, just intensive to than what you would get in the field.

So you're going out and you're relying on Mother Nature and relying on the weather... -It's not sustainable.

A lot of guesswork.

-Right.

Yeah.

And which is -- It's tough.

And, I mean, I can't imagine, you know, what real general -- traditional-ag people go through.

-Was it a success your first go-around?

-No.

No.

-Dismal failure?

-It was pretty bad.

I had no concept of pH and what it meant for the plant and that kind of thing.

So it turns out when you don't -- you don't fix things as they happen, the plants just deteriorate, and then you can't figure out why they grow, so...

Learned a few lessons pretty quick.

-You did the experiment in the garage.

When did it click that this is a business?

And what was the first step?

-I really wanted to get out of my 9-to-5 job, and Matt was also in a place where he was wanting some change in his career.

And we were fortunate enough to meet Don Taylor, who's our CEO of our parent company -- and his daughter, Stefanie -- and that's AmplifiedAg Inc.

They're the ones that are driving the software and the hardware piece that actually operate the farms.

Then you got the manufacturing side of the company, as well, that's taking this decommissioned shipping container, you know, putting food-grade paint and floors and air-conditioning units and all those pieces, and then plugging in all that software technology.

So we met, and that evolved a couple months later into operating the first container that they were building.

And that one container turned into two, then three, then four.

And before you know it, over about six months, we had a small little business.

I really couldn't keep up with it as a side thing anymore.

And so Matt and I and Don sat down and we decided, look, this is something we really want to go after.

We think there's some opportunity.

He felt the same way, felt like it could really be the kind of proof of concept to have Vertical Roots, you know, using the technology, using these farms, and showing that it could work, that it is a viable business.

And so basically from 2016 to 2017, that evolution kind of happened there where we were just -- we were the guinea pig, if you will, on one of these shipping containers.

And by the fall of 2017, we were selling to a local school district, we had six containers.

Matt and I were full-time with Vertical Roots, and it kind of took off from there.

-Explain in layman's terms AmplifiedAg.

-We've built a software platform from the ground up, basically an operating system to control indoor farms.

We have a suite of electronics that we've built ourselves.

So that, coupled with the software platform, allows us to operate the farms, and then AmplifiedAg also manufacturers the farms themselves.

So we have a holistic farm platform...

Interesting.

-...that Vertical Roots then operates.

-So the whole farm is controlled by the software.

The lighting, the irrigation, the air, everything?

-That's correct, yeah.

So, we have built... -Wow.

-...our own lights, our own irrigation systems.

Anything that's going on inside of the farm, the software is controlling.

So we're controlling how much nutrients go into the main nutrient tanks.

We control the intensity of the lights.

We control how much air flow comes in and out through the HVAC systems.

We also have sensors to give the farmers alerts, so if the temperature starts to get too high, they'll get a text message.

The objective is to get the yield and the performance of the farm as high as possible for the farm owner.

-Sure.

Can you talk a little bit about shipping containers?

Like, what -- what do they cost?

You buy them used, new?

Like... -Yeah, so, we use decommissioned reefer units, and these are 40-foot by 8-foot containers that are insulated.

They've been around the world a hundred times, and they're now in a scrap yard rusting somewhere.

-Okay.

-So from a sustainability perspective, we're creating square footage to grow indoors without... -Creating new things and more resources.

-Right.

Exactly.

So that's part of the deal with them.

-Great.

-Another part of it is the ability to get as close to the point of consumption as possible.

So we don't have to build a building.

We can go in, and we can put these in a parking lot at a distribution center.

That's a huge advantage.

Segmentation, from a food-safety and catastrophic failure perspective in a facility.

Being able to segment them at that size really protects the overall site.

-Versus losing 50,000 square feet... -Right.

-...you're losing, what, 300 square feet?

-Exactly.

-Okay.

Smart.

-So that's another driver behind it.

And then the capital, it is -- it's a lot cheaper.

I mean, the -- -What do they cost?

-$5,000.

-Okay.

For one in good shape.

-That's been cleaned up, and we have some work done to them.

So, yeah.

It's a -- When you look at the -- the actual square footage of the cubic foot to grow inside of, they're very economical.

-What generated your interest in this, I guess, in the very beginning?

-The very beginning, I had a couple of different interests.

I had spent a lot of time in India and became very acutely aware of the crisis that India is having with their farmers and their ability to be able to grow food.

They don't have dirt to grow in.

The climate, changing climates continuing to make it harder and harder for them to be successful, so they've just gotten to the point where they're not able to grow enough food to feed themselves.

When I came back to the United States and started looking at -- There's a very similar problem that's evolving over time.

-Of course.

-And we see farmer bankruptcies continuing to go up.

We are seeing, you know, climate change having tremendous impacts in a lot of the farming communities in the United States, so I really got centered on the -- We've got to figure out a better way or a different way or an alternative method to feed ourselves.

And that's what really got me going down the path of controlled agriculture.

-What was the business relationship like with yourself and Andrew and Matt?

Did it come in and make sense as, like, a full-on equity partnership?

Were you just an investor?

Like, how did it work?

-Initially, what we did was we allowed them to operate a few of our containers.

Once we all came to the collective conclusion there was a massive business opportunity, as well as an opportunity to help make a positive dent in the world... -Yeah.

Do good and do well.

-Exactly.

We invested in their company, and they joined the company.

-Got it.

-So they really became the operating arm of the farming operation, while then AmplifiedAg is focused on building and ultimately selling the technology to other farmers.

♪♪ -I was able to walk through a couple of the grow containers, and it was absolutely fascinating.

The bright LED lights, vivid green plants all growing perfectly in sync.

It was futuristic and like nothing I had ever seen before.

♪♪ ♪♪ As director of operations, what exactly do you do?

-So, as the director of operations, I'm really responsible for everything that goes into building a product that goes out to our customer.

So receiving any of the materials into the farm where we actually do the growing process... -Yeah.

-...and the harvesting.

And then where it goes out to processing and packaging and then on a truck out to our customers.

-Wow.

Everything.

-Everything.

-[ Laughs ] You do everything.

You are the glue that binds.

-Yes.

-What was it that really made you say, "I'm gonna dive in full force into this company"?

-Sitting with Andrew and Don and hearing their story about how they came together, about where it started, and really what the vision was... -Yeah.

--...is what drew me in, right?

I just felt that I could become a part of this vision... -Yeah.

-...and see this through and truly be a part of a change in the world.

-Could this be implemented into just about any community?

Could this be a community garden?

Like, what are all the applications for this?

-We're starting here with the upcycled shipping containers.

The benefit of the upcycled shipping containers is we can move them anywhere.

-Exactly.

-All we need is a little water, a little bit of electric, and we're golden at that point.

So we don't need huge infrastructure.

You could put these in the desert.

You could put them -- -That's how I was thinking.

Yeah.

-You could put them at the beach, wherever that need for food is.

And we believe that it goes so far beyond just the leafy greens, too.

-Of course.

Yeah.

-You know, and we're in a -- in the process of proving that out.

♪♪ -What were some of the initial challenges that you had to overcome with growing?

-Yeah, well, even step one is, what do you grow?

Right?

-Right, right.

-So one of the first things we did was met with the local food hub, and that's obviously a tough question to answer.

But what we saw was lettuce.

One, was kind of conducive to that indoor environment.

It made a lot of sense in the way that Matt was trying to develop our system.

And a lot of people don't know that leafy greens, lettuce in particular, is a cooler-weather crop.

It doesn't do well in high heat.

Doesn't do well in humidity.

95% of it is grown in California and Yuma, Arizona.

So it made a lot of sense, living in the southeast -- high heat, high humidity.

Well, if we can grow a crop indoors that you can't traditionally grow outdoors, as well...

Seemed like a natural fit.

And so that was kind of where our starting point was, was to look at lettuce, look at herbs, things that we feel would grow well in our system but also be a good supplement addition to the local community and agriculture.

-The further food has to travel, I guess, the less the -- Does the flavor start to go?

It changes flavor, right?

-It does.

Yeah.

Absolutely.

-The longer it sits?

-Yeah, so, I mean, lettuce is a good example of that.

As soon as you harvest that head of lettuce and you ship it across the country, every day, every hour, basically, that that plant has been out of the ground or out of a system growing, you're losing that nutritional profile.

You're also starting to lose some of that flavor profile as that quality and that freshness start to dissipate.

Right now Vertical Roots, we're servicing 12-plus states and growing.

I think actually as of this conversation, we're in two more states.

So kind of have gone through the whole Southeast now.

Just fired up a new location in Atlanta, Georgia.

Coming to Florida soon.

So our focus has really been just trying to be in the Southeast, being close, you know, to that consumer, that end user of our product.

-Sure.

-So we're working with all the local retail chains.

Obviously, Publix, we were in today, is a big partner of ours.

In almost 500 stores of theirs.

-You're in 500 stores?

-Of Publix.

Yeah.

Total grocery stores, I think we're approaching 1,700 in the Southeast.

-Wow.

-So starting to get a little bit bigger than just the Charleston community, it feels surreal seeing so many pallets of our product.

It used to be Matt and I and a little tiny van loading up a couple boxes.

So now, in a couple years, to see an 18-wheeler pull into our facility and load 25 pallets and, you know, 10,000 cases going out each week is a much different state than we were a couple years ago.

♪♪ ♪♪ ♪♪ -Tell me the story about how you were first introduced to or met Vertical Roots.

-Yeah, that was back in 2019.

We were at a trade show.

At that particular show, we actually met Andrew and the Vertical Roots team.

-Okay.

-We took the time with them.

We listened to what they had to say about their program, what they were doing right here in Charleston, and we were very excited of what we hear, so we decided to take a trip over there, and the rest is history.

We became a partner right after that visit.

-What differentiated them?

-It was their commitment to growing safe, sustainable foods.

Mm-hmm.

-And how they were doing it was simply remarkable, to be able to take a refurbished cargo container and transforming that into a fully functional farm that you can actually now bring the farm to us, bring it right here in Charleston.

-Yeah.

-So that was amazing to us.

♪♪ -I wanted to talk about your first big contracts and how did that feel.

Were there any moments of apprehension like, "Oh, my gosh, how are we gonna fill these orders," stuff like that?

-Absolutely.

So, I mean, of course, you know, I've spent a lot of time in sales over the years.

And typically it's "say yes and figure it out after" kind of mentality if you want to grow a business.

You can't always have it perfect.

But nothing really was just a big contract out the gate.

We really had to build relationships and start small.

-Mm-hmm.

-And so, you know, Publix, we started with just a local program in our local market, and we grew that to 50 stores, then to 100 stores and, like I said, present day, 500.

Every one of our partners and our customers has that same kind of story.

-And that's very smart, that sort of slow growth that you were in control of.

A lot of people out there, that's the biggest issue, is scaling.

Do you have any advice for folks out there that are sort of hitting that wall where they know they need to scale but don't really know how to do it?

-I would definitely say, you know, you have to be as thoughtful as you can, do as much due diligence as you can, but at the same time, you just got to jump in and do it.

You have to acknowledge that you're going to make mistakes.

You're going to fumble.

I think the biggest thing that's allowed us to make those mistakes and fumble is the transparency and communication to our customers.

We really try to stay in front of that as much as possible, if there's gonna be an issue.

You're going to have struggles.

You're going to fall at times.

So, you know, my recommendation, my piece of advice to people is put that aside.

99% of things, you know, you worry about, think are gonna happen, don't happen.

And you just have to jump into it and do the best you can and try to cover as many things as you possibly can figure out and know that you're gonna run into more challenges.

And that's okay.

It's part of the process.

And you got to embrace that process.

-Since this is in a controlled environment, do you have to use pesticides in any way?

-No.

No.

-You don't?

-No.

-Good for you.

-No, we don't have to use pesticides.

Nothing ever gets sprayed on the plants.

Nobody physically ever touches the plants with their hands.

And we have the highest level of food-safety certifications, and we take that stuff very, very seriously.

So the use of pesticides is just something that we have always wanted to steer away from because we recycle so quickly and the whole place gets completely sterilized in between cycles.

So it's like we don't really -- There's never really a risk of any crazy outbreak.

-You're close to full automation, it seems.

You're getting there.

-Yeah, yeah.

We're definitely -- We're definitely getting there.

Our software does all of the -- all the process from seed to sale, basically.

-Yeah.

-And also it controls the environment.

We transplant and harvest by hand.

That's one of the places that we're looking to mechanically automate in the future.

We have some pretty fast farmers, and it takes sometimes only 30 minutes for people to transplant an entire pod with 3,800 plants in it, so, I mean, it moves quickly.

-Gosh.

Yeah.

-And the harvesting is just a little bit longer.

You know, they're trying to take care with the plant as they harvest it so it's not getting damaged.

So those two processes are pretty labor-intensive in terms of just -- You physically need the people today.

-Sure.

How far can this go when you're putting it into a controlled environment?

-As far as you want to take it.

I mean, you could grow avocados if you really wanted to.

You know, you just need a big space to do it in and a ton of lights.

-Could you grow tropical fruits and stuff like that?

-Sure.

Yeah.

I mean, like, literally, the sky -- You can grow anything, basically, hydroponically in a controlled environment.

Or most things, I should say.

It's a different situation where you're not worried about a retail environment or selling to customers if you're doing it just for the purpose of growing something or, like, research.

Yeah, you can grow whatever you want.

We could.

So... We're doing trials with strawberries, soybeans, like, you name it.

-Talk about your partnership, because you had -- you were -- You had a friendship relationship prior to starting the business, right?

-I've been fortunate personally to be able to separate work from personal life.

Matt and I can have a very tough conversation at work and still leave work and go have a beer together or go spend time together... -That's good.

-...and shut it off, right?

I can say, to this day, you know, four and a half years in, we've never had some big blowout where he and I couldn't come to a resolution or wouldn't want to hang out with each other.

And, you know, I'm optimistic and hopeful that will continue for years to come, and I think we're proving that we can do that and that friends can take on a very challenging business endeavor and still have a lot of fun and be -- you know, finding success along the way.

-What are some of the, I guess, emotional or psychological challenges that entrepreneurs face or you face with this?

It's not an easy path to take.

-It's an emotional roller coaster.

You know, I can sit here today and say, despite all of the kind of kicks in the teeth, I get up and I get excited every day to come to work.

And it's always something new.

Kind of the running joke here is the only consistent thing is change, because you're always trying to learn and get better at what you're doing.

You don't have a blueprint to follow.

It's a mind game, for sure.

-It is.

-And it's tough.

You really have to constantly tell yourself why you're doing this.

And I think the "why" is most important.

-Of course.

-If you don't -- If you're having to create value and you don't believe in what you're doing, it's much more difficult.

-It's harder to sell.

It's harder to believe in.

It's hard to get up every day.

It's easy to quit.

-Yep.

It is.

But this is something, from day one to now, I believe in what we're doing.

I think we're gonna really -- We're on a path to change the way the world feeds itself.

I think we're gonna be able to have a lot of success come out of that as a business while being able to employ a lot of people and provide income and jobs for people, to provide better food to people.

When you put all that together, that's the "why" for me.

It's, you know, doing something that can really be impactful in the community.

Be able to make money while doing that, that, to me, is the win-win.

And that's what I remind myself every day, is I have people that are counting on us as a team, counting on me to make sure that I don't give up, that I keep pushing through, and so that's -- that's what drives me.

-As climate continues to change, the impacts are growing more and more frequent and severe.

Farming in the U.S. has become increasingly challenging.

The combination of warmer temperatures and an already vulnerable industrial system is a perfect storm that threatens farmers' livelihoods and our food supply as we know it.

Vertical Roots' ability to grow food in a controlled environment, free from the elements and harmful pesticides, could be one of the answers to a very complex question.

We are a highly populated nation of people with a voracious demand for what we want when we want it.

And although the food supply should be a concern, many of us take it for granted.

We walk into a store and expect certain things to be there.

But if the pandemic taught us anything, I would hope that it's the recognition that we are operating on a very fragile system of supply and demand.

And if ignored, we could be facing a food-shortage crisis of epic proportions.

Vertical Roots wants to put container farms in every community around the U.S., growing safe and predictable produce on a mass scale.

And I have to tell ya -- they're well on their way to accomplishing this unimaginable goal.

To learn more, visit our website and search episodes for Vertical Roots.

♪♪ Next time on "Start Up," we head to Burgaw, North Carolina, to meet up with Amanda Jacobs, the founder of Sea Love Sea Salt Company, a company that makes solar-evaporated sea salt hand-harvested from the ocean waters of Wrightsville Beach, North Carolina.

Be sure to join us next time on "Start Up."

♪♪ Would you like to learn more about the show or maybe nominate a business?

Visit our website at startup-usa.com and connect with us on social media.

♪♪ -♪ We got a long road ahead of us ♪ ♪ A long road ahead of us ♪ Got a long road ahead of us ♪ Before we pay our dues ♪ We got a long road ahead of us ♪ ♪ A long road ahead of us ♪ A long road ahead of us ♪ Before we pay our dues -...to this, as well.

-Is anything in it?

-Nope.

-[ Laughs ] You... -[ Laughs ] -Was he trying to do that?

And I fell for it.

♪♪ ♪♪ -Spectrum Business partners with small business across the country to help them achieve their goals.

With high-speed Internet, phone, TV, and mobile services, Spectrum Business provides the tools to keep you connected with your customers.

Spectrum Business.

No nonsense, just business.

♪♪ ♪♪ -Vistaprint, a proud sponsor of "Start Up" and small businesses everywhere.