Dan Ovadya is the co founder and CEO of FloraGen, an AgTech company based in Davis, California. He’s been involved in controlled environment agriculture for over 33 years, and now applies his expertise by offering Elite Genetics, Seed Manufacturing Technology and Advisory Services to CEA growers in all areas ranging from cannabis to strawberry and leafy greens.
In this in depth conversation, Dan shares about the misunderstood importance of genetics, the dangers of letting CEA be driven by investors and technologists who lack horticultural experience, and the importance of questioning everything.
Hi Dan, welcome! To start, tell me about your company FloraGen and the role that you play in the industry. What would you like CEA farmers to know about the way that you can support their success directly or indirectly?
I began growing with hydroponics when I was 19. I grew for 20 years, then spent the last 13 focused purely on R&D. I’ve worked on genetics, breeding, precision horticulture, and pushing plant biology to help breeding pipelines and product development.
Reflecting my personal experience in both areas, FloraGen really has two sides. We have an advisory side where we are helping companies all over the world with controlled environment research and development. A lot of it has to do with breeding and accelerated breeding. And then we have a greenhouse side, where we perform high resolution climate analysis to ensure a greenhouse is going to be optimized for crop requirements depending on the environment – no matter where in the world it is.
And so we love helping companies who’ve made investments in Controlled Environment to optimize their facilities and get the most return out of that investment in terms of breeding, new product development, new vegetable development, et cetera. So whether it’s low tech, mid tech or high tech greenhouses, or even indoor farms, we work in all those formats.
If a company already has strong fundamentals, then we help them understand how to take that next step into innovation. We’re filling a need in the industry where you have these greenhouse groups that do a little bit of climate diligence, but not the level that we’re doing, because we also bring that crop biology side.
For a lot of growers, especially with smaller operations, it’s easy to think: “Okay, I want to grow basil, so I’m just going to buy seeds online or from a local distributor. I don’t really need to get too invested in breeding or genetics.” What do you think about that? Do people only need to worry about genetics if they’re growing at a really large scale?
I work with a ton of smaller farms that don’t have huge venture capital behind them, and I still think it’s essential that even the smallest CEA farm understands the importance of genetics.
People can adapt to growing a particular variety in their system and work hard on controlling environmental variables to get the best out of a singular variety. It’s possible. However, I encourage even the smallest CEA farms to think openly about genetics and to consider running several varieties when they can.
We know it takes time and money, but a small trial in your commercial production system is essential. Whether it’s cannabis or lettuce or strawberry, even small farms should get a hold of three to five genetics and trial those in your system. You will likely see dramatic differences in performance and you will come to some conclusions that can greatly improve your bottom line, your productivity, and most importantly, reduce your stress levels.
Finally, I’ll say this about seed companies because I worked with them for over 30 years. Two things are true: There’s a ton of hype in the seed industry and there’s also a lot of junk seed out there.Seeds are highly competitive, and you usually get what you pay for. So on the low end, there can be false advertising or contamination, but even on the high end, you still need to test and monitor carefully so you don’t get bamboozled.
AgTech is a big industry. What led to your choice to focus on seed genetics in CEA?
I’ve seen the industry from a lot of angles over the years, but in my mind, the magic really happens when you have outstanding cultivators and CEA growers working with breeders who really truly know their environment. How much DLI are you running? What’s your plant density? What are your seasonal effects? What percentage of the time are you at your target? I love that intersection, that moment, where a grower can bring this data to the table and a breeder can say “Great. Based on that, I have 10 different genetics I want to compare.” The only way the breeder is going to believe that data is if they’re working with a talented cultivator team that can ensure the most stable potential environment and the most repeatable environment.
To get back to your last question a bit more, I think that the genetics and testing side is a little bit of a blind spot in the industry. People want to just trust the seed company and say, “give me your best.” Or they say “I’ll just go to distributor XYZ because their seeds have good reviews. I’ll try out the top option and I’m sure that’s good enough”
But what we’re trying to find is a sweet spot in that marketplace. Just because you don’t have the biggest operation, it doesn’t mean you can’t ultimately benefit by investing more on the genetics side and running trials.
So one big picture project you’re working on is attempting to draw attention to that blind spot in the industry around the need for genetic trials. Are there any other big challenges that you and your team are applying yourselves to right now?
From about 2003 until 2018, AgTech experienced seemingly nonstop expansion. There was just incredible revenue generated from biotech seeds, and it drove a lot of R&D. But now we’re in a different space. I would say we’re in about year 5 of a flatter growth phase for R&D.
Funding for CEA has decreased in R&D, but we still get a lot of phone calls. There are still people trying to manage startups with huge funding – like in the hundreds of millions of dollars – who are concerned about failure because there’s still something missing in their fundamentals.
Like that list of data points I just covered; there are huge operations that haven’t figured out how to measure that effectively. They want to open new greenhouses, but they’re asking “How much lighting do I need? How much heating? Where should I build?”
I don’t mean to demean anyone, because these are complicated and challenging questions. They’re questions that we want to dive deep via climate analysis to help answer. But I mention it simply because that is the big picture challenge we’re working to help people solve: How can we keep climate-friendly farms in business so that we can move toward net zero? It’s not impossible, but there’s a lot of situations where high-end equipment gets sold to people who don’t know how to use it. So we’re often helping people reverse-engineer their way toward efficient practices, but also, wherever we can, we’re providing guidance at a ground-floor level to ensure growers are actually set up for success.
There’s been a lot of dialogue about the big picture contraction.
As you’ve navigated these last several years and tried to push the industry on a positive course, are there any issues that people still aren’t talking about enough?
Absolutely. There’s a contingent of us in the industry – including, of course, AmHydro’s Joe Swartz – who’ve been here a long time. We love the industry. We believe it creates great jobs and great opportunities for communities. We are trying to be more and more vocal in calling out a new type of technology providers and investors that really don’t understand biology.
They don’t understand CEA. They don’t understand investment. They don’t understand timelines. And they’re the ones actually pulling all the oxygen out of the room; funding giant projects and driving a certain narrative. They can afford to buy a ton of press, but their execution and their track record has been brutal.
It’s been really tough and it has been demoralizing for a lot of people who got excited about CEA but then joined any number of groups that had really no intention of succeeding and no talent base to execute. Honestly, that’s the biggest problem. We had hundreds of millions come into the industry between 2019 and, I would say 2022, where suddenly CEA got trendy, all these big venture groups dumped money into it and said they were going to get rich.
And a lot of them were from Silicon Valley. They don’t understand how long it takes to develop a new genetic variety. It’s not like writing software. They also don’t understand biology. They don’t have fundamental respect for farming and biology and how difficult that is. It’s not just because electricity got expensive and interest rates went up. Many of these farms were set up for failure regardless, and when they failed, no lessons were learned. They blamed economic headwinds rather than their own misunderstanding.
No matter what you read on LinkedIn, artificial intelligence will not tell you how to grow plants. It will not explain the differences in biology and genetics between certain varieties. And yet you have people controlling the funding, handing it out, and making key decisions without any experience in this industry. That’s simply not a good formula and it’s obviously not working.We will continue to see more failures going forward without continued course correction.
As you mentioned, you share a similar outlook on this with Joe Swartz and the team at AmHydro. How did you get connected, and how have you worked with Joe and the team over the years?
In 2020 I wrapped up my corporate career at Bayer Crop Science based in Woodland, California. We had a big farmer event and a member of the team came down and build out a big hydroponic table to help us show off plants to visiting breeders and farmers from all around the world. I was amazed at AmHydro’s availability and level of service, as well as the quality of the equipment.
You have to understand that I started growing in 1994 in a low tech greenhouse before running a mid-tech one for twenty years. I’m very much from that school that puts a premium on mastering fundamentals. So I found a lot of synergy with AmHydro’s approach. That is, you don’t need to be the biggest or shiniest company on the block. What you need is to be outstanding in your fundamental knowledge of cultivation.
Once you have that stable base, then you can start doing innovation. But this stands in contrast to the approach I just described, where you have people who want to skip the basics and jump right into high-high tech. I have so much respect for AmHydro’s approach of teaching fundamentals and providing bulletproof equipment, while always iterating and innovating to ensure their products are compatible with the latest high-tech breakthroughs. The industry needs more of that.
If someone has a mastery of fundamentals like you, is there a temptation to mistrust innovation and say “Well, this is the way it’s worked for me. Why change?” Investors and technologists want to be seen as drivers of progress. They might write off your criticism as being born out of stubbornness or being stuck in your ways.
People can portray my perspective however they want, but it’s really just a business strategy question. For instance, the degree to which you embrace new tech should be informed by things like market conditions. Right now, the market is pretty restricted. Is that the best time to push into some new giant expansion or some new giant idea that’s going to require clients?
To make a big investment like an automation retrofit can be really challenging. You have to measure the opportunity cost. Making incremental changes is a much more cautious approach, but it can be the right approach in this current market.
I’ve worked with plenty of people who are pushing into things like automation and mind-blowing levels of climate control. Cutting edge tech can be incredible in the correct application. I’ve also seen people go down that route without realizing a return on investment. So I’m certainly not opposed to new technology, I just don’t want to see investment go to waste. You just really have to be honest, and it’s hard to be honest without considering the data and considering questions like “Is there evidence that this benefits farmers, or does it just sound good?”
In your years in the business, I’m sure you’ve grown a lot, you know, both as a person and in your expertise. Have your experiences led to any changes in opinion or outlook, regarding the industry itself, the way you do business, or your thoughts on any particular technologies?
I love that question. I work incredibly hard to undo what I have learned on occasion. It’s a real challenge. You’ve got all these people walking around saying, “I’ve got 30 years of experience,” and that is great.. However if you’re not challenging your bias and your understanding based on new experiences and new data then I think you kind of stagnate.
That’s the benefit of youth. I mean, young people come in and ask questions. “Why do we do it this way?” And then you got the old experienced guy saying, “Because we know better.” So that’s something I really try to avoid. I have to say, after I left big agriculture, I had to punch myself in the face a lot to unlearn certain things that applied only to big agriculture. Because there are small farms doing amazing things, and certain “best practices” I had learned simply did not apply to them.
Even on the biology side, if I’m not learning continuously, then I’m doing something wrong. You know I actually just changed my outlook on cannabis really recently. Cannabis has been clonally propagated for decades, but many are saying it’s on the brink of moving into seeds. I also believed this. I still absolutely believe cannabis seed can work and does in many locations, but if you consider the sheer viability and profitability of clonal propagation, I don’t see that norm changing anytime soon. I wouldn’t get overly invested in anticipating or pushing such a change.
I really appreciate your time and your thoughtfulness in all of these answers. Is there anything else that’s been on your mind? This is your last chance for a soapbox moment!
I want to say people matter in this industry. People matter a lot. It’s not just talent level and knowledge level, but it’s also the quality of people. So as more money has come in, you’ve had people enter the industry who not only don’t have the experience, but they don’t have the integrity to run a farm for a long period of time.
So I’m cautious, and I would urge everyone else to be cautious of get-rich-quick folks; people promising a lot, and also vendors who want to gloss over the details or who want to impose their technology solution on you without a detailed discussion. That is something I keep seeing coming up.
You have so many equipment choices out there. Just think of hydroponics. You can go online and get the cheapest NFT gutters and greenhouse kits from Asia. You see those out there all the time. Just be cautious. And not only cautious of the cheapest end of the spectrum, because on the other side, you’ve got these really high tech systems coming out of Northern Europe that are uniquely suited for cold northern climates.
Are those going to work in hot, sunny locations? We’re finding that they’re not transferring so well. So I guess my last bit of advice to anyone in the industry is to question everything. Keep learning, surround yourself with people who have the same attitude towards questioning and learning and researching, and partner with quality people, both on the vendor side and within your own team. If you get people who are there for the long haul, you can go the distance. You’re not going to make it if you’re surrounded by people who think farming is a scheme to rapidly profit.
Dan, thank you so much for your time.
Absolutely, I really enjoyed this conversation.
You can learn more about FloraGen and contact Dan, along with his team, at their website: www.floragentech.com/
