Billy Trainor is one of the three founders of Verdegreens, a Houston-area farm that has been in operation since 2017.
They built their operation from the ground up, with reclaimed greenhouses from a defunct nursery, off-the-grid solar power, and water brought to the site by hand. Today they have 16,000 sqft of greenhouse growing space and produce around 7,000 plants every week. As restaurant industry veterans, the three partners grew their business based on a deep understanding of the type and quality of produce that chefs and consumers are drawn to.
Thanks to hydroponics and CEA, they’ve been able to meet those needs and more.
When did you first come to start working with hydroponics and controlled environment agriculture? Was that an initial part of your farming journey, or something you were exposed to later?
This was all new to us when we first started. Food wasn’t new; all three of us were veterans of the restaurant industry. But in 2016, when we started, we had zero experience as farmers. I had been working overseas as a restaurateur for years, and my partners were a chef and winemaker. We all shared a desire to get closer to the production of food, not just its preparation.
It’s kind of a funny story, actually. I like to tell people the reason we have a hydroponic farm in Texas is because there’s no good Mexican food in Taipei, Taiwan. That’s where I lived off and on for 15 years, opening and managing restaurants. My brother in law, Kyle, now a partner on the farm, was a chef. On one of his visits, I told him to come to Taipei and open a Tex Mex restaurant with me. There was not a lot of competition!
The problem was that you couldn’t get the chilis. Jalapenos, serranos, poblanos; they just weren’t available. We started scheming about how we could grow our own, accounting for the different climate and lack of nearby farmland in such a dense city.
Controlled Environment Agriculture presented itself as a solution, and I threw myself into learning how it worked. I fell in love with the idea.
Did you start working with Hydroponics immediately? Or try any other forms of CEA?
We initially wanted to do aquaponics. But when we finally got to visit a facility that was doing that at scale, it felt like a factory farm. My partner had been in the fish keeping business and was not impressed by the state of the fish; packed in, very stressed, like chickens in a metal shed. I don’t want to universally cast aspersions on the idea. I’m sure it’s a great system for many, but we just saw too many potential points of failure.
We had also been interested in aqua because of the vision that it could be a way to productively produce both fish and plants in the same facility. But in our research, we didn’t find anyone monetizing the fish side of the operation. It ultimately just seemed like an elaborate way of getting nutrients to plants. A Rube Goldberg machine for growing vegetables.
Hydroponics was much simpler, and the plumbing is so similar to aquaponics that we figured we could always convert in the future. But to be honest, once we got up and running, we’ve never had any interest in making that switch.
Of course, as it turns out, you didn’t end up opening a Tex Mex restaurant in Taipei, you opened a farm in Texas.
How did you come to start Verdegreens?
Well, during that time of research and learning, my father was diagnosed with cancer, and he passed away. I came home to support him and my family, and during this time started talking even more seriously with my partners about CEA. After my father’s passing, I returned to Taipei, but my partner started looking at properties back home. He found one he liked, and he convinced me that we could do it. So I moved home for good, and we got to work.
Did you start working with AmHydro right away?
Actually, no. They came in later. We’ve really run a bootstrap operation from day one; financed only by personal savings and reinvested sales. It was a very DIY operation in the early days. We constructed all our greenhouses by hand – utilizing 6 big structures, each 30’ by 96’, that we purchased from a nursery near Dallas that was going out of business. It all cost only $7,200. When we got our property it was an empty lot with no water or electricity; nothing. We got ourselves a shipping container for storage and started putting up the greenhouses as we needed them. We’ve worked our way up to four now!
So, we were very cash poor. We knew about NFT systems, but DWC was much cheaper. We built our own with supplies from the hardware store. We wanted to keep experimenting though, so eventually we got 150 NFT channels from China and put them up side by side with our DWC. During the hot Houston summers, the DWC would regularly fail, with plants dying from the roots, and water reaching ambient temps of 95 degrees.
But the NFT kept chugging. Over time we started switching entirely to NFT, and that’s when we started working with AmHydro. We really have no regrets and would recommend them to anyone looking for quality, reliable equipment.
Now that you all have begun to find your stride, can you tell me a little bit about yourself and your role on the farm. What do your day to day responsibilities look like?
I’m one of three partners here, and I handle a lot of the communications, marketing, financial side. The daily work is always different, but I’m less involved in the growth of the plants, and more involved in helping build the business overall. I should also mention that in addition to the three of us, we now have five employees, so I have some duties related to payroll and supervision.
One of the biggest things growers ask us about is marketing. Growing plants hydroponically is fairly straightforward, but every market is different, and learning to assess and meet your market’s needs is a crucial skill.
How did you decide what to grow and who to sell your products to?
So to start, let me mention that we applied for and received a farmers grant from the state of Texas. Not everyone knows about that type of resource, and so I highly recommend people learn more about grants that may be available. Farmers in the US aging out of business is a big problem, and there’s a lot of programs designed to address it.
The grant questions were really straightforward, but you need to be prepared. They ask the two eternal questions of farming: what are you going to grow, and who are you going to sell it to?
People don’t think about that second question enough. You can grow anything. But who is going to buy it, and at what cost?
If you can’t figure that out you shouldn’t bother. We knew we needed to grow something people eat a lot of, year round. We were aware from research that leafy greens grow quickly and have a fast turnover. We thought for a while of doing nothing but basil, but now I’m glad we didn’t become a single product farm – or dependent on a single wholesale client. My advice for having predictable profits is to grow something that people will buy by the pound, not just by the clamshell.
We actually started growing before we had any contracts, purely on speculation that we could find buyers. Since we were from the restaurant business, we had a lot of friends and knew what doors to knock on. My partner Kyle was aware of how chefs buy. Independent restaurants can buy directly from farmers, but others will only purchase from approved wholesalers. That helped us focus.
We also started by doing farmers markets, and I really swear by that approach. People think Farmers Markets are small potatoes compared to wholesale accounts.
What they don’t realize is that Farmers Markets are an incredible way to land bigger accounts. Chefs go to them looking for ingredients, they see that our hydro-grown produce is really beautiful, and inevitably they start asking “How much can I buy?”
Industry news this year has been concerned with high profile investor-driven farms going bankrupt.
As someone who is operating successfully in the same economic climate, what have been your takeaways from hearing about these examples?
First of all, we are familiar with Joe Swartz and read a few of his opinions. We pretty much fundamentally agree with his thoughts. They are our thoughts. Vertical farming, especially indoor, has some fundamental issues with energy costs and unit economics. At Verdegreens, we rely on shade cloth and insect netting. We’ve built the best farm we could possibly afford. When we see $150 million going to a company that has never grown a plant, we have… thoughts. We agree with Joe that there is no better and no cheaper light source than the sun. Especially in Texas, where there is no shortage of land, we see vertical as a solution in search of a problem.
Indoor farms may be necessary in places like Singapore. They are technological marvels. But the idea of growing with LED when there are hundreds of acres available fifteen minutes away; it doesn’t make sense. You’re not a technology company first, you’re a grower first.
There are so many people doing great work in this space, and they’re doing it for a lot cheaper than the hundreds of millions of dollars being spent. VCs are looking for unicorns, but we believe in local food systems. They just want a blueprint they can roll out anywhere. But the idea of using a universal system to do local food production doesn’t make sense.
What does the future hold for you and Verdegreens?
Good question. We’ve had some calls for investment from some who like what we do and want to invest, but we’ve resisted so far, because we aren’t convinced they have an adequate understanding of the unit economics. People come out, see the farm, see us at markets, and they tell us we should be ten times the size, selling produce on every block. We’ve resisted big cash infusions because we don’t think they’re founded on realistic assumptions.
We’ve dedicated ourselves to growing organically in the economic sense. We have big dreams and ambitions, but we respect the market demands. Of all the benefits that hydroponics brings, it’s still low margins. It’s still just lettuce.
We’ll keep making our system better, and we may need to expand to more land in the future. If we don’t go giant overnight, the future is still really bright.