Ottawa hydroponics startup The Growcer sees growth opportunity in fresh food

Corey
Corey Ellis is a founder of The Growcer, which provides equipment to help northern communities grow food year-round. (Photo by Mark Holleron)

When students Alida Burke and Corey Ellis were on a visit to Nunavut two years ago to research ideas for social entrepreneurship in northern communities, one thing stood out more than all the rest: food insecurity, particularly the inaccessibility and exorbitant cost of fruits and vegetables.

The food insecurity rate – the percentage of residents who lack reliable access to affordable, nutritious food – in Nunavut ranges between 50 and 80 per cent, according to a report by the territory’s health department. Statistics Canada data shows that food in Nunavut costs up to three times the national average.

Those startling facts spurred Ms. Burke and Mr. Ellis to launch The Growcer, a social startup formed out of the student-run social entrepreneurship program Enactus uOttawa. The Growcer aims to empower northern communities to grow their own produce locally rather than relying on expensive shipments from the south.

The company is doing that by manufacturing and selling retrofitted shipping containers designed specifically for Arctic conditions which use hydroponics to grow produce year-round.

“People connect with food on a very personal level,” says Mr. Ellis. “It was one of those hard-hitting issues. How is it that these people can’t even access food even if they have a decent living? If you’re paying $12 for three peppers, you really don’t have much in terms of choice.”

The firm wants to address food insecurity and change the way produce is bought and consumed in northern Canada, while also working to improve health and wellness education and increase employment in those remote communities.

“It’s the reason people have breakfast programs, the reason you donate to the food bank,” says Mr. Ellis. “It’s the idea that food is one of those basic, basic things that without it you can’t really lead a fulfilling life.”

After kicking the company into gear as part of the 2016 cohort of uOttawa’s Startup Garage, the firm is now working with the Northern Alberta Institute of Technology to finalize a manufacturing agreement and will be selling its hydroponic systems across Canada throughout late spring and summer.

Mr. Ellis says some examples of buyers include businesses such as restaurants, catering companies or grocery markets; entrepreneurs who have a background in hydroponics, agriculture or farming; or non-profit organizations that are looking to grow food, revenue and employment in their communities.

The Growcer currently has buyers lined up in seven communities in Nunavut, Newfoundland and Labrador, Ontario and Manitoba, and expects to roll out the first one in April and the last one by July. Mr. Ellis says the company could end up selling as many as 12 systems – at $140,000 per unit – by the end of 2017.

Not all participants are remote northern communities; one is a non-profit in Ottawa that will be buying one of the company’s systems in order to create employment for youth and sell the produce year-round. The technology has appeal even in urban settings, because it provides a solution to the costs that come with the seasonal availability of produce, Mr. Ellis says.

“This model is very flexible,” he says. “It appeals to a wide audience because it can do very different things to different people and their needs.”

The Growcer is projecting $1 million in sales revenue for 2017 and expects to turn a profit quickly, after only the first couple sales of its system. Within the next year the company hopes to triple its headcount (the firm currently consists of just the two co-founders) in order to double its capacity to deliver the systems and double its sales as a result.

“That’s the sort of exponential growth that we’re looking to have in the next year,” says Mr. Ellis.

Because the company’s target communities also tend to lack access to financial capital, the firm is working on setting up an internal micro-loan fund whereby it provides its product as a loan to be repaid as the buyer makes money off it. Mr. Ellis says that would help speed up the sales cycle.

He says the company’s response rate so far has been very encouraging.

“We know this is a huge issue that a lot of people are facing. The minute people hear what we’re proposing, they want to jump on board. We expect that as we scale up our ability to deliver these and scale up our sales effort, we’ll be able to have a lot more of these things running.”