Ames indoor farm sees rapid expansion

Posted at 4:38 PM, Aug 27, 2022

AMES, Iowa (AP) — Ames indoor farm Nebullam has rebranded as Clayton Farms as it expands to the Twin Cities and sets its sights on eastern Iowa and beyond.

The new name is a nod to chief farmer Clayton Mooney, the charismatic and public-facing cofounder of the company. He’s an energetic combination of farmer, boxing coach, ultra-marathoner and former professional poker player.

With a direct-to-consumer business model that delivers picked-the-same-day produce to about 500 subscribers in Iowa, Clayton Farms has seen “40% growth, month over month, for about five quarters straight,” Mooney said.

“It’s awesome and it’s working. That’s why we’ve been able to expand into new markets, expand the team and raise another round of financing,” a round that will likely be finalized in September, he said. “In the past year, we’ve had about 600% growth.”

Serving weekly customers in the Ames, Ankeny and Des Moines areas, the indoor farm also has a pilot project in Cedar Rapids and Iowa City, where it delivers every-other week.

“We’re testing the market from here that way. Essentially, if the demand continues to grow in Cedar Rapids and Iowa City, we’ll launch a farm there as well,” Mooney said. “We’re only a couple dozen subscribers away from actually having to find space over there to launch the farm because we won’t be able to keep up with the demand from this location.”

On Aug. 4, Clayton Farms launched its second indoor farm in Edina, Minnesota, its first foray outside of Iowa. That farm will be fully operational in September. Anyone in the St. Paul/Minneapolis area can become a subscriber.

Subscriptions are available weekly or less frequently, depending on each customer’s needs.

After getting the Edina space, demolition quickly began on the site. A full painting followed and installation of the equipment Clayton Farms developed early on in its existence.

“So it’s a very, very quick turnaround time,” Mooney said. “It is so quick. I like to describe it as: You could spend two years and 20 million bucks to launch a grocery store to a community. But you could spend two months and $150,000 to launch a Clayton Farms in your community. From getting the keys to first harvest is two months.

“It’s go go go. Danen (Pool, Clayton Farms’ other co-founder) and I like to joke that we’re aging in dog years. But we’re also getting wisdom at that pace, too.”

Clayton Farms’ six-stack vertical growing systems allow for year-round harvests of pesticide-free produce, grown using no soil. Products grown include tomatoes and leafy greens like butterhead lettuce, oakleaf lettuce, pea shoots, rainbow chard and a peppery variety of arugula specially requested by customers. Microgreens are also popular and include radish, bok choy and broccoli sprouts.

With approximately 1,000 square feet of commercial space located in the Iowa State University Research Park, Clayton Farms has about a quarter-million plants growing at any given time, Mooney said.

Judi Eyles, the director of the Pappajohn Center for Entrepreneurship at Iowa State, describes herself as a Clayton Farms super fan. One of the first subscribers, she recently received her 100th delivery of fresh produce.

“For me, it’s always been about the product. I eat a LOT of salad. Their lettuce is truly superior than anything you can buy in a store, and it stays fresh FOREVER!” Eyles told the Tribune in an email.

When Pool and Mooney started Nebullam in 2017, they had a much different vision for what’s now become Clayton Farms. The COVID-19 pandemic caused them to pivot in a direction that’s had very positive results, Mooney said.

“We saw ourselves wanting to become the John Deere of indoor farming,” he said. “We planned to design and build growing equipment to get into the hands of new and expanding indoor farmers. We planned to sell the equipment to them and then license the software that runs our equipment for the recurring revenue.

“For the first three years, we never thought we’d be a farm.”

As Pool and Mooney were bringing their prototypes to commercial-scale life, they’d have people come in for tours. As they harvested from the working prototypes, they’d wholesale the produce to local grocers and restaurants.

“At the time, when the pandemic hit, we lost all that revenue overnight. We were sitting there, six days before our next harvest and we said, ‘What do we do? How do we keep the lights on?’” Mooney said.

That’s when they came up with the idea for a direct-to-consumer model. It started in Ames with about a dozen customers, with the customer base doubling every month or so and experiencing big bumps from some viral media events.

“I feel very much over the last year and a half that we’re a different company now,” Mooney said.

Pivoting from a business-to-business model to direct-to-consumer put the focus on Clayton Farms’ consumer brand. Growth went from about 3% per month to 40%.

The first three and a half years of research and development were vital, though, as the company had both the equipment and the software ready to be able to make that pivot

“Essentially, we have software running everything. Each six-stack system has a brain which is communicating with the lighting schedule, the water, the nutrient levels, the temperature, the humidity,” Mooney said. “The big thing it’s communicating, too, and really takes the guessing out of it is our dosing system, which is simply how often are water nutrients are dispersed, using algorithms to improve that.

“We’re always learning and always adjusting those parameters to grow happier, healthier plants.”

Clayton Farms open-sources the data it collects at its farm so that other indoor farmers around the world can learn from it and build on it, Mooney said.

Eyles thinks Clayton Farms’ pivot from selling indoor farm equipment to expanding the indoor farms was a smart one.

“Not only that, they stepped up their marketing, their packaging, and their customer engagement,” she wrote. “That was the brilliant part of their shift to home delivery. They created dedicated customers (fans) and supplied an outstanding product at a fair price. They use clever gimmicks and giveaways to build customer relationships and keep people wanting more.”

With Pool as the chief engineer and Mooney as the chief farmer, the cofounders and their investors thought the new name Clayton Farms was a good change to reflect the business’ identity as a farm and connect the name to its customer-facing founder.

“Danen’s background is in plant biology and mechanical engineering. He is the one bringing the ideas, the designs, the builds — all the equipment — to life that then brings the life to the food,” Mooney said. “So I feel like we make a very good team with kind of the yin and yang of founders where our strengths together equal a fully rounded company.”

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