Since starting out with crowd-funding in 2013, Growing Underground’s innovative model for urban production is stepping up a gear. The brainchild of entrepreneurs Stephen Dring and Richard Ballard, it has attracted the attention of major players within the fresh produce sector such as G’s and Florette, as well as people keen to replicate elements of the scheme elsewhere. Produce Business UK finds out more
Growing Underground is situated in two tunnels located under the Northern Line in Clapham, south London. The tunnels are over 120 feet below ground. Although builts before the onset of World War II, they were never joined up, nor are they linked to any underground stations. With an area of some 65,000 sq ft the tunnels were used as air-raid shelters during the war, and were able to provide shelter for 8,000 people. For many years since, they have been put to various purposes including document storage and film sets and it was this latter use that led Ballard to discover their existence while out hunting for a location for a shoot during his studies as a film student.
“We had been looking at ways of setting up an urban farm, including vertical growing,” Dring explains. “We had seen farms using supplementary lighting rather than daylight. My business partner knew about the tunnels underground and it seemed a logical move.”
“We were initially in the Clapham North tunnel and that is where we did our research and development. There was no office, no loading bay and no lift. Then this site in Clapham South became vacant after the previous tenant vacated it and had the extra facilities we needed – a loading bay, lift and office. We moved here, but have kept the previous one as it will provide expansion space.”
Because both tunnels had been used as storage spaces, they already had the necessary lighting and facilities. But sadly, according to Transport for London, which concedes this is the first time it has ever been approached for its tunnels to be used as farms, there are no similar tunnels available in the same condition elsewhere within the Underground network.
Growing Underground’s tunnels are unique
Growing Underground had to obtain additional investment to cope with the move to the new premises, so as to be in a position to meet the anticipated demand for its produce. Much of the business’s backing has come via crowdfunding, a method that the company had already used to obtain start up finance. The duo not only had to sell the idea of setting up a farm, but creating a brand at the same time. Despite these potential hurdles, the concept of underground farming captured the attention of potential investors each time it was presented on Crowdcube.
A second crowdfunding campaign was announced in 2015 as considerable work was required to bring the tunnel up to the standard required for food production, as part of the partners’ vision to become more efficient and supply in volume to all customer segments, and specifically retail, in the future.
The business has benefited from a corporate investment of cash and services from G’s Fresh in return for a 13% stake in the business. “The agreement not only provides us with a cash investment, but a range of services from management accounts, purchasing, HR, access to a graduate scheme, health and safety, IT and R&D,” the partners say. “G’s will also be responsible for driving sales through the multiple retail sector.”
Chef Michel Roux Jr, Neil Sanderson, managing director of Florette and Glen Fernandes, a director of HSBC, backed this crowdfunding campaign on Crowdcube. It was massively over-subscribed, successfully raising the entire funding that Growing Underground had been seeking and in total, more than £1million has been raised through crowdfunding.
Dring says: “We have over 800 investors. We have to keep them constantly updated. Investor communications could be easier but we like to be egalitarian. We also have major investors such as Michel Roux and G’s. G’s regard it as an investment, they are trying to understand innovative farming techniques and it fits within their R&D budget. Michel Roux lives in Clapham and we approached him for investment. He is a non-executive director, advises on produce and is very good for PR. Florette is also involved – the managing director sits on our board. I am the sales person, office manager, delivery man and more.”
Clearly each investor has its own motivation or reason for interest. G’s Fresh Salads md Daniel Cross says: “In urban areas the cost of land is high and it is not possible grow crops like you would in the countryside. The cost of production through going underground is much more attractive. We have been involved for a couple of years now. We are interested in the trading opportunity presented by the urban farming principle. We are a shareholder and help them where we can. We are interested in getting their production into London supermarkets in the future.”
Michel Roux (c) is a major investor in Growing Underground
Sustainability is seen as one of the key ingredients within the Growing Underground business concept. All the energy used within the tunnels comes from renewable sources, utilising the latest LED lighting systems and the packaging is made from recycled materials. Growing Underground is a zero carbon rated company. By linking into the FarmDrop system, Growing Underground is able to reduce its food miles by keeping produce within the city However, the hydroponic method of growing does mean that the company is unable to achieve organic status despite the fact that it uses no pesticides.
Growing Underground produces a range of leaves such as peashoots, rocket, wasabi mustard, red basil, red amaranth, pink stem radish, coriander, baby watercress, garlic chives, celery and broccoli. The company aims to ensure that its produce reaches its destination within four hours of being picked, so as to ensure total freshness, and the leaves are used at Le Gavroche, Michel Roux’s Mayfair restaurant. And because of the controlled growing methods, crops are unaffected by weather and seasonal variations and so consistent high quality produce is available year round.
The entire output from the farm is distributed via nearby New Covent Garden Market and the logistics employed makes transport sustainable. Going Underground’s wholesale customers on the market make their deliveries and then on their way back to the market, collect Going Underground’s consignments for delivery to wholesalers on the market. Customers include P&I Fruits at New Covent Garden Market, retailer Ted’s Veg at Borough Market and top chef Bruno Loubet as well as Roux, of course. In addition, Dring personally hand delivers some orders directly to local restaurants.
Consistent, high-quality crops all year round
“We will be concentrating on micro leaves for the next couple of years, dealing with supply and developing the business,” says Dring. “Further down the line in terms of product development, we intend to look at growing mushrooms, heritage tomatoes and mini vegetables. I see us scaling up our business in London and eventually moving to other conurbations, expanding our product range and customer base.
“We have been contacted by other people. We see a lot of potential for franchising and licensing the concept. People contact us wanting to do this. We tell them to create a business plan for their proposed area, then come back and talk to us. It shows just who is interested enough to make the effort. Our business plan is for Clapham and London. We have had about 50 people express interest and are talking to about 10 to 20 people who have created business plans.”
Growing Underground is believed to be unique in terms of its location. There are no other similar farms known to exist in tunnels, although there are caves where mushroom farming takes place. In France, for example, the Cave Des Roches in the Loire Valley produces 100tonnes of gourmet mushrooms each year, and has seven levels of caves in which the mushrooms are grown. In the 1960s, an underground mushroom farm used to operate in Somerset, at Harpur Hill producing and caves in Bethseda, Snowdonia are now used for maturing cheese.
“We are the first underground farm,” says Dring. “There are other companies that farm indoors, especially in Japan and China, but we are the only ones to do it underground. A lot of growers are focusing on indoor production because this allows for greater efficiencies and you can have a more controlled environment than in a greenhouse. We have had some interest from the United Arab Emirates – they can just stick cylinders in the ground and cover them with sand. It is easier for them and cooler than growing produce in a greenhouse.”
Given the constraints on available above ground space, greater attention is being paid to the possibilities presented by other locations as G’s Fresh Salads’ Daniel Cross points out. “It is all about where the relevant space exists that can be taken up for growing as close as possible to the consumer to ensure a low carbon footprint,” says Cross. The challenge is the cost. Potential opportunities could include disused car parks, tunnels and caves.”
Roux also sees opportunities aplenty. “Underground farms aren’t subject to the changing climates and seasons that most farms are – the environment is controlled which means they can operate through the year and consistently produce goods of superb quality,” he explains. “But the biggest draw for me was sustainability. At some point, there will be more people in the world than we have the capacity to feed. There’s an abundance of unused space all over the world with so much potential, and we really need to start utilising it properly.”