Farms of the Future

Scaffolding Assignment 1
Farms of the Future:
Empowering Growth with Automated Vertical Farming

BUS 101 Core Course in Business

Moldir Kaiynbayeva, Timothy Wawn, Aigerim Zhangozina
Nazarbayev University
Astana, Kazakhstan
Jul 16, 2023

by R1T5 group members:

Aibat Tubalykov
Ali Kosmaganbet
Alua Meiirbekova
Darina Ibrayeva
Rauan Ibragim
Sultan Turan
Yershat Abil

Summer 2023
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Entrepreneurial Opportunity, Value Proposition, and Target Market

Identification

During the selection process for our venture, active involvement from each group
member was crucial. After brainstorming, we generated around ten business ideas,
which were narrowed down to three potential models: tyre recycling, virtual try-on
clothes, and automated vertical farming solutions. Ultimately, we decided to pursue
vertical farming after employing the nominal group technique, which can be found in
the Appendix.

While our project aligns with existing global businesses in the vertical farming arena,
most of these farms were established and began operations before the widespread
adoption of AI systems. In contrast, our approach integrates AI technologies to
create a Vertical Farming system integrated with a mobile application for purchasing
and managing processes. The innovation lies in the AI integrated application's
inclusion of customers and partnering business accounts. The main purpose of an
app for customers is to receive any sort of suggestions related to specific nutrition,
and for entrepreneurs to see which products are in high demand. Moreover,
business accounts will be able to access the status of the farm at any time. This
approach enables us to explore market opportunities for both B2B and B2C
interactions.

Our project aims to deliver commercial and social benefits by providing an

agricultural venture supplying high-quality food to individuals and businesses. Our
vision is to initiate agricultural development in Kazakhstan and subsequently
succeed in the global market by implementing innovative approaches that align with
the UN's sustainable goals, specifically targeting Zero Hunger, Sustainable
Economic Growth, and Responsible Production and Consumption.

The potential market for vertical farming franchising could be substantial. Factors
such as urbanization, limited agricultural land, and rising demand for sustainable,
locally sourced food all impact its size. Furthermore, technical developments and
vertical farming's scalability make it an appealing investment. However, the specific
market size varies from location to location, necessitating a comprehensive
examination of local demographics, consumer behavior, and competition. Despite
these variations, the overall potential of the vertical farming franchising market
remains appealing, driven by the global demand for efficient and sustainable food
production.

While existing competitors in the global and Kazakhstan markets sell vertical farms
and agricultural accessories, their presence is limited. For instance, Canadian Cubic
Farm is one such competitor, and HydroGreen Vertical Pastures boasts the ability to
produce up to 25 million pounds of fresh livestock feed annually, using a fraction of
the water required in traditional fields. However, these farms are localized and may
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not fully leverage the potential of IoT (Internet of Things) technology. At the same
time, Kazakhstani vertical farms have yet to gain popularity among businesses and
society, possibly due to the perceived lack of customer benefits.

Our augmented vertical farm is designed to stand out by innovative features and
expanded characteristics shown in Table 1 below.

Table 1. Characteristics and features of the project

Service Supply Possibilities Sensors Advantages

Remote Seeds Lettuce Water level Pesticide-free

control agricultural
products

Agro- Replaceable Spices Water 99% less

technological filter cartridges temperature water*
recipes

Scheduled Substrate Berries Temperature Info about

service and humidity each plant and
inspection and above the product
maintenance deck

Delivery app: Sterilizers for Orientals Root zone Fresh products

the ready trays temperatures delivery
marketplace of disinfection
customers

Substrate Vegetables CO2 level User-friendly

trays sensor online
purchasing

Fertilizers Flowers TDS, pH

Medical herbs
*“Researchers estimate vertical farms can use up to 99 percent less water than
traditional farms depending on their system” (Marsh, 2023).

For the business to succeed, it is important to determine the right target market.
Since the cost and maintenance of vertical farms are fairly expensive, it is not
suitable for everyone. Therefore, we will employ a differentiated marketing strategy.
The main targets are other businesses (restaurants, pharmaceutical factories, food
supplement manufacturers, animal farms, etc.) dependent on a constant supply of
plants (Fedotov, 2020).

Potential franchising customers:

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- Urban Farming and Agricultural Enthusiasts: Urban agriculture is rising, so

there are more individuals who live in big cities and would like to contribute to
the development of the local food production market. Many face challenges
like limited space and lack of resources to start their farm. The vertical farming
project offers a franchising opportunity that provides training, technology
access, and ongoing support for urban farmers to set up and run their vertical
farms.
- Entrepreneurs and Investors: including both individuals interested in
developing a sustainable agricultural system as a diversification of their
existing business models, and those who seek out in opening and operating
high profitable businesses with established systems and support.
- Socially Responsible Investors: vertical farming franchises may appeal to
investors that value environmental sustainability and social effect. They see
the opportunity to address food security, reduce food miles, and promote
locally grown, pesticide-free produce.

Potential product customers (B2B):

- Restaurants and food service businesses: vertical farming services can
provide restaurants with a reliable supply of locally grown produce, aligning
with their eco-friendly values.
- Small and medium-sized food industry business owners: Vertical farming
offers small and medium-sized food businesses a dependable supply of fresh,
sustainable produce. This helps businesses stand out by offering
environmentally conscious menu options.
- Retail shops (supermarkets, convenience stores, groceries, eco markets):
vertical farming provides a year-round supply of fresh produce, making it a
great option for retail shops to offer their customers locally sourced and
pesticide-free products.
- Kindergartens and schools: farming services can help schools and
kindergartens offer fresh and sustainable produce, promoting students' good
eating habits and wellness.
- Food delivery services: food delivery services need high-quality ingredients,
and vertical farming can provide fresh produce. Partnering with our services
can expand their reach by targeting a bigger audience due to quality food.
- Farmers: Experienced farmers with land can benefit from diversifying with
vertical farming. Year-round production and space optimization are
advantages. Our services allow using existing resources, access to expanding
markets, training, tech, and support to transition to vertical farming and
diversify income.
- Pharmaceutical industry: vertical farming can provide a controlled
environment for growing specific plants used in medicinal products, ensuring
their purity and quality. Collaborating with the pharmaceutical industry could
lead to the development of specialized natural remedies and medicines.
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Potential product customers (B2C):

- Eco Activists: these individuals actively search for sustainable food options to
reduce the negative environmental impact of consumerism. They prioritize
eco-friendly practices and support locally-grown, pesticide-free, and
environmentally conscious foods.
- Health-Conscious Individuals: they are nutritionists, dietitians, and allergy
sufferers seeking pesticide-free, nutritious, locally-grown fresh food. They
place a high value on environmentally responsible behavior and are
enthusiastic about promoting the production of food grown close to home
without pesticides.
- Fitness Enthusiasts: this segment includes athletes, sports bloggers, coaches,
and gym clients prioritizing high-nutrient and quality superfoods. They want to
incorporate nutrient-dense foods into their diets to support their athletic
performance and overall health, which our product can help.
- Gastronomy Enthusiasts: people who love freshly foraged produce prioritize
unique, locally grown greens, herbs, and vegetables to enhance their culinary
experience.
- Technology Enthusiasts: this market loves technology and would love to have
a modern system for their home. They're excited about the idea of having a
vertical farm with the ability to grow fresh produce easily in their homes.

There are many ways to reach these customers of the target market. Firstly,
mass advertising on social media such as Instagram, TikTok, and Facebook helps
gain public attention. Secondly, forums related to agriculture are a great place to
reach a target audience interested in vertical farming. Thirdly, as important as the
abovementioned strategies are cold calls to target businesses in the local area to
expand our influencing market.
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References

Fedotov, E. (2020, July 31). Will Vertical Farms Replace Traditional Fields In
Kazakhstan? World of NaN. https://world-nan.kz/blogs/zamenyat-li-
vertikalnye-fermy-traditsionnye-polya-v-kazakhstane

Marsh, J. (2023, February 23). How vertical farming can save water. Agrilinks.
https://agrilinks.org/post/how-vertical-farming-can-save-
water#:~:text=Researchers%20estimate%20vertical%20farms
%20can,systems%20currently%20in%20vertical%20farms

We confirm that all team members have made a legitimate effort to contribute to this
submission and agree that all members should receive the same Assessment
Grade.

Yes
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Appendix
Decision-making processes
The Nominal Group Technique:
1. The problem is to write a scaffolding assignment that consists of 2 parts:
a) Identifying Your Entrepreneurial Opportunity
b) Developing the value proposition for your chosen target market

2-3. Our ideas:

- Vertical farming franchising, a ready-made vertical farming solution
- Virtual try-on, fit and size recommendation solution
- Tyre recycling
- Food waste recycling
- Grammarly-like service for Turkic languages
- Car-sharing service
- Fully automated car wash
- Gravestone production and sale
- University dorm night cafe

4-5. The shortlist of ideas:

- Vertical farming franchising, a ready-made vertical farming solution:
We aim to revolutionize farming by providing comprehensive agricultural solutions as
a B2B company. Our services include breeding, advanced technology, and
maintenance support. Instead of a traditional marketplace, we will organize fairs to
promote our diverse range of finished products. By operating as a franchise, we
ensure sustainable growth and contribute to the revival of agro, ecology, and local
production in Kazakhstan. Our engineers will oversee multiple farms, optimizing
efficiency and enabling distribution to high-end restaurants and local markets.
- Virtual try-on, fit, and size recommendation solution:
Like OLX, our platform lets buyers upload their 3D body measurements while sellers
offer clothes with sizes and quantities. It promotes inclusivity, notifies users of size
discounts, offers personalized clothing suggestions, and creates a vast database. A
seamless and inclusive shopping experience empowered by technology.
- Tyre recycling:
I propose an eco-friendly solution for recycling used tires in our country. We can
obtain raw materials (crumbs) to manufacture rubber coverings for bike paths,
playgrounds, and sports fields through mechanical shredding. We can also produce
paving stones, tiles, curbs, rolls, and mats. Partnering with KazAvtoZhol, we'll
establish collection points and offer self-collection from tire dealers, ensuring a
sustainable and efficient process.

6. Ranking and final decision

1st: Vertical Farming franchising
2nd: Virtual try-on, fit and size recommendation solution