From container to fork: Adapt brings urban mushroom farms to America

Canadian vertical farming startup Adapt Farm Tech has teamed up with Reef Technology to bring its mushroom farm ponds to major cities across the United States, starting with Austin.

Reef transforms urban real estate such as parking lots into mobility and logistics centers and currently operates more than 8,000 locations in hundreds of cities. The partnership helps Adapt to get its containers within walking distance of customers, such as restaurants and supermarkets, without having to pay sky-high rents for downtown commercial or industrial space.

Adapt opened its first shipping container in Austin and began shipping to restaurants this week. The startup plans to expand to more than 50 locations in the coming years, including Boston, Chicago, San Francisco, Seattle and Miami.

“Our model is to create hyper-local farms in densely populated urban areas to reduce the distance between the farm and the fork,” Jonathan Murray, CEO and founder of Adapt AgTech, told TechCrunch.

The container farm chain Adapt specializes in “off-label gourmet mushrooms,” gourmet mushrooms that were not available in North American stores until recently. Think pink, yellow, blue and king oysters, brown mushrooms and the modern lion’s mane.

“Mushrooms lend themselves very well to container growing because of their energy requirements compared to other crops such as leafy greens,” Murray continues. “You don’t need a lot of light. It’s really just the temperature and humidity.”

Adapt launched in February 2022 and shipped its first farm to a Toronto location in June of last year. Since then, the company has grown steadily and now has farms in Ottawa, Vancouver, Halifax, Kingston and Austin. On February 17, Adapt announced a partnership with Loblaws, Canada’s largest retailer, starting with two flagship stores in downtown Toronto and then dozens in Toronto and Ottawa before expanding to other locations in the coming months.

Adapt will also be launched in 2023 with retail expressions at Canadian supermarket chains Sobeys and Pattison Food Group.

“By the end of 2023, we will be available in the stores of at least three of Canada’s top five retailers, from Halifax to Vancouver and in between, representing more than 3,500 stores,” said Murray.

Adapt recently completed an early round of climate VC matching and will use the funds to expand its base and attract more support.

Sustainable fruiting, cheaper mushrooms

Adapt AgTech designs and manufactures its shipping containers in Delta, British Columbia. In addition to the five containers in use today, Adapt recently started production of an additional 16 units and plans to deploy another 25 over the next 12 months. Some of Adapt’s containers are solar-powered with backup plugs, but in the interest of a quick start in the US, the startup will plug its containers into the grid. Energy use, Murray said, is small: about 10 kilowatt-hours per day.

The company’s distribution model resembles a hub and spokes. Adapt uses a central facility in Kingston, Ontario to do all the lab work and colonize the substrate blocks, meaning mycelium, the root structure of the fungus, can grow on blocks made from sawdust, used coffee grounds or coconut. The startup then ships the blocks to containers where the mushrooms can fruit near customers. According to Murray, this allows Adapt to ship mushrooms within hours of picking, which means not only fresher mushrooms, but also longer-lasting, less spoiled mushrooms.

The startup supplies and operates the containers and also fulfills the orders. An operator oversees everything from picking to order management and mushroom delivery.

“Right now, all of our containers are essentially run by a full-time farmer, so we’re allowing them to become what we like to call ‘farm entrepreneurs,'” Murray said. “So unlimited commissions, expand your territory as much as possible. Let’s add containers, let’s expand your territories. It also allows us to attract new and young people to farming, which is exciting.”

Murray also pointed out that existing mushroom farm operators approached Adapt to convert their home operations into Adapt farms.

The entire process allows the startup to remain vertically integrated, saving money on materials such as the substrate, which Adapt produces from whatever is locally available. Adapt’s control of each farm also allows the company to track which mushroom varieties are fruiting well and grow more of them, giving the company even healthier margins and a quality product that is less expensive than expected at the farmer’s market, Murray said.