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Newark Hydroponic Greenhouse Project. SIPA Newark Capstone Team: Ryan Chan Christopher Santulli Kesha Thomas McBeth Mark Viehman Advisor: Ivan Gonzalez May 4, 2011. Project Description.

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newark hydroponic greenhouse project

Newark Hydroponic Greenhouse Project

SIPA Newark Capstone Team:

Ryan Chan

Christopher Santulli

Kesha Thomas McBeth

Mark Viehman


Ivan Gonzalez

May 4, 2011

project description
Project Description
  • Operations: The Newark Conservancy will operate the greenhouse with subject matter expertise from a consultant for the first year
  • Greenhouse Goals:
    • Create a self-sustainable business that can support the greenhouse’s social missions
    • Enhance the job skills of the City's ex-offender population
    • Produce and distribute food in a manner that is environmentally sound
    • Support the city’s mission of creating economic opportunity for its residents and enhancing the vibrancy of Newark
    • Proposed strategy for self-sustainability:
    • Sell to institutional clients
central questions
Central Questions
  • What are the best practices for the successful operation of a hydroponic greenhouse?
  • Does demand for its produce exist in Newark?
  • How can it maintain its social missions and be financially self-sustaining?
scope of work
Scope of Work
  • Conduct a demand study by researching the market and identifying and surveying anchor institutions in the Newark area
  • Research similar greenhouse operations to identify successful business practices
  • Produce a report detailing our findings, our methodology and the research conducted
  • Develop a production forecasting tool to help the Newark greenhouse operators project revenue and expenses
  • High-Level Findings
  • Demand Study
  • Best Practices
  • Production Model
  • Future Considerations
  • Q & A
high level findings
High-Level Findings
  • It is difficult for hydroponic greenhouses to be profitable
  • Experienced personnel are critical
  • The produce market is extremely competitive
  • The location and size of the greenhouse is critical to its financial success
  • Supplying institutional clients poses unique challenges
demand study goals
Demand Study - Goals
  • Research produce demand among Newark-area anchor institutions
  • Examine product lines needed to satisfy the demand of anchor institutions
  • Assess opportunities to market and sell local produce and promote the Newark greenhouse’s social mission
  • Identify operational challenges and other barriers to entry into the institutional market
demand study methodology
Demand Study - Methodology
  • Potential clients
    • “Eds and Meds”
    • Methodology
    • Interviews, surveys and research
    • Anchor profiles
    • Overview of operations
    • Assessment of the extent to which each anchor institution values the multiple missions of the greenhouse
    • Description of current produce suppliers
demand study recommendations
Demand Study - Recommendations
  • Potential institutional clients:
  • Gourmet Dining, LLC
    • New Jersey Institute of Technology
    • Kean University
    • Seton Hall University
  • Product lines and volumes:
  • Remain flexible in production to cater to institutional and customer demands
  • Sell high-margin produce to subsidize primary operations
  • Pricing:
  • Enter into contract agreements with institutions wherever possible
  • Managers should stay aware of pricing trends in the market to exploit profitable opportunities
best practices goals
Best Practices - Goals
  • Identify best practices and lessons learned as they apply to the Newark greenhouse’s implementation and operation
  • Analyze production and distribution processes
  • Learn Client Relationship Management and Marketing strategies
  • Identify strategies to overcome operational challenges to entering the institutional market
  • Consider possible paths to expansion
best practices methodology
Best Practices – Methodology
  • Operational best practices
  • Implementation lessons learned
  • Client relationship management
  • Production management and forecasting
  • Transportation and distribution
  • Overcoming barriers to entry into the institutional market
best practices recommendations
Best Practices - Recommendations
  • Operational best practices
  • Hire an expert grower for ongoing operations
  • Consult a third-party expert on appropriate greenhouse technology
  • Understand packaging requirements for different types of clients
  • Implementation lessons learned
  • Give special attention and priority to the greenhouse site location
  • Test water quality
  • Ensure reliable access to water and bathrooms
  • Adjust expectations for first-year cost overruns
  • Find a niche within the market
best practices recommendations13
Best Practices - Recommendations
  • Client relationship management
  • Meet with institutional clients at regular intervals
  • Highlight comparatively smooth production and pricing
  • Leverage the social and environmental missions
  • Consider hiring a full-time Business Manager
  • Transportation and distribution
  • Utilize the service of a values-based food distributor
best practices recommendations14
Best Practices - Recommendations
  • Addressing barriers to entry into the institutional market
  • Food safety practices certification
  • Insurance
  • Production management and forecasting
  • Forecasting will require preparation and flexibility
  • Monitor price and produce trends
  • Plan for demand changes based on institutional seasonality
  • Variety is important to customers
  • Keep in mind what types of produce are more cost efficient
production model
Production Model
  • Description of the Production Model
    • Revenue
    • Expenses
  • Assumptions
    • Production is highest in June
    • Temperature is kept constant throughout the year
    • Nutrients do not vary throughout the year
    • Annual output is based on output in March
    • Usage of lights
  • Demonstration
considerations for the future
Considerations for the Future
  • Expansion
    • Build a larger greenhouse
    • Expand at a later date on the same site
  • Developing a local food network
    • Economies of scale in the Newark greenhouses
    • Reclamation of brownfields or vacant lots
    • Increase in city employment
    • Branding opportunity
thank you
Thank You!