Agriculture is no longer a major industry in Hong Kong. Though, local venture Farm Direct aims to make a difference via indoor hydroponics. Its new outlets at the Eslite bookstores have created much buzz among the public recently, but the focus of Director Michael Ng is on the relationship between vegetables and life.

Farm Direct originated from Happy City Farmer, which specialises in selling gardening supplies and promotes growing edible plants in the small space at home. Ng said that the mushrooming of stores focusing on healthy foods and the frequent voices in the public in support of reviving farming in recent years had triggered an idea: Since the company is already teaching farming techniques, why not engaged in agricultural production?

90% saving on water and fivefold increase in production capacity

After careful research, Ng and the company’s shareholders chose hydroponics among the many diverse farming methods available. Hydroponics - growing plants without soil - delivers nutrients to crops via water. Farm Direct distributes water via pipes. Through a closed loop system, the pipes are continuously irrigated with water containing fertilizers. The water is recycled, filtered and reused in a loop. Hydroponics uses up to 90% less water and fertilisers.

In addition, hydroponics is more efficient in the use of space. Through land optimization, Farm Direct is able to increase the production capacity of the land at least fivefold by applying different planting densities according to the growth cycle of the plants. Since its opening in June 2013, Farm Direct’s vegetable output has increased to as much as one tonne per day.

Expensive hardware for outdoor farms

There are many hydroponic farms cultivating crops in old factory buildings, but Ng sticks to outdoor farms as he believes that farming needs a lot of natural elements. At Farm Direct’s three farms in Fanling and Kam Tin, vegetables are grown under plastic-netting shelters, which not only maintain good ventilation, but also keep birds and large insects out. At the top, a transparent plastic canopy protects the plants from rain and wind while letting natural sunlight through.

While jesting that one residential unit now may cost more than a farm, Ng revealed it really costs a lot of money to set up a farm’s pipes and outdoor protective sheds. He said that the company had limited financial resources at the beginning. Fortunately, the shareholders’ experience came to the rescue and managed to set the business on the right path immediately. Another difficulty for hydroponics is Hong Kong’s bad weather. Our hot and humid climate poses a great challenge to outdoor farming, especially in terms of energy efficiency.

The “impossibility” of opening outlets at Eslite

One distinguishing feature of Farm Direct is that it is engaged in three major areas: farming, cold chain and retailing. Ng believes that covering production, supply and sale will help ensure food safety. While the company must solely take responsibility for any problems that may arise, it is easier to track and solve the problems.

In Ng’s view, among production, supply and sale, retailing is exposed to the most number of uncontrollable factors: product categories, pricing, positioning, economic environment and market conditions all have great impact on earnings. To him, site selection is the underlying key. Farm Direct is actively increasing its outlets at the MTR stations, which Ng regards as a stronghold for development as he sets his sights on their heavy pedestrian traffic and shopping convenience.

However, the most unique site selection is none other than the outlets at the Eslite bookstores. He said that Eslite’s concept is “close to the ground” since it stresses on the integration of life and books. It offers many books on maintaining good health and slow living. People who walk into the bookstore will slow down and thus spend more time to find out more about the products. Therefore, both sides are mutually complementary.

Staying focused to look for products /h2>

Farm Direct’s customer base has a wide age distribution, and its target wholesale customers include hotels, hospitals, schools, banks’ canteens and supermarkets. Ng believes that there are three advantages that make Farm Direct excel in market competition: first, hydroponic vegetables sold at the outlets are ranked top in terms of safety factor for agricultural products; second, taste quality and yield are relatively stable; and third, prices are consistent throughout the year and are cheaper than other products of the same type. According to Ng, Farm Direct does not intend to reap huge profits. Instead, it aims to promote fruits and vegetables which are locally planted as well as healthy and safe.

Ng and his colleagues travel around the world to bring in local and foreign agricultural and related products. Ng said that their strategy for product search is “setting vegetables as core product, around which going for in-depth horizontal expansion, and as far as possible satisfying the customer’s needs to prepare a meal at one stop.” Besides food ingredients, Farm Direct has launched products such as fruit/vegetable ice cream and fruit shake to appeal to the taste buds of different consumers.

Putting expansion aside till time is ripe

With regard to future development, Ng admitted that the company is close to breaking even, but he believes that it has expanded too fast and needs to examine product sales to adjust mindset and mode of operation. Ng is always looking out for agricultural technology that improves efficiency. He expects innovation in terms of savings on energy and investment costs within two years. Therefore, the company is using this vacuum period to expand its business to capture market share. He also disclosed that some overseas companies have proposed cooperation with Farm Direct on its agricultural technology, management model, and even brand. The company will seek more opportunities for cooperation in this regard in the future.

Ng is pleased to see that the Farm Direct brand is gradually showing results, but he disapproves of using paid advertisements to drive sales. In his view, unlike luxury goods, the prices of vegetables are not much higher than their costs, so he does not want to over-invest in marketing. He pointed out that the company’s site selection for its outlets is already a marketing approach, and its outlets at Eslite have increased media exposure. In addition, Facebook, talks and interviews are also effective methods for increasing exposure.

Farming is not easy and attentive care is important

In recent years, many young people have become interested in reviving local farming, but Ng reminded them to pay attention to “the gap from turning interest into professional mission and responsibilities”. He pointed out that a farmer’s life is much harder than imagined. In the heat of summer, farm temperatures can rise to as high as 50 degrees Celsius. He said: “Farming requires great effort. The process is hard and risks are high. But vegetables can only grow well with great attentive care.”