Andrew Carter – Smallhold – Ep 19

Andrew Carter, Co-Founder & CEO at Smallhold

In this episode of “Let’s Talk Farm to Fork”, we’re joined by Andrew Carter, from Smallhold, who we will be talking to about how their mushroom minifarms are reducing resource waste and changing urban agriculture. One mushroom at a time.


[00:00:00] Mitchell Denton: Hi there and welcome to “Let’s Talk Farm to Fork”, the PostHarvest podcast that interviews people of interest across the food supply chain. Today on our show, I’m joined by Andrew Carter from Smallhold, who I’ll be talking to about how their mushroom minifarms are reducing resource waste and changing urban agriculture. One mushroom at a time.

So with no further delays let’s get started.

Hi, Andrew. Thanks for joining me on the podcast. How are you?

[00:00:26] Andrew Carter: I’m doing well. How are you?

[00:00:28] Mitchell Denton: I’m doing pretty good myself. Before we get into it. Would you mind telling us a little bit about yourself and what you do and while you’re at it, maybe just a fun fact about yourself that most people don’t know.

[00:00:40] Andrew Carter: Yeah. So, I’m Andrew Carter. I’m the CEO and co-founder of Smallholds. Um, my background is mainly in helping people start indoor farms. I went to school for ecological design and environmental sciences. Focused on bioremediation technology and eventually found my way to help people build big hydroponic facilities.

Um, first starting out in the Northeast, United States, but eventually throughout the planet. So I’m very much a leafy green and tomato grower by heart, but then really got excited about the mushroom industry back in 2015, and 2016. 

And eventually started Smallhold in 2017, which I’m sure we’ll get into, but a fun fact about myself that some people don’t know is that I have a background in classical cello.

A funny story that we don’t talk about too much, but the first money that was invested in Smallhold is actually from me playing a Daft Punk song at some random person’s wedding. And they gave me a couple of thousand dollars, which I then turned and bought a shipping container, which we turned into the first version of the Smallhold technology, uh, in Williamsburg in Brooklyn.

[00:01:56] Mitchell Denton: Wow. So. You kind of have to give it up for Daft Punk, kind of helping inspire Smallhold in the end. I guess. 

[00:02:03] Andrew Carter: Exactly. Yeah. 

[00:02:04] Mitchell Denton: That’s, that’s amazing. Well, on that note, let’s talk farm to fork. So for the listeners who don’t know what Smallhold is and how it works, would you mind giving us a run through of the operation?

[00:02:18] Andrew Carter: Yeah, Smallhold is a distributed farming network. We’re growing local mushrooms for the masses. We focus on specialty mushrooms. And so, these are mushrooms that are all grown on waste streams, uh, from the timber industry, um, we grow Oyster Mushrooms, Lion’s Mane, Shiitake, Maitake, all of these fun mushrooms that aren’t the typical button mushrooms that you’d find in the United States.

Um, and we’ve developed our own technology, uh, and supply chain to allow us to grow it in all sorts of places. So we have our own patented technology that you can find inside certain grocery stores and restaurants, where they’re growing the mushrooms right in front of their consumers. And then we also have large facilities.

We call them macrofarms, but they’re warehouse farms ranging from 30 to 80,000 square feet that grow mushrooms for local regions. So we have these facilities in New York and Texas, and we’re going to build one in California and build them all over the place. Um, but those are for local mushrooms that are packed in clamshells that you can find in the grocery store and local restaurants.

[00:03:25] Mitchell Denton: No, that’s awesome. You kind of touched on this, with your introduction, but what was the journey that led to you co-creating Smallhold?

[00:03:34] Andrew Carter: Yeah, it was quite a journey. Uh, we, as, as I kinda mentioned, I’ve been in the indoor agriculture space for quite a while. Um, helping people more on the greenhouse side of things and eventually warehouse like vertical farms. And so I got the chance to visit so many of the companies that you see today in the news, and work with them on their original business plans and irrigation methods and all sorts of stuff.

And I eventually kind of felt that there had to be so much more than lettuce. Um, a lot of people are focusing on lettuce, in the indoor Ag space, there’s all sorts of other kinds of farms out there, I’m sure you’re aware of. Um, but uh, in our weird little subset of the industry, everyone’s growing lettuce and it was starting to get saturated five years ago.

It’s extremely saturated now. And, I thought that we should try to grow other things. Um, I’m into all sorts of different kinds of crops, but mushrooms and the fungal kingdom just always fascinated me. Uh, we really have no idea how to grow these things. 

There’s so much mystery and even the mushrooms that we do know how to cultivate, we don’t really get that much, like as far as the society is concerned. 

Then there’s just a massive amounts of other mushrooms, the we have literally no clue, like a Chanterelle Mushroom, you know, humans have no idea how to grow that in any kind of environment. And so, I just found that so fascinating. So I thought that we would use my knowledge in indoor agriculture and try to apply it to indoor farms, to grow mushrooms and a way more efficient and exciting way than is normally done in, uh, in the mushroom industry, in the United States. 

And, started in a basement in Westchester, outside of New York city. I was like, working on a restoration of my family’s house up there. And just on the weekends for growing out King Oysters in the basement, it looked like we were cooking drugs. It was crazy like tents and stoves, and it was just insane. Um, eventually that evolved to the shipping container farm that we, that I was telling you about and Williamsburg. 

And, that was all sort of weekend projects with me and Adam, my co-founder and we decided to quit our jobs at the end of 2016 and incorporate and turn Smallhold into a real business. And so January, 2017, we got accepted into this program called Techstars, which invested a little bit of money into the company. 

And, allowed us to hire, our first hires. Some of them are still with us today and built out the first versions of the technology. And it’s, you know, it’s kind of taken off from there. 

But it was quite an adventure. We, we started with these in-store productions. And so if you go into Whole Foods in Gowanus, Brooklyn, or you’re going to the Standard Hotels in East Village or go to any central market in Texas, you can see these installations that capture hundreds of thousands of data points per day. 

Each shelf is controllable remotely by us and allows us to follow growth parameters and climate recipes for each mushroom that’s grown in there, um really cool stuff. It took a lot of time to develop that. Um, but people are very excited about that kind of idea.

You know, it’s it’s as fresh and as local as you could possibly get. And their plan was always to work on that, but then also to apply that technology to larger facilities, which we decided to do during Covid. And, uh, we can probably talk at length about what Covid, how Covid affected Smallhold.

Um, but it, it definitely created a zeitgeist in the United States at the very least about mushrooms. And so many people are interested in um, the products that we grow. And so it accelerated that whole development of the, the business and, we’re still doing installations, but then we also have our large facilities.

We also sold grow kits for people during quarantine, which ended up being a pretty big success. Um, and you know, again, the idea is getting people as many mushrooms as possible and making sure that they’re fresh and local and organic and there’s a lot of stuff that happened in between, but that’s pretty much the extent of it. 

[00:07:50] Mitchell Denton: Nah, that’s fascinating. That’s quite a leap for some guys that aren’t really sure about mushrooms. I mean, you’ve, you’ve done well if you’ve got a, a great variety going, and I’m excited to see what other mushrooms you venture into in the future? But, they’re beautiful, just to look at. I personally, I’m not a mushroom person, but in more recent years I’ve been getting into them.

My wife’s Italian. So I kind of have to, you know? 

 But just the looks of some of these mushrooms, I’m a visual eater, and I see these mushrooms and I’m like, “I want to try these, they look amazing.” The, the Yellow Oyster Mushrooms, the Shiitake Mushrooms, all those things they’re beautiful. 

[00:08:28] Andrew Carter: Exactly! And that’s, I mean, that’s a big thing with what we’re trying to do is that, at least in our community, most people are used to the slimy button mushrooms from a can. 

Um, because that’s what they’ve experienced throughout their entire lives. And in the grocery store, in the United States at least, it’s everywhere.

The mushrooms are wrapped in styrofoam and plastic. They’re all buttons. And when you come and you see our products that are harvested down the road, packed in compostable packaging, you know, beautiful colours and beautiful experience, it’s pretty easy to convert people back to the mushroom world. 

[00:09:05] Mitchell Denton: Absolutely. So can we expect to see other fresh produce items in the future from Smallhold?

[00:09:12] Andrew Carter: you know, originally we thought that might happen, but we see so much opportunity in mushrooms that we’re just really focusing on mushrooms. With fresh, you can expect new varieties from us, but then you can also see us incorporating and other kinds of products with other people. 

Doing collaborations, doing different kinds of projects underneath the umbrella that Smallhold is a distributed farming company, growing mushrooms. 

We spent a lot of time developing our technology too. And so, you know, there’s, there’s opportunities with that to kind of plug into other businesses. But, the big focus is really getting mushrooms to the masses. And so that’s what we’re really working on. 

[00:09:54] Mitchell Denton: Yeah, great. It would seem that Smallhold, especially coming out of New York City has a huge focus on reclaiming the term “local” produce. Would you mind speaking to that?

[00:10:04] Andrew Carter: Yeah. Local is, so much to so many different people. Uh, especially in the United States, like, you know, there’s no set rule for what local is, but the USDA has unofficially said it’s 500 miles. And so most people stick with 500 miles. Funny enough. In our opinion, the people that really kind of drive what local is, is usually Whole Foods actually.

Local food is everywhere and people go to farmer’s markets and all these kinds of things. But as far as, you know, a brand is concerned, Whole Foods has spent a lot of investment, and a lot of time defining what it means for each region. And the important thing to think about is it means something different to everyone.

And so, in New York, for example, you know, we’re growing in Brooklyn and we’re selling in Brooklyn and that means its so local to everyone that’s here. We’re also in Texas and Texas is huge. You know, we’re selling in, we grow in Austin and a little south of Austin in Buda, Texas, and. Uh, we’re selling into grocery stores in Northern Texas, which is like so far away, but, um, it’s still very local to those consumers.

And it’s very local when you’re considering the broader food systems in the United States. But, Texans define it as grown in Texas and Brooklyn people define it as grown in Brooklyn. And so it’s really important to talk to your community and the people around you, understanding what they expect from their food and hopefully driving them to like, expect more from other companies, because it’s a word that’s thrown around a lot, um, kind of like natural and kind of like all sorts of other kinds of elements.

And so we really try to incorporate it in everything we do. The food space, it’s not common. This doesn’t really happen that much. There are companies now like the big vertical farms or the big greenhouse companies that are trying to create a brand that goes across the country, but then all of the facilities are distributed.

Uh, but it’s emerging, there’s no like true successful company that we can all point to, to show that this has been done before. This is all brand new. You know, to create a national brand. That’s also local. So It’s a funny, uh, uh, you know, dilemma, I guess, but, uh, it’s a fun dilemma to solve. 

[00:12:25] Mitchell Denton: Absolutely. So. Smallhold’s minifarm technology. It’s quite, aesthetically pleasing while also being quite transparent. Was there any intention behind their design and how did you achieve those results?

[00:12:39] Andrew Carter: Yeah, there, there was a lot of intention behind the aesthetic behind them? 

We wanted to, we take influence from a lot of the kind of Space Age and Neo-Futurism kind of idea. And so, you know, we use rush metals and have these glowing glass windows and curved edges. And, um, all of that is, uh, very driven by what we want.

We, we thought people like, uh, as far as thinking about the future of food, You know, it’s, and we want them to be clean, but then we also want them to really showcase what the mushrooms look like. Because we think that by showing people a fruiting body or through showing people a beautiful mushroom, then at least a few of those people will be converted to eat mushrooms for the rest of their lives.

And so a lot of it has to do with the display and making sure that people see what’s going on inside of those units. Um, but then at the same time, there’s a lot of function behind it. Like, like we’re, again, I’m a grower by trade and our engineers and everyone that has been focused on building these things to grow food. 

Originally, we didn’t even think they were going to be in front of the consumer, we thought it was going to be like a back of house service. And a lot of people didn’t want that, they wanted to show it off. 

And so, we pretty much just brought it to the front of the house and then people got really excited about it. 

[00:14:08] Mitchell Denton: Yeah, that’s awesome. I’m definitely a advocate for conversion. I just loved the displays, in some of the partnered restaurants and hospitality that you’ve got them set up and they look beautiful. 

 What do you think is the biggest challenge you have with your product right now?

[00:14:24] Andrew Carter: Uh, the biggest challenge is just the, the, we want people to eat more mushrooms and people are eating more mushrooms, but we want them to eat more mushrooms. And so. We think that more people eat more mushrooms, the more they’ll diversify the varieties that they’re eating, try different specialty mushrooms, try our Lion’s Mane that looks like a furry alien, um, try different things out.

We are pretty successful getting these things done, like people are buying our mushrooms and people are trying new things. And so I don’t see it as like a huge issue or anything, but as we get into more conventional grocery stores and access to a customer base that, you know, isn’t exposed to these kinds of mushrooms too often.

Then education becomes a big component of what we do. The minifarms help a lot, like they’re right in front of people, they show people what these things look like when they’re growing. It’s not an alien it’s growing on sawdust, that kind of looks like soil. 

It’s certified organic, you know, all these things that people care about. And then we work a lot on education. It’s very regional, but we work with different groups and getting people substrates, or getting people, taught about how to grow mushrooms or how to prepare mushrooms. We released a cookbook over the winter. All of the profits are donated to the Fungi Foundation.

 That was a bunch of friends of ours that are chefs and photographers made this community cookbook that, uh, helps people learn what to cook. So then when they go and buy our mushrooms, then they know, how to prepare them. And then we really try to push the broader industry. Um, as much as we can, there was, like the movie Fantastic Fungi.

There are big events that are going on. There are, you know, there’s all these other people that are working on driving the mushrooms space, and we want to get as many people into that area and seeing those things, because if they, again we think that like a certain amount of people won’t like mushrooms ever.

But if you expose a bunch of people to photos of mushrooms or the idea of Mycelium, or, you know how beautiful the fungal kingdom can be, handful of those people will be obsessed with mushrooms for the rest of their lives. 

Like they will be mushroom people, who will go to conventions, they’ll join their local mycological society, and those are the people that will go to the grocery store and try to buy some mushrooms and then see all this junk that’s on the shelf and then hopefully see our stuff and realise that, um, it’s the way to go. And so that’s, that’s sort of how we’re approaching it. 

[00:17:18] Mitchell Denton: Absolutely. That’s fantastic. So it would seem that Smallhold has done a lot to leapfrog the food supply chain and all of the problems that come with the food supply chain. I just want to know, what would you identify as being one of the biggest pain points or blind spots in the food industry?

[00:17:35] Andrew Carter: Yeah. I mean the food industry is vast and so, so many different companies have so many different issues. Um, with Smallhold and mushroom industry. The mushroom industry is exposed to the same issues that most, agriculture is exposed to where you have centralised locations that are attempting to shift across huge distances.

And so they deal with decomposition and food waste and packaging. That’s only intended to extend their shelf life. And that’s why buttons are so big here where, you know, you’re shipping thousands of miles from basically one region in Pennsylvania. 

And they can’t get creative with their packaging and they can’t get creative with their varieties just because the distribution system doesn’t exist for them to do it. And so we have figured out ways of centralising certain parts of our business, so we can be competitive on a large scale, but then also having these distributed network of farms that allow us to provide that local farmer’s market quality, but then also at a price that makes sense for everyone. 

And so, I think distribution is key. People think that distance is the only thing. Last mile delivery is still crazy. Um, we haven’t totally solved that one, but because that we have a headstart in that we’re growing closer to the consumer, we deal with the same last mile delivery issues that anyone else does.

We just have less time that the product’s been decomposing. Um, and that also allows us to pack like our clam shells are made out of cardboard. That is really important to us, we’re trying to limit as much plastic use as possible in our company. 

And that is very tough to do if you’re shipping from far distances like you, that that cardboard is not going to survive that kind of a trip with power supply chains are set up right now. 

And so, um, because of how we’ve set up our operation, that allows us to be a little more free to try different, different kinds of things that we’re, we’re dealing with. 

[00:19:42] Mitchell Denton: Yeah. Yeah. You mentioned earlier your domestic grow kits and that you’ve managed to have a reach from New York all the way through to Texas. I’m just wondering what’s next on the cards for Smallhold?

[00:19:55] Andrew Carter: Yeah, next on the horizon is a Los Angeles. We’re building out a system currently building out a facility in Vernon. It’s about 10 minutes east of downtown LA. Um, it’s a pretty big facility using all of our technology, growing some really beautiful mushrooms for the Southwest market.

We can’t announce who it’s with, but we have tons of grocery stores and different food partners that are going to be serving our mushrooms all over the place. So we’re very excited about, um, getting there, in that region. 

[00:20:25] Mitchell Denton: Yeah, that’s very exciting. Is there a particular group or innovation within the industry that you’re excitedly keeping a watchful eye on?

[00:20:33] Andrew Carter: Yeah. Um, I mean, in the mushroom space, we are really paving the way I think for a lot of this kind of stuff. We think that a lot of people need to focus more on their brand and understand ing their customer a little more. Um, but as far as the broader industry is concerned, as far as like food production and all of that, we’re big fans of Gotham Greens.

There are companies that are out there that I don’t, they’re kind of stealth. And so I don’t know if I can announce who they are, but, um, people are working on all new ways of moving crops around greenhouses, which is very important. You can, you can grow all the Strawberries you want in an indoor farm, but harvesting the Strawberry and packing the Strawberry is where those kinds of businesses get complicated.

And so, there’s a lot of companies that are working on different ways of doing that in various greenhouses but also in big vertical farms. Um, so I’m really excited about that stuff, because that’s important for the broader industry. 

[00:21:43] Mitchell Denton: Yeah. Yeah. I’ve been keeping my eye on Gotham Greens as well. They’re doing pretty great things, but, um, what’s one thing you wish you had known when you first started out with Smallhold?

[00:21:54] Andrew Carter: There are so many things that I wish I knew when I started out with Smallhold, when we started Smallhold originally, I thought that all my experience growing plants would make Mushrooms really easy. I thought that Mushrooms, I knew that Fungi aren’t plants they have their own kingdom, but for some reason I thought that it would be a walk in the park compared to all the plants that I had grown.

And, I couldn’t have been more wrong. Like it was, I had to like relearn everything. There are some similarities with post-harvest and food safety and stuff. But beyond that, it’s just completely different. These things are like animals. Like they respire and they digest stuff it’s it’s like a whole different relationship to your environment.

Um, but then once I internalised that and like gave in to the lack of knowledge that I have, then it became really freeing and really exciting. So I, you know, I guess part of that was the process. 

So I don’t know if I totally regret not knowing that, but it was definitely something that probably could have made things faster.

If I had that going into that, um, the other, the other thing, and this comes from a more technical side, we now have some amazing people on our team that would tell me I’m ridiculous for not realising this before. 

But one of the issues that I see in the indoor ag space is that there’s this kind of like if you build it, they will come mentality where people are building these huge facilities, but not necessarily having the customers there.

Um, and it’s chicken before the egg thing. Because, you need the capacity to even sell to these places. And so I understand where it’s coming from, but I also think that there’s an issue with, people not realising how much brand matters or how much your relationships with these retailers matter. 

You know, that it’s all about just the amount of water you use or the future population of the planet and why we need to grow more food and less square footage. 

Um, when all that’s important, but it’s not the main thing right now. It’s really just trying to get a product out that people get excited about. then hopefully, you know, you’re still doing all of those things that you care about and it makes it even more relevant in the future when there’s climate issues, and population issues, and food security issues, and you’re still answering those questions, but that doesn’t make people want to eat it right now. It just makes people kind of feel guilty about the current food systems.

And so, I think that that’s important. And I kind of realised that when we started Smallhold, but I didn’t realise it as much, I thought that if we built the technology, everyone would want it. There’s so much more to it from that. 

[00:24:38] Mitchell Denton: Definitely. So unfortunately, Andrew, we are coming to a close, but before we do, I just wanted to ask, what is the number one takeaway you really want the listeners to absorb from this episode?

[00:24:49] Andrew Carter: I want people to eat more mushrooms. And so if you’re on the fence, including yourself, about trying those Yellow Oysters or trying the furry Lion’s Mane. Just try it out, it’s not going to hurt you. It’ll probably only make you stronger. Um, and it’ll really broaden your appreciation for all the things that you can eat.

And I’m sure that a handful of you will start incorporating it into your diet for the years to come, which means that you’re growing your, your eating food that’s grown on sustainable materials. 

It’s one of the most environmentally friendly source of calories you can possibly find. And that’s on every sort of rating that you could possibly think for water, energy, carbon footprint, all of these things.

And so. Yeah, just try it out. If you have a farmer’s market, that’s great. If you have a grocery store that only is selling buttons, that’s totally fine too. 

Just try it, try to eat more mushrooms because there’s, there’s so much more there. 

[00:25:56] Mitchell Denton: Yeah, I’m up for the challenge. Well, that’s all for today’s episode of “Let’s Talk Farm to Fork”. Thanks for listening. And thank you, Andrew, for joining me today. 

[00:26:06] Andrew Carter: Course. Thank you. Thanks for having me. 

[00:26:08] Mitchell Denton: If you’d like to know more about Andrew and Smallhold, check out the link in the description of this episode. 

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Until next time you’ve been listening to “Let’s Talk Farm to Fork” a PostHarvest podcast.

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