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Geothermal Greenhouse MarketResearch ReportExtractJonathan Allen, President of Firstfruits International Ltd.September 2013Please note that the following document is an extract only.To get further information please contact Invest in Iceland
EXECUTIVE SUMMARYThe Icelandic Geothermal Greenhouse Market Research Project has provided theimpetus to thoroughly explore all international market opportunities, emergingconsumer priorities, global societal trends, and greenhouse options that impactIceland’s search for a long-term, viable strategic plan for an export-based geothermalgreenhouse industry. Now that all of the research has been compiled and synthesized,we have summarized in this Report the major, relevant facts and findings of ourresearch. Accordingly we have identified the international market demand andfeasibility for various greenhouse products, and made our Report recommendationsbased upon our research and our interpretation of the global marketplace.What began as a simple quest to ascertain the market feasibility of differentcommercial greenhouse products for export turned into a serendipitous discovery of arare opportunity and vision for a nation. We were searching for the “right” traditionalgreenhouse product that Iceland could grow so that we could put together theproduction and revenue numbers, and then generate a strategic business plan for theproject. As we proceeded with our investigation, we soon realized to our dismay thatour research did not support any traditional greenhouse project as the quick and easyanswer for Iceland.Therefore we were forced to search deeper into the international markets todiscover if there were any other greenhouse opportunities that could be pursued. Inthe struggle to find the hidden treasure, we discovered that an internationalopportunity of unprecedented value was hovering over Iceland, which is uniquelypositioned to take a global leadership role in the emerging, new world of the future.Accordingly our research perspective was radically transformed from a simplecommercial viewpoint with targeted financial objectives into a complex, internationalperspective with global economic, socio-cultural, environmental, and political leadershipbenefits as rewards.The overall feasibility of any commercial agribusiness endeavor incorporates themarket feasibility, technical feasibility, and financial feasibility into the strategicassessment of the opportunity. This Report is primarily focused upon the marketfeasibility of various greenhouse products as the first step in the overall feasibilityprocess, especially since the market feasibility results then determine which productsqualify for further technical and financial feasibility analysis. The approach taken in thisProject was to complete the overall market feasibility for a wide range of potentialIcelandic Geothermal Greenhouse Market Research Report7
greenhouse products, and then narrow down the list to focus further upon the marketsegments and products with the greatest market support.Using the narrowed list of market segments and products to pursue, we haveendeavored to solicit strategic business partners to assist us in completing the technicaland commercial feasibility analyses required to develop viable, strategic business plans.We are in various stages of development with targeted strategic business partners, butdue to the multifaceted nature of the opportunity before Iceland, it will take more timeto get all the details in place. We have been contacting potential business partnerssince May of this year in each of the market sectors addressed in this report, and haveestablished meaningful connections and relationships with some key internationalleaders that will hopefully enable viable, strategic business plans to be completed in thenear future. With their support and involvement, credible strategic business plans canbe developed that will enable investment capital to be secured to implement them.This Report is a market weather vane that indicates the direction that the marketwinds of change are blowing, and points the way for Iceland to go. It is not anexecutable business plan, which will come in the days ahead, but the strategic directionto pursue with starting points for the journey. Like the ancient sages say, “the Masterwill appear when the pupils are ready.” And the details of the path are only needed bythose who first decide to walk it. Let’s talk a look at a potential path for Iceland.MAJOR RESEARCH FINDINGS1)Traditional monocultural greenhouse production (tomatoes, peppers,cucumbers, etc.) for export is a low feasibility, high risk commercial opportunitythat will only be successful if existing produce sales and distribution channels areassured through long-term industry relationships that are willing to guaranteesustainable, contracted pricing and margins that are largely immune fromcompetitive market forces.2)There has been an abundance of large commercial greenhouses built in manynations (particularly Europe) over the last decade that have saturated the freshproduce and herbal markets with surplus production, and led to the demise orbankruptcy of many commercial greenhouse operations in the last few years.3)There is strong and growing customer demand worldwide for fresh, “locallygrown” herbs and produce that has precipitated a large increase in the numberof small commercial greenhouses, which are springing up to supply “local”demand and other non-supermarket, direct-to-consumer sales.Icelandic Geothermal Greenhouse Market Research Report8
4)There is also a tremendous increase worldwide in the number of noncommercial, household micro-greenhouses to provide home-grown food and toincrease consumers’ increasing commitment to food self-sufficiency.5)Niche greenhouse products like botanical and medicinal herbs, specialty culinaryherbs and mushrooms, organic breeder seed stocks, and nutraceutical andcosmeceutical ingredients offer the best possibilities for long-term commercialgreenhouse success.6)There is soaring global demand for processed algae, mushroom, botanical, andmedicinal herb products for nutraceutical, cosmeceutical and medicinal use.7)Processed mushrooms for culinary, nutraceutical and medicinal use are highlycomplementary product lines with botanical and medicinal herbs and offerhighly feasible, low risk opportunities for geothermally based, non-greenhouseproduction.8)There is expressed market demand for specialized organic herbs and mushroomsfor dried bulk and nutraceutical markets.9)There is strong demand for algae-based greenhouse production of nutraceuticaland cosmeceutical products, primarily Omega 3s (DHA and EPA) and astaxanthin.Extremely high market demand exists for nutraceutical algae powders in veganencapsulation that do not require the use of hexane as an extractant.10)High demand exists for chlorella and spirulina grown in hermetically sealedstainless steel, pharmaceutical grade tanks.11)Commercial nutraceutical algae greenhouses can generate secondary revenuestreams from biofuel and biofeed utilizations.12)“Sustainability” is a top priority of the new generation that is dramaticallychanging the food, health, and personal care market opportunities of the future.13)Technological advancements in genetic engineering combined with an explosionof patented, proprietary seed products and programs have accelerated the legaland moral debate regarding biotechnology, and intensified the divide betweenconventional and organic agriculture.14)The global Organic Market is a burgeoning, multi-billion dollar industry thatoffers Iceland some very significant commercial opportunities in line withIceland’s competitive advantages.Icelandic Geothermal Greenhouse Market Research Report9
15)Certified Organic seed production and high-quality greenhouse seed productionare ideally suited for Icelandic sourcing due to Iceland’s pristine natural assets,geographical “isolation” and national environmental consciousness.16)Generally speaking, Certified Organic products significantly increase thecommercial feasibility of any potential export products from Iceland.17)Climate-adaptive and Seismic-adaptive architectural designs for greenhousesand buildings using volcanic pumice powder in heat-insulating concrete orbuilding blocks present a unique opportunity for Iceland to advance integrativeconstruction models, and should be considered in the selection of projectconstruction alternatives.RECOMMENDATIONSBased upon all of the research findings and the personal interactions with keyindustry leaders throughout the project research, it has become exceedingly clear to usthat Iceland has before it a very unusual opportunity to build upon all of its uniquenational characteristics and competitive advantages, and to stake out a long-term,global leadership role in the integration of sustainable energy, sustainable health, andsustainable environmental systems.This strategic opportunity is not merely a private business opportunity, but aglobal leadership opportunity for a whole nation. It is not based upon simple replicationof an existing commercial endeavor, but rather upon synthesizing many differentmarket signals, consumer values, natural and cultural competitive strengths, andcommercial technologies into an innovative commercial ecosystem that will enable anecologically based geothermal greenhouse culture to flourish in Iceland and serve as aninternational model for the world.All of the recommendations given in this report pertain to pursuing anddeveloping various aspects of this strategic opportunity for Iceland. Each of therecommendations can be pursued on its own, independent of the otherrecommendations as stand-alone opportunities. Indeed, there are many companiesaround the world who are currently experiencing commercial success in each of thegreenhouse sectors addressed in this Report.Icelandic Geothermal Greenhouse Market Research Report10
Obviously development of such an Ecoceutical BioPark is complex and extensive,and will need to be implemented in phases over a targeted 5-year time horizon asstrategic partners and investment capital are secured. It is without doubt a big vision,but a very doable and opportune one that can be effectively implemented inmanageable, incremental stages as strategic pieces come together. The BioParklocation and design layout must allow for scalability of greenhouse operations toaccommodate future business growth. We recommend starting the BioPark withsmaller commercial complexes and manageable ½ to 1 hectare greenhouse modules,with the goal of expanding as rapidly as production quality is validated and businesscredibility is established. Our target phase-in strategy envisions a 5-year time periodwith approximate phases and timetable listed below:Icelandic Geothermal Greenhouse Market Research Report13
Phase IFinalization of Pre-Project Contingencies Phase II Phase IIIContinued Solicitation of Strategic Joint Venture PartnersFinalization of Strategic Business Plans for each BioPark ModuleObtain Icelandic Cultural and Political Consensus as a NationalIcelandic InitiativeEcoceutical BioPark Site Selection and Engineering BlueprintsGlobal Promotion of Ecoceutical BioPark for Initial CapitalizationEcoceutical BioPark Initialization March 2014 to March 2015Mushroom Spawn and Nutraceutical Mushroom ProductionCenterBotanical and Medicinal Herbal GreenhouseSpecialty Culinary Mushroom and Herbal GreenhouseGlobal Center for Sustainable EntrepreneurshipEcoceutical BioPark Expansion October 2013 to March 2014March 2015 to March 2016FDA and EU-approved Nutraceutical, Pharmaceutical andCosmeceutical Processing FacilityAlgae Nutraceutical GreenhouseGlobal Seed and Spawn BankGreenhouse Seed Propagation CenterInternational Coalition of Scientific, Technical, and ProfessionalExpertsUniversity-hosted Faculty and Graduate Student Exchanges andProjects in Ecoceutical Research and SustainableEntrepreneurshipIcelandic Geothermal Greenhouse Market Research Report14
Phase IVInternational Business Development II.March 2016 to October 2018Global Development of Icelandic Ecoceutical and Seed BrandingHosting of 1st International Sustainable EntrepreneurshipConferenceSpecialization in Algae Nutraceutical ProductsSustainability Thinking and EntrepreneurshipWe recommend that Iceland commit itself to becoming the global nucleus ofSustainability Thinking and Entrepreneurship.III.GlobalSource Seed Depository and Spawn BankWe recommend that Iceland establish an organic Seed Depository and SpawnBank with affiliated propagation production facilities to enable it to become a premierglobal conservator and source of natural, non-GE seeds and mushroom spawn by theyear 2023.IV.Icelandic BrandingWe recommend that Iceland develop a unique Icelandic branding scheme for itsline of culinary, medicinal, botanical, and nutraceutical food products and ingredients toposition itself uniquely in the international marketplace. An organic Icelandic brandname like “Arctic Manna” (example only) suggests the type of market image that couldattract great interest around the world, and be a unique and exciting branding conceptto market globally. We recommend a similar Icelandic branding strategy for the organicseed and spawn lines of products.Icelandic Geothermal Greenhouse Market Research Report15
V.Geothermal Horticulture in National Security AgendaWe recommend that Iceland develop national policies to incorporate geothermalhorticulture as a strategic asset in an updated Icelandic National Security agenda.Throughout all of the market research was a common thread, a growing concernby consumers everywhere regarding the safety, quality, and ready availability of healthyfood. This heightened consumer priority is intensified when viewed in the context ofincreasing geopolitical tensions, Iceland’s relatively high dependence on imported foodproducts, and an inevitable, impending global financial realignment sooner than later.Together
greenhouse product that Iceland could grow so that we could put together the production and revenue numbers, and then generate a strategic business plan for the project. As we proceeded with our investigation, soon realized we to our dismay that our research did not support any traditional greenhouse project as the quick and easy answer for Iceland. Therefore we were forced to search deeper .
