Operational Risk

The high rental cost in urban area and high electricity cost from 24-hours operation will together become the major driver in operational cost. Farm2Table will look to mitigate this by actively exploring subsidy programs with the electricity company by ways of establishing CSR partnership programmes. Efforts will be taken to lobby with government agencies for subsidies in the form of energy rebate and tax relieve. Each plants requirement in terms of the necessary length of exposure to daylight on a daily basis varies. Farm2Table will actively manipulate the schedules for each plants growing hours so that the growth period is to take place during off peak hours where the electricity rates are comparatively lower and thereby reducing operational cost.

Availability of talent in the market would be another operational risk. The vertical farming technology to be deployed is relatively new to the Hong Kong market. As such, the training and the subsequent retention of the trained staff would be critical to ensure operational efficiency. Farm2Table has set aside the necessary funds for training and re-training sessions to be conducted by its technical partner and will ensure that the re-training and re-training sessions are conducted on regular intervals whether the training is done locally or overseas.

BIBLIOGRAPHY & REFERENCE

- Urbanization of Asia Cities

More than 50% of the Asian population will be urban by 2018. UN-Habitat, October 2015 <http://trendwatching.com/trends/10-innovations-for-asian-citysumers/>

- Asia is home to 17 megacities, more than any other continent on Earth.

UN-Habitat, October 2015 <http://trendwatching.com/trends/10-innovations-for-asian-citysumers/>

- Asian urbanization shows no sign of slowing. The implications for you? These growing Asian metropolises present a truckload of innovation opportunities!

<http://trendwatching.com/trends/10-innovations-for-asian-citysumers/>

- POST-DEMOGRAPHIC CITYSUMERS: Urban-dwellers share passions, pain points, high expectations and a hunger for new offerings.

<http://trendwatching.com/trends/post-demographic-imperatives/>

- Rapid urbanization over the past decade has birthed the thriving economic, social and cultural hubs that are Asian metropolises. And with economic growth came higher spending powers and increased consumer sophistication. The movement of people also resulted in the melting pot of ideas and cultural exchanges so rampant

in many Asian cities, from Singapore to Shanghai, Mumbai to Manila. Yet systems and infrastructure are struggling to keep up with this rapid change. Cue common issues riddling Asian cities: improper housing and sanitation, horrendous traffic, safety and social welfare concerns, pollution, environmental damage, and more.

So, welcome to the era of the Asian CITYSUMER – increasingly experienced and sophisticated city-dwelling consumers, navigating urban life and battling various civic and social issues every day. This group is a prime audience for brands and businesses. Serve the unique needs associated with urban living and you'll win much love

<http://trendwatching.com/trends/10-innovations-for-asian-citysumers/>

- Cities are one of the central drivers of POST-DEMOGRAPHIC CONSUMERISM, and they are also where this trend finds its purest expression. In large and rapidly growing cities, consumers can pursue the lifestyles they desire: not only are cities more permissive of tradition-eschewing pursuits than rural areas, they also

provide access to a diverse range of products, services and experiences.

Meanwhile, greater economic opportunities and higher incomes increase residents' ability to pay for these lifestyles, and a competitive culture

around collecting unique experiences enhances the desire for them. The tribes within cities are delightfully diverse, yet there are common pursuits (for

convenience, unique experiences, and for holistic self-improvement) and shared problems (congestion, pollution, time-constraints and stress) that can be catered to:

by you! <http://trendwatching.com/trends/post-demographic-imperatives/>

- “Let me feel confident in the choices I’m making” – “Curated selections” are an effective solution for this job, and Whole Foods’ is already delivering brilliantly in its existing stores, with its 365 Everyday Value house brand (which may be the focus of the new chain, if trademark filings are to be believed). But, again, Whole Foods is not alone here. For example, in February, Target announced that its

“Made to Matter – Handpicked by Target” collection of value-priced “high-quality, better-for-you products” will double in size to 31 grocery brands, including 200 new and exclusive products, generating an expected $1 billion in revenue by year’s end. <https://hbr.org/2015/05/whole-foods-misguided-play-for-millennials>

- 74% of Chinese shoppers are likely to consider whether a product is fair trade, environmentally friendly or donates a portion of proceeds to charity when buying, a higher proportion than in Australia or New Zealand.

<http://trendwatching.com/trends/post-demographic-imperatives/>

- Factory Fresh - Locally-sourced healthy meals delivered daily to customers' doorsteps. Launched in May 2015, Factory Fresh is a Beijing-based food delivery service that brings set menus to customers’ doorsteps every morning. The

nutritionally-balanced meals are cooked to order using locally-sourced, market-fresh ingredients; calorie and nutritional information is available on the brand’s website. Factory Fresh’s set menus are priced at around CNY 360 – 500 (USD 56

– 80) per day.

<http://trendwatching.com/trends/post-demographic-imperatives/>

- “Give me convenient access to healthy food” – Both Target and Walmart are aggressively working to satisfy this job by rapidly expanding the number of CityTarget, TargetExpress, and Walmart Express stores. Perhaps the real solution to this job goes beyond simply locating stores closer to city dwellers to actually bringing the store to the consumer. But with $10 billion in 2014 sales and an annual growth rate of 14% over the last five years, the grocery delivery market is booming. Everyone from Amazon and Google to Instacart (partnered with Whole Foods) and FreshDirect are already jumping into it.

• <https://hbr.org/2015/05/whole-foods-misguided-play-for-millennials>

- “Give me good value” + “Enable me to make healthy choices” — Whole Foods is often referred to as “Whole Paycheck” because many perceive its prices to be significantly higher than those of traditional grocers. But the market void created by this perception is quickly being filled by big players like Walmart and Costco (which many believe will be the largest U.S. food retailer in a few years). Walmart last year began selling organic foods from Wild Oats in an attempt to disrupt prices in the market for which Whole Foods is best known.

<https://hbr.org/2015/05/whole-foods-misguided-play-for-millennials>

Reference & Sources

§ http://farmdirect.hk/en/news

§ http://www.interiordesign.net/slideshows/detail/8003-big-ideas-growing-green/22/

§ http://www.lohasexpohk.com/lohas-u-s-a/?lang=en

§ http://www.evergreensrepublic.com/

§ https://www.facebook.com/evergreensrepublic

§ https://www.greenqueen.com.hk/evergreens-republic-organic-aquaponics-hong-kong/

§ http://hongkong.coconuts.co/2016/03/30/hong-kongs-greener-future

§ https://www.instagram.com/p/BHoV-M7hcxd/