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Meet Oishii, the Tesla of strawberries that could upend the $1.3 trillion produce market

What cofounders Hiroki Koga and Brendan Somerville figured out that every other vertical-farming startup missed.

Meet Oishii, the Tesla of strawberries that could upend the $1.3 trillion produce market
[Photo: Oishii]

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“Hey, we have the best strawberry in the world. Is there somebody here who wants to taste it?”

That was all it took for a pair of MBA students to charm their way into some of New York City’s most gilded kitchens.

In the spring of 2017, Hiroki Koga and Brendan Somerville used their newly acquired fruit-importing licenses to escort a suitcase of strawberries out of Japan. The berries would only remain fresh for about 72 hours, and the clock was ticking. Having tasted hundreds of Japanese cultivars to arrive at the ones they’d selected, they felt strongly about the exceeding quality of fruit in their possession.

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[Photo: Oishii]
After the pair made it past each kitchen door, the chefs they met with confirmed their suspicions. These berries tasted more like candy than fruit, and practically liquified on first chew. They were incredible, almost unbelievable. Fresh, locally sourced strawberries are only available in the Northeast for about three early summer weeks each year—and were significantly less drool-inducing than these. So Koga and Somerville wanted to know: How much would the chefs be willing to pay for berries like these—and how frequently—if they were available year-round, from a farm less than an hour away? “Basically everyone said, ‘I want these berries,'” Koga recalls. The figures the chefs provided were encouraging, and the pair walked away from their cold-calling marathon happy.

All that Koga and Somerville had to do now was figure out how to grow a kind of berry that had never been grown before in the United States, using a technique—vertical farming—that had never produced berries at commercial scale anywhere.

[Photo: Oishii]
If you’ve heard of the company the two founded, Oishii, it’s likely because you’re a top-flight New York City foodie, your Instagram explore page leans heavily toward lacquered comestibles, or you’ve stumbled into any number of internet articles about the company’s Omakase berries, which carry a headline-worthy price tag of $50 for a tray of eight. But these strawberries are more than clickbait. They represent a potential breakthrough moment for vertical farms, those carefully controlled artificial environments mostly used for growing leafy greens, and which have been on the verge of becoming a huge industry for more than a decade. They may hold the key to ridding America’s most pesticide-riddled fruit of pesticides, not to mention the unconscionable amount of fossil fuels it takes to grow strawberries year-round with traditional farm equipment and then ship them from California or Latin America. And they are also a stress test for whether the Tesla model of starting with a luxury product before moving to mass market translates across industries.

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Of course, the ability of these strawberries to change the world hinges on whether those outside of New York’s fine dining scene find them sufficiently sexy and delicious.

[Photo: Oishii]
When I first laid eyes on an Omakase berry, I thought it resembled an anime ruby. On taking a bite, I was impressed by its purity and brightness. It was the flavor-promise made by every previous strawberry I’d ever had, utterly fulfilled, and with a subtly insistent sweetness that stopped just short of confectionary. Only after I tried a perfectly fine Driscoll’s strawberry a few days later, though—parsing its comparative dullness with clinical interest—did I understand the degree of difference at play, and what it meant.

There’s a reason that Koga and Somerville were certain they’d attract interest from top chefs with just one taste: Eating is believing. In terminology borrowed from The Matrix, to take the red pill is to discover a vast truth beyond one’s current understanding—and for Americans weaned on U.S. produce, the red pill of a Japanese strawberry can have just such an effect.

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As Oishii’s head of marketing Lesia Dallimore put it, “We don’t know what we don’t know.”

[Photo: Oishii]

The opposite of optimizing

When I ask Koga, 34, for his first impressions of American produce upon arriving at UC-Berkeley from his native Japan in 2015, he smiles, in a vaguely apologetic manner, for what he’s about to say. “I’ll be very honest,” he begins. “I think, for some fruits, California produce is as good as Japan, but for the most part, I was really shocked. And I didn’t even know yet that California had the best produce in America.”

The United States is, as it happens, 25 times the size of Japan, its massive population scattered to the four winds like blown dandelion seeds. Whereas the varieties grown in Japan are “optimized for shorter transportation and for taste,” as Koga says, American farmers grow products in such a way that they can withstand up to a week-long journey to their eventual destination. “So even if they’re fresh in California,” Koga notes, “they’re just inferior.”

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Koga’s authoritative opinions were not born solely out of national pride but rather a career that depended on understanding the relative qualities of produce. Back in Japan, he had been a consultant for Deloitte, helping huge corporations implement vertical farms, which the country had invested heavily in years earlier. The job helped him find something he hadn’t quite realized he’d been looking for. Koga had come of age during Japan’s long period of economic stagnation, which began in the 1990s. The country’s innovative prowess in producing automobiles, animation, and consumer electronics seemed diminished, if not long gone. Koga was determined to help revive the country’s lapsed reputation in some way.

“Growing up, I’d always thought I wanted to take whatever was the best that Japan had to offer and share it with the rest of the world,” he says. Working for several years with dozens of vertical farms, he gradually began to think that what Japan might do best in the world is fruits and vegetables.

Produce occupies an elevated space in Japanese culture. Instead of wine or whiskey, people in Japan often gift each other expensive fruit. As a child, Koga always knew that if fresh strawberries were on the dinner table any given night, it signaled a special occasion, something worth celebrating. Produce in Japan wasn’t just a big deal, though; it was big business. In 2019, for instance, a pair of Yubari melons sold at auction for $70,000 dollars, and a varietal of strawberry called Bijin-hime generally sells for $448 apiece. Only those who reside within unspeakable tax brackets can afford such luxuries, but many in Japan tend to naturally treat fruit as an object of tremendous value. Maybe technology could create a luxury good that isn’t out of almost everyone’s reach.

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[Photo: Oishii]

The farm of the future

The concept of vertical farming has been around for at least a century, in many variations. It encompasses urban vegetation on Brooklyn rooftops, and hydroponically grown marijuana crops in suburban closets. Since the early aughts, however, amid the clanging alarm bells around global climate change, vertical farming has emerged as a more sustainable way to grow produce in increasingly unstable environments. No one can control or even accurately predict the weather, but a well-capitalized vertical farm can hold dominion over every single aspect of an artificial environment, custom-designed to each crop’s individual needs. No pesticides, high consistency, and fully replicable across all geographic locations. It’s a perfect simulacrum of ideal growing conditions; The Matrix, but for plants.

Although commercial vertical farms had taken off years earlier in Japan—where 200 such farms are operating, including category leader Spread, which produces 11 million heads of lettuce annually—the practice only started picking up in the U.S. around the time Koga matriculated at Berkeley.

“It’s just getting to the point where there’s starting to be a steady supply of Americans that are trained up and ready to move into vertical farming,” says AeroFarms cofounder Marc Oshima.

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AeroFarms is among the most prominent of the industry’s major players, along with Plenty and Bowery, in the still-nascent U.S. vertical farming industry. These three companies, who specialize in leafy greens, have each raised more than $500 million in their lifetimes, with Plenty known for its fast food-style branding and Bowery billing itself as the first post-organic farm. Overall the sector is booming in terms of investor interest, though. According to a September PitchBook report, there have been 112 indoor farming deals this year to date, up 15.5% from this time last year, and capital investment has “skyrocketed” 403.4%, to $2.71 billion.

But for all the yearslong hype about vertical farming (buoyed perhaps, in part, by Fast Company profiles), its revenue-generation has not yet grown at a pace commensurate with Silicon Valley’s investment. For example, AeroFarms shared an investor presentation last May, in the wake of having announced plans to go public via a special purpose acquisition company (SPAC) in March. In the document, it revealed that 2021 revenue would be just $4 million and it would lose $39 million this year on an EBITDA-adjusted basis. AeroFarms did, however, project that it would generate $553 million in revenue in 2026 and suggested that its total market potential was $1.8 trillion. A whopping $1.3 trillion of that was fresh produce excluding leafy and stem vegetables.

Vertical farming’s poor cash harvest thus far might have something to do with the industry’s generally limited range of offerings. Conventional wisdom holds that leafy greens are the most reliable, practical starter crops for the technology. Be they lettuce, kale, arugula, or microgreens, they tend to yield the most sellable amount of biomass, and they’re easiest to get up and running. The playbook appears to be: start out with leafy greens, then figure out how to expand to flowering crops like tomatoes and berries. In its presentation, AeroFarms stated that strawberries were “ripe for disruption” and that the company had grown more than 6,000 berry plants during R&D, though it has not gone to market yet. Plenty and Bowery have yet to do so either.

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Therein lies the playbook’s paradox. Vertical farm facilities are expensive to build—AeroFarms reports that its current farm design costs $52 million—and a company can only charge so much of a premium on kale. The gulf between the flavor of industrial or even farmers market kale and the vertically farmed stuff is also not going to be pronounced enough to dazzle tastebuds and open up wallets. By the time an aspiring titan of the industry is ready to sell flowering crops, they’ve already lost tens, if not hundreds, of millions of dollars.

Alternatively, one could simply skip straight to a premium product like strawberries, which Koga refers to as “the holy grail” of vertical farming. “From talking with founders in this space in the U.S., it became very clear to me that I had the most experience in this industry and everyone was just really focused on how to grow leafy greens right,” Koga says. “They had raised so much money, and they had so much pressure from investors to start generating revenue, so I knew that no matter how much time I spent trying to convince them, they’re not gonna ditch all that and concentrate all of their efforts in developing strawberries.”

Going Against the Green

The holy grail reverence Koga conferred upon vertical farm-grown strawberries was well-earned. Strawberries are the third most-popular fruit in the U.S., behind only bananas and apples. The average American eats up to eight pounds of them a year but has been conditioned to accept whatever pesticide-flecked pulp-pebble is available, given the season.

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[Photo: Oishii]
Koga was determined to upend that market, and he did not embark on this quest alone. While his passion for agribusiness made him an outlier at b-school, Brendan Somerville felt the same way at UCLA where he was searching for an idea that could fulfill his beliefs about where agriculture should go. “I was getting interested in what have we fought over in the past, what are we fighting over now, what will we fight over in the future, and a lot of what I was looking at was pointing toward food and water,” he says in an auctioneer-like gust of speech. “I really wanted to help create a paradigm shift in agriculture, and I had been looking at vertical farming. I visited farms and tried the products. I knew this was the future of agriculture. But I just didn’t see a thesis that was taking off and scaling.”

At least, he hadn’t seen one until he met Koga.

Somerville had already been red-pilled by the $3-a-pop Tokyo strawberries, served on a stick like candy apples, that he’d discovered while stationed in Japan during his stint in the Marines. He knew this was the kind of product just about anyone would be able to taste the difference between, given a Pepsi Challenge situation. And Koga was the first person he’d met who had the knowledge and contacts to bring it to fruition (no pun intended). “He has all the strategy about what the vision is,” Somerville says, “and my role is just to make it happen.”

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The duo, who named their company Oishii, the Japanese word for delicious, set about the business of growing fruit that would live up to its billing. They tested their idea on the startup pitch circuit, and were finalists in 2017 in the Global Social Venture Competition, and then won Berkeley’s Launch competition that same spring. They scored these accolades for their audacious faith in getting past the part of the process that had stumped every vertical farmer around the world who tried and failed to grow strawberries before.

[Photo: Oishii]

The Pollination Problem

Unlike leafy greens, strawberries need pollinators to fertilize their plants, a process that extends their cultivation cycles exponentially. Mimicking the ideal weather conditions is challenging, and so is disease management—considering how much longer than leafy greens these crops need to remain healthy for—but high-quality pollination is absolutely essential for making well-formed strawberries that produce high yields.

The primary hurdle in getting bees to pollinate in a synthetic habitat, though, is that bees are not stupid. At least they’re not stupid enough to automatically believe that any artificial environment a crafty farmer places before them is an authentic beehive they happened to find in the wild.

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Some vertical farmers have tried to pollinate their crops by bringing in a bee box, which is just what it sounds like. If this technique has ever produced encouraging results, it certainly hasn’t produced enough of them to reach commercial scale. In order to get to that level, Koga and Somerville would need to trick bees into living in symbiotic harmony within a uniquely convincing bee-Matrix. If they could manage that, not only would the pair be able to grow Japanese strawberries anywhere in the world, they’d have the key to unlock all the other flowering crops as well.

[Photo: Oishii]
After graduation in May 2017, Koga and Somerville raised their first round of seed money—a phrase given extra propriety within this context—and moved from California to New Jersey, where they rented a warehouse space. Although the founders roomed together in a small apartment, they ended up spending a lot of nights crashed out on the floor of the warehouse, duty-bound to a frantic 24-hour deathwatch. They had toted their strawberry plants over from Japan themselves and had no way to source new ones without spending more money and time than they had. Depending on how each plant responded to the environmental conditions the two created in the warehouse—simulating a beautiful day in the foothills of the Japanese alps—they might have to tweak individual elements. The plants were outfitted with sensors to measure temperature, carbon dioxide, humidity, and several other fluctuating factors, all of which would trigger alerts directly to Koga and Somerville’s phones at any hour. Sometimes the pair would find themselves running out to the farm at 3 a.m. for what turned out to be a false alarm.

“By the end of it, we just looked really old,” Koga says.

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All the while, Koga worked his contacts, experts in both academia and business whom he met during his years with Deloitte Japan—partnering with, among others, two of the top vertical farming institutes in Japan. He knew exactly where to look for tips and who to consult throughout every stage of the strawberry production cycle.

Fairly early into the process, the team witnessed a bee landing on one of their flowers, as though it were the bee’s own idea and not, essentially, the result of an insect Turing test. “We all screamed and it was a moment of joy,” Koga recalls. “But then there were still so many challenges. Even if you could land bees on a flower, that doesn’t mean that they would always do it. If bees land on flowers too many times, it gets over pollinated; if they don’t visit the flowers, it doesn’t get pollinated. And when you have tens of thousands of flowers in the farm, and you want them to pollinate every one of them perfectly, it’s just a really rigorous, continuous R&D cycle.”

Ask for the secret that helped them crack the code and Somerville, often easily excitable, turns coy. “I can’t give you the roadmap, but I’ll give you the high level,” he says. “So in one of our farms right now, we have robots driving around, taking millions of pictures of the environment and assessing, like, where are the flowers? How many flowers are there? What are the sizes? What’s the ripeness level? And then they’re communicating with the super sophisticated kind of robotic beehive. And these bees are really happy in this perfect ecosystem, and that enables us to make sure that they’re able to conduct perfect pollination.”

Oishii will not share any more specifics, but a team of mechatronics engineers has since helped automate the tasks that used to be done by the cofounders themselves in the team’s current facility in Kearny, New Jersey, which has five levels of racks, similar in size to other lettuce vertical-farm operations. Their days of sleeping in the warehouse are over.

[Photo: Oishii]

Chefs, retailers, and Instagram influencers

A year and a half after first meeting with top chefs in New York bearing strawberries from Japan, Koga and Somerville returned to the city in the fall of 2018 with their own invention: the Omakase berry. It not only replicated the taste of the berries they’d imported from Japan, but also purportedly took 90% less land and zero pesticides to do so.

The fire-engine red Omakase berries, named after a Japanese phrase that loosely translates to “leave it to the chef,” have a plasticine shine and recessed seeds so deep and evenly spaced they risk inducing trypophobia. They carry a floral perfume that fills a room right away, and yield to even the slightest bite. The sweetness of each berry is measured using the brix scale, with most of them reportedly registering at 13 or 14 brix—more than double the typical strawberry.

People would either talk about the Omakase’s eyebrow-raising $6-per-berry price, or they would talk about the extraordinary taste. But they would talk.

Michelin-star restaurants and high-end retailers were essential to spurring this conversation. Literal tastemakers, their faith in the Omakase berry cosigned its ultra-rare excellence for a tony clientele. The first venues to feature them were restaurants like Chef’s Table and Atomix, the kind of perennially booked-up spots whose menus don’t have prices, and stores like Murray’s Cheese and Eli’s Market, where New Yorkers shop before dinner parties when they mean business. Word about the berries soon rippled through the city and beyond.

“I had heard the buzz about it for about a year and had been wanting to try it but avoided it due to fear of disappointment,” says Neal Harden, executive chef at abcV, the vegan delight from the Jean-Georges universe inside ABC Carpet in New York. “Eventually they reached out to me and I went for it, and I was not disappointed.”

Chef Harden incorporated the Omakase into a variety of dishes: adorning a chocolate mousse; on top of abcV’s coconut chia pudding brunch bowl: and thinly sliced atop an onigiri of shiso and purple yam sticky rice with black winter truffle and mandarin ponzu. Guests soon started seeking out the dishes with Omakase berries by name.

The restaurant Onodera went in the opposite direction as abcV, serving its berries whole for dessert—a culinary showcase not unlike an entire gallery in a museum dedicated to a single painting.

Limited-time partnerships inspired further creative uses for the Omakase. Dominique Ansel, the frequently viral pastry maestro whose concoctions include the Cronut, teamed up with Oishii for a strawberry chiffon cake, while California-based olive oil company Brightland released its Lush strawberry vinaigrette last fall. In both cases, the items sold out instantly.

Oishii soon began to receive requests from diners left wanting more, along with random curiosity-seekers. The company compiled the inquirers’ contact info on a waitlist, notifying each person when there was inventory to unload. There was almost no extra supply beyond what Oishii provided to restaurants and shops, but the company sometimes had leftovers from its bumper crops. With little forewarning, they’d open up shop at the World Trade Center subway stop, selling strawberry trays like Supreme drops.

One day, an enormously popular food YouTuber who goes by Xiaomanyc purchased a tray of Omakase berries and conducted a free taste test for shoppers in Downtown New York’s Oculus. He offered everyone who came by a bite of supermarket strawberries first, followed by a bite of Oishii’s. Everyone appeared to be bowled over by the difference. Eating is believing.

The video attracted a lot of attention, and the company saw a large influx in its social following. “In hindsight, we should have thought to do that ourselves,” Koga says with a shrug.

Many other viral hits from influencers would follow, documenting what Oishii’s marketing team internally refer to as “the OMG experience.” Something about the berries—their hyperreal appearance, exquisite taste, sticker shock (take your pick)—conferred upon them the coveted status of social-media gold. A cashier at Murray’s Cheese, where Omakases sell out of stock every weekend, claims that customers seeking them tend to ask about “the strawberries they heard about on Instagram.”

Oishii has quickly forged the kind of brand reputation that demands a verdict on whether the hype around it is justified, an irresistible pull. People buy or gift the berries and film themselves or someone else enjoying them, and then post the video online. (Oishii’s Instagram Stories are often loaded with these videos.) Part of this inherent shareability is probably due to the fact that eating an Omakase feels like an experience, especially amid the limited options of a global pandemic. During listless days, tasting and debating the quality of primo strawberries might rise to the level of an outing in its own right.

Another critical factor driving demand, though, is scarcity. When Los Angeles-based food influencer Jason Stewart (who’s also cohost of the popular How Long Gone podcast), received Omakases from a friend unexpectedly, he posted an unboxing video to Instagram. He was then surprised by how many fans and friends messaged him about them. “Everyone was jealous that I was the only person in L.A. they knew who had one,” Stewart says.

[Photo: Oishii]

What being the Tesla of strawberries really means

While the Omakase berry’s social media popularity was galvanizing this past spring, Oishii raised $50 million in Series A funding, a signal of how serious the company is about reaching commercial scale, and an invitation for endless publications to dub it the “Tesla of strawberries.”

Koga welcomes the association. He cites how Tesla hit so hard and so early that even as more sporty electric cars emerged after 2011, Tesla’s brand halo has made it one of the world’s most valuable companies as it became more mainstream. At $50 a tray and with limited availability, the Omakase is similar to Tesla’s $100,000 Roadster, of which the company only produced 1,000 in its first generation.

The question this comparison begs, obviously, is what will be Oishii’s version of Tesla’s $70,000 Model S? And what about its $40,000 Model 3?

The Oishii team plans to roll out additional Japanese strawberry varieties at different pricing tiers in the near future. The company is currently developing an Everyday Berry, a still-premium model that won’t be quite as pricey as the Omakase, along with another variety set to compete with typical supermarket fare—which, according to the USDA, as of February, is an average of $2.89 for 12 ounces of strawberries.

In addition, following its pollination breakthrough, the Oishii team is experimenting with a wide variety of fruits and vegetables in its vertical farms, including melons and grapes. Everyone on the team is generally tight-lipped about when to expect which item, although Dallimore lets slip that the next crop will, in fact, be tomatoes. Koga FaceTimed her recently from a cab that he shared with a prototype Oishii tomato. (Reportedly, the tomatoes are “cute,” and could be available as soon as next year.)

According to Somerville, each new fruit or vegetable that the company introduces will follow the same tiered-pricing model that Oishii has planned for its strawberries. “Unless we’re proven that the roadmap for strawberries does not work for these new crops, then that’s exactly the strategy,” he says. “You launch with that super-premium, Omakase-level product, you introduce it to a market which truly understands it, you build this kind of following around it, and then deploy your next varieties.”

Oishii doesn’t seem to be in a rush to introduce any new items, although it debuted First Flower Berries in September—slightly larger, slightly pricier strawberries ($60 for eight) that mark each plant’s first harvest. The company’s leaders don’t want to risk jeopardizing the current quality of its flagship product after all this work by doing too much too soon.

What the team is more excited about is furthering its current success by opening up more of its unique vertical farms in other areas. First up is a Los Angeles branch, which the company announced in mid-October, providing enormous relief for a California foodie community that has, until now, been forced to watch the Oishii saga unfold entirely over social media on the opposite coast. The berries were first made available at Destroyer Culver City—a hip, Scandinavian-inspired brunch spot—and will eventually be delivered directly to customers’ doorsteps.

After California, the sky’s the limit. Or rather, it isn’t. One of the central benefits of vertical farming is it can be done anywhere in the world, no matter what’s happening in the sky. “The heavy lifting is already pretty much completed,” Koga says. “We know the recipe, we know how to grow these strawberries consistently at a large scale, so it’s really just a matter of printing the same thing anywhere there is demand. And when I say ‘anywhere there’s demand,’ there is demand in almost all of the major cities. We’re getting inquiries every single day from someone around the world that wants to partner with us to bring our berries out there. So it’s really just a matter of how quickly can we assemble the right team to execute on this. I cannot guarantee we’re going to have a hundred facilities by year XYZ, but we’re not talking about 10 years, 20 years; we will most likely build the first farm outside of the U.S. in the next 12 to 24 months.”

Koga seems as confident about Oishii’s future as he had been about the demand in New York City for premium strawberries—and his ability to grow them in vertical farms. He and his partners are now positioning the Omakase berry as merely the centerpiece of Oishii’s Extended Produce Universe. All that matters now is whether everyone who’s visited the world he created so far will want to live there.

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