A Profitable Microgreen Business at home in 2023

Starting a profitable microgreen business at home has never looked more appealing than now! In recent years, microgreen business has evolved at a rapid pace in South Africa. But once you start your research, you’ll end up with even more questions.

Is it profitable to grow microgreens? Is it hard work? How many square meters (feet) do you need to start? What is the best option? Can you do it in small scale or is this something for mega farmers only?

In this article, we will cover the lucrative business venture of microgreens in South Africa. We will dissect what the most profitable crops are, the start up costs, growing space you need, potential buyers, and how building a microgreen urban farm can impact the local community.

The most profitable microgreen crops

A profitable microgreen business in South Africa, as in any region, can vary based on factors such as local demand, market prices, and production costs.

However, certain microgreen crops tend to be popular and potentially more profitable due to their culinary uses, nutritional value, and market demand.

Here is a list of profitable microgreens

• Basil Microgreens:

Basil microgreens are known for their intense flavor and are often used in salads, sandwiches, and garnishes.

They are popular in various cuisines and can command a good price due to their unique taste.

• Pea Shoots:

Pea shoots have a fresh and slightly sweet flavor. They are versatile and can be used in salads, stir-fries, and as a garnish.

They are in demand for their tender texture and nutritional value.

• Radish Microgreens:

Radish microgreens have a peppery taste that adds a kick to dishes.

They are commonly used in salads, and their vibrant colors make them visually appealing as well.

• Sunflower Microgreens:

Sunflower microgreens have a mild, nutty flavor and are often used in salads, wraps, and sandwiches.

They are rich in nutrients and can be popular among health-conscious consumers.

• Arugula (Rocket) Microgreens:

Arugula microgreens have a peppery and slightly spicy flavor.

They are well-suited for adding flavor to salads, pizzas, and other dishes.

• Cilantro (Coriander) Microgreens:

Cilantro microgreens have a strong, aromatic flavor similar to the mature herb.

They are used in various cuisines, including Mexican and Asian dishes.

• Kale Microgreens:

Kale microgreens are nutrient-dense and have a milder taste compared to mature kale.

They can be used in salads, smoothies, and as a nutritious topping.

• Beet Microgreens:

Beet microgreens have a mild, earthy flavor and are often used in salads and as garnishes.

Their vibrant colors can make them visually appealing.

It’s advisable to start with a diverse selection of microgreens and experiment to find the right balance of profitability and market demand for your specific location and customer base.

Conduct thorough market research, engage with potential customers, and adapt your crop selection based on feedback and trends.

The Start-up Costs

The first step is to determine if you need any capital to invest in the business. To determine if microgreens are profitable, you need to work out your start-up costs.

In my experience, capital is always required, it’s only the amount that differs.

There are a few factors to consider that will help you to determine the total amount of capital needed to invest for your start-up. These factors include:

The factors that you need to determine;

Growing Space

The choice of your growing space will greatly influence your startup costs. If you’re starting small, you could potentially use a spare room or a corner of your home.

Because microgreens are tiny plants, they don’t require a lot of growing space. We started growing our microgreens on a single rack with 3 rows, that spanned a total of +/- 3 square meters (32.29 square feet).

The costs may involve minor renovations, such as installing shelves and setting up grow lights.

For a larger operation, renting a greenhouse or commercial space might be necessary, and this could involve higher rental fees, construction to adapt the space for growing, and potentially more advanced climate control systems.

The initial investment for a smaller setup might be around a few thousand ZAR (rand), while a larger operation could require tens of thousands of ZAR (rands) or more.

Equipment and Supplies

There is a list of equipment/supplies you require to start growing microgreens. First off, you’ll need trays, growing medium, seeds, and a decent irrigation system.

Basic trays and supplies for a small-scale operation might cost a few hundred to a thousand ZAR (rand). This will depend on the type of tray and irrigation system you decide to choose from. Some trays offer a “water bath” system, where the kit consists of two trays. The first is a tray with no holes, the second is the planting tray with holes on the bottom.

You can then water the greens from the roots by adding water to the bottom tray and placing the second tray (with the holes) on top (or inside) of the first tray. The water will be absorbed from the bottom preventing mould on your young plants.

We’ll have an in-dept look at the different type of trays in our next blog.

Remember, if you plan to scale up, you may consider investing in more advanced equipment like vertical farming systems, automated irrigation, and environmental control systems, which could increase your costs significantly.

Seeds

The cost of seeds varies depending on the type of microgreens you choose to grow.

Some seeds, like basil or sunflower, are relatively affordable, while others, like pea shoots or radish, can be more expensive.

A rough estimate for initial seed purchases might range from a few hundred to over a thousand ZAR (rand), depending on your selection, the scale of your business and the seed supplier you have.

Packaging and Marketing Materials

Packaging forms part of your marketing. The packaging you choose is a vital part of maintaining the freshness of your microgreens. It also attributes to the presentation of the microgreens.

Costs to consider can include containers, labels, and other packaging materials.

Additionally, you might want to invest in marketing materials like a website (for online orders), flyers/product brochures, business cards and possibly banners (if you sell at farmer’s markets)

The packaging costs can vary significantly, but you might allocate a few hundred to a couple of thousand ZAR (rand) for this aspect.

Labor Costs

Your chosen business model will determine your labor costs.

If you’re operating on a small scale, you might handle most tasks yourself, but if you’re planning a larger operation, you’ll likely need help.

Labor costs could include wages, training, and potentially benefits.

It’s essential to determine whether you’ll need full-time, part-time, or seasonal employees and budget accordingly.

Permits and Licenses

The cost of permits and licenses can vary by location and the specific regulations governing food production and sales in your area.

You might need licenses for food handling, business operation, and potentially health and safety inspections.

It’s advisable to consult with local authorities or a business advisor to estimate these costs accurately.

Initial Inventory

When you start your microgreen business, you’ll need to purchase an initial inventory of seeds, growing medium, trays, and other supplies.

The cost of this inventory will depend on the scale of your operation and your chosen microgreen varieties.

Budgeting a few thousand ZAR (rand) for your initial inventory is a reasonable estimate.

Marketing and Branding

Building a brand and attracting customers is crucial for the success of your microgreen business. Taking hands with a brand strategist and creating our brand was one of the most rewarding things we could have done.

The costs for marketing and branding activities can include brand guide creation, website development, social media management, photography, and design work.

Depending on the complexity of your marketing strategy, you might allocate a few thousand to several thousand ZAR (rand) for these efforts. Please remember that most of these marketing strategies include a recurring expense.

PS: We did not create our brand immediately when the business was started. It was a gradual grow, until we could afford it. But I would recommend setting capital aside specifically for this. As it has helped us in identifying our why, what, who and how.

Transportation and Delivery

If you plan to deliver your microgreens to customers, consider the costs associated with transportation, such as fuel, vehicle maintenance, and packaging for deliveries.

These costs can add up over time and will depend on your delivery radius and frequency.

Contingency Fund

It’s wise to have a contingency fund to cover unexpected expenses that may arise during your startup phase.

This fund provides a safety net for unforeseen costs, ensuring that your business can continue to operate smoothly even if you encounter challenges.

Allocating a percentage of your total budget, perhaps around 10%-20%, to a contingency fund is a prudent approach.

We have tried and tested the profit-first approach and have not yet been disappointed with the freedom it has brought.

Business Registration and Legal Fees

Registering your business and obtaining any necessary licenses might involve fees.

Additionally, consulting with legal professionals to ensure compliance with regulations could incur costs.

Depending on your location and the complexity of your legal requirements, you might allocate a few thousand to several thousand ZAR (rand) for these expenses.

For a small-scale microgreen farming operation, you can start with a relatively compact growing space that can be set up in your home, a small room, or a dedicated corner of a larger space.

Some options to consider for the type of growing space you want

Indoor Shelving or Tables

You can use shelves or tables placed near a window with good sunlight exposure or under grow lights. This is a simple and cost-effective way to start growing microgreens.

Grow Racks

If you’re looking to optimize space and control lighting conditions, invest in grow racks with adjustable shelves. These can accommodate multiple trays of microgreens vertically, maximizing your growing area.

Hydroponic Systems

Hydroponic setups allow you to grow microgreens without soil, which can save space and simplify maintenance. These systems can be set up indoors and can be ideal for limited spaces.

Vertical Farming

Vertical farming systems, such as vertical towers or wall-mounted systems, allow you to grow microgreens vertically, utilizing wall space efficiently. These systems often have built-in lighting and can be a great choice for small spaces.

Greenhouses

If you have a small backyard or outdoor space, you might consider setting up a small greenhouse. This allows you to have a controlled environment for growing microgreens, with better temperature and humidity control.

Grow Tents

Grow tents provide a controlled environment and are available in various sizes. They are easy to set up indoors and can help you create an optimal microgreen-growing environment.

Shipping Containers:

Some small-scale growers repurpose shipping containers for microgreen farming. These containers can be customized to create a controlled indoor growing space.

Factors to consider when designing your growing space

Lighting

Microgreens require adequate light. If natural light is insufficient, invest in high-quality grow lights suitable for plant growth.

Ventilation

Proper air circulation is important to prevent mold and ensure healthy growth. Adequate ventilation or fans may be needed.

Watering and Drainage

Ensure your setup allows for proper watering and drainage to prevent overwatering or waterlogging.

Temperature and Humidity Control

Microgreens thrive in specific temperature and humidity ranges. Depending on your location, you might need to use heaters, humidifiers, or dehumidifiers to create an optimal environment.

Workspace and Workflow

Design your space to accommodate tasks such as seeding, harvesting, and packaging. Ensure you have easy access to your growing trays or containers.

Remember that the type of microgreens you choose to grow might also influence your setup. Some microgreens have specific environmental requirements, so research the ideal conditions for the varieties you plan to cultivate.

As your business grows, you can consider expanding your growing space or investing in more advanced equipment.

The potential buyers of microgreens

The pool of potential buyer varies from health-conscious consumers, to chefs and the farmer’s market. Here is a list of potential buyers, that could get you started on selling microgreens:

Restaurants and Cafes

Local eateries are often interested in sourcing fresh and locally grown microgreens to enhance the flavor and presentation of their dishes. Establish connections with chefs and restaurant owners in your area.

Farmers’ Markets:

Selling directly to consumers at farmers’ markets can be a great way to build a customer base. Many health-conscious shoppers frequent farmers’ markets and are interested in fresh, nutritious produce like microgreens.

Health Food Stores and Specialty Grocers

Health food stores and specialty grocers often cater to customers seeking organic and unique products, making them potential buyers for your microgreens.

Online Platforms

Create an online presence through social media platforms or your own website. This allows you to reach a wider audience and sell directly to consumers who value locally grown produce.

Community Supported Agriculture (CSA) Programs

Consider partnering with or starting a CSA program, where members subscribe to receive regular deliveries of fresh produce, including microgreens.

Local Caterers

Caterers who provide food for events and gatherings may be interested in adding microgreens to their offerings for an extra touch of freshness and flavor.

Grocery Store Chains

Some larger grocery store chains might be open to sourcing microgreens from local producers to offer customers a wider selection of fresh produce.

Juice and Smoothie Bars

Microgreens can be a nutritious addition to juices and smoothies, making juice bars and smoothie shops potential buyers.

Cheese and Wine Shops

Shops specializing in artisanal cheeses and wines might show interest in pairing microgreens with their products.

Health and Wellness Centers

Healthy eating promotions often attract interest from yoga studios, wellness centers, and health retreats, which may consider sourcing microgreens.

Educational Institutions

For educational purposes or inclusion in student meals, schools, colleges, and culinary institutes might express interest in purchasing microgreens.

Local Community Programs:

Collaborate with local community programs, food banks, or nonprofits that focus on food security and healthy eating initiatives.

When approaching potential buyers, it’s important to highlight the unique qualities of microgreens, such as their flavor, nutrition, and versatility.

Build relationships with your customers, offer samples, and be open to feedback to ensure a successful partnership.

Additionally, consider reaching out to local chefs, attending networking events, and participating in food-related expos or festivals to connect with potential buyers in your area.

The most important factor of building a microgreen business is the impact it will have on your local community. By utilizing a little space, in your local area, you could grow trays of microgreens, make good money and cultivate future local growers.

How a microgreen urban farm impacts the community

Building a microgreen urban farm can have a positive and multifaceted impact on the local community in several ways:

Access to Fresh, Nutrient-Rich Food

Microgreens are highly nutritious and can provide a local source of fresh produce to the community. By growing microgreens locally, you contribute to improved access to healthy food options, especially in areas with limited access to fresh produce.

Supporting Local Economy

Microgreen urban farms create job opportunities, from cultivation and harvesting to packaging, distribution, and sales. This can help stimulate the local economy and provide income for community members.

Educational Opportunities

Urban farms can serve as educational hubs, offering workshops, tours, and programs to teach community members about sustainable farming practices, nutrition, and healthy eating habits.

This knowledge can empower individuals to make informed food choices.

Green Space and Aesthetics

Urban farms contribute to the beautification of neighborhoods and can transform unused or vacant spaces into vibrant, green areas. This can improve the aesthetics of the community and create a sense of pride among residents.

Environmental Benefits

Microgreen urban farms often use sustainable and organic farming practices, such as composting and water conservation.

These practices can help reduce the environmental impact of food production, promote biodiversity, and improve local soil quality.

Community Engagement and Social Cohesion

Urban farms can become community gathering spaces, fostering social interaction and a sense of belonging. People from diverse backgrounds can come together to work on the farm, share knowledge, and build relationships.

Local Food Security

Microgreen urban farms contribute to local food security by reducing reliance on distant sources of food. In times of disruptions to supply chains, having a local source of fresh produce can provide a buffer against food shortages.

Entrepreneurship and Skill Development

Urban farming encourages entrepreneurship and skill development.

Community members can learn about business operations, marketing, and sustainable agriculture, potentially inspiring individuals to start their own small businesses.

Health and Wellness

Microgreens are nutrient-dense and can support overall health and wellness. Increased access to fresh produce can contribute to better dietary habits and improved health outcomes within the community.

Partnerships and Collaboration

Urban farms often collaborate with local schools, nonprofits, and organizations to address various community needs.

These partnerships can lead to innovative initiatives that benefit residents.

Reducing Food Waste

Urban farms can utilize organic waste from the community, such as compostable materials, to enrich the soil and reduce overall food waste.

Showcasing Sustainability

Microgreen urban farms can serve as models of sustainable and regenerative agriculture, inspiring residents to adopt more eco-friendly practices in their own lives.

Overall, it can create a positive ripple effect that extends beyond just food production. It can enhance community well-being, promote environmental stewardship, and foster a sense of unity among residents.

So, whether you decide to build a side hustle, grow as a sole proprietor or a commercial grower, the possibilities are endless. Ultimately, you can start a profitable microgreen business Decide on your business model, do some market research, crunch those numbers and become a successful grower today!