Efficiency, then Sustainability with Praveen Penmetsa, Monarch Tractor

Hey listeners, have you heard of the term "brand differentiated commerce?" Probably not, since I made it up chatting with the folks at Offset about what they do. Offset is a proudly independent wine commerce platform and brand studio rolled into one based in wine country. Their platform Offset Commerce has been shaped by listening to smart wine businesses over the last 16 years. And unlike other platforms on the market, it empowers individual wine business models rather than a one-size-fits-all approach. That's why iconic wineries and merchants, like Larkmead vineyards, kill Cita Creek and Kermit Lynch wine merchant, trust Offset Commerce to handle the unique ways in which they sell. Go to OffsetCommerce.com to learn more. That's OFF-SET-commerce.com to learn more. Welcome to X-Shatto. X-Shatto. The podcast that navigates the business of wine with unique perspectives and insights. With your host Robert Vernick and Peter Young. Welcome to this episode of X-Shatto. Today, our guest is Pervine Panmezza, who is the CEO of Monarch Tractor. And we're going to be continuing our series with him on "Vidaculture and Winemaking Tech" with a revolution in tractors. Pervine, welcome to the show. Thank you for having me. Can you please give me and Peter a brief overview of your background? So I'm Pervine Panmezza. I'm currently the CEO at Monarch Tractor. He started my life off as a mechanical engineer who was very much into fast cars. I was very lucky to have worked on electric cars early in my life and also robots and battery systems. And that's when I had the idea that if we can bring all of those to farmers who much needed these technologies, we can actually make a big difference. And saw that as a global problem, not just a california problem. Farmers around the world were struggling with high energy costs. They were struggling with labor automation. They were struggling with data and using data to increase their profits. So all of that led us to start Monarch in 2018. And we currently have machines out 10 farmers hands and our machines are on four continents. And today we also allow other companies to use that technology to deploy their own machines as well. And so in terms of fun, it's that you're like into fast cars, but then you joined the tractor company. So I am just curious how fast the monotractors can go. A lot of my friends still give me a lot of grief for it. That I went from building 200 mile per hour supercars to 20 mile per hour tractors. That answers the question of how fast our tractor goes. So can you give us an overview of monotractor and everything that is under the umbrella? Yeah, monotractor is one of its kind company in the whole world. We today are the only company that is actually building smart electric machines for farmers around the world that you can actually buy. So today what we do is we not only sell our monotractor machines. We also have a fair number of partners that we work with. We use our technology. And what we are allowing all of this to happen for farmers at the end of the day is how can farmers basically increase efficiency by reducing costs and how can they make more money from what they already have which is how can they get more value for the crop and using how they do operations on the data side also can result in more revenue opportunities for farmers. So we are trying to do that using our machines. So farmers say of 7 to 12 dollars an hour using the monotractor just on diesel versus electric savings. On top of that because of the data that we collect they get incentives from state governments, from their customers, from the federal government, etc. And also the attractor gives them data on like things that they could be doing more efficiently as well so that they can not only make more money on one side but they can also reduce costs on the other side of how can they be more efficient with operations. So when it comes to vineyards specifically what does monotractor provide as a solution? Is it just a tractor or is their software associated with it when you talk about seeing what they can do and optimizing, etc. Yeah, so because we're a smart machine our job one is to electrify certain operations on the farm just like a normal tractor would. So once they buy our smart electric tractor they get to do things like all the other operations that they would do with a normal tractor it's the same thing with our tractor. So that's the electric part. So that's how most customers start the journey off with monark is they start using it just as a electric tractor diesel savings immediately all right again I was just looking at the diesel price today it's back up to like five and a half for like premium gas. So diesel savings on that side and number one number two is as they start using it they also get the benefit of our smart platform and that's immediate right in the sense like if they have a problem with our tractor they can actually submit a ticket on our smart screen somebody will immediately reach out sometimes we can fix problems remotely. So these are all the benefits of having a smart machine. So it's not just about data that we collect it's also about like being faster in terms of fixing issues they've also made our machine constantly better. So we released for the vineyards we released features like row follow after they bought the machine where the driver can now hit row follow while they're in the middle of a row and the tractor will self-steer and auto correct and make sure that it's self-centered inside the row. So those are the smart features and then the third part is because we have an app they can actually see whether our tractor is charged how much charging is there is the operator actually driving the tractor and doing things or etc etc right so all those three that's the usual journey that we take our farmers on and can they control the machine from the hub there are certain things that you can control absolutely right so and we're constantly increasing those kind of features so for certain farmers who meet our criteria of like how certain row widths with certain attachments they can actually do some not only a row follow but also they can use features like autonomy etc but again that's very much we're piloting those things right so not all of our vineyard customers can use it there are certain select ones for using it right. In monarch cells as you said farmers in general not just vineyards what crops is it used for today and how big is a vineyard business relative to other crops. Yeah so when we started monarch our focus was specifically on vineyards so our first 100 plus machines went to vineyards today we sell to dairy farms around the country it's actually quite surprising the sense like the dairy farmers and the nappest and homo vineyards are vineyards don't buy the same tractor today but again right because our value of our machine is not just on the hardware but on the software side they buy our machine. Hardware dairy farmers use it sorry I'm curious because they're not a harvest something to harvest. I mean I guess no kidding cows. Exactly so dairy farmers have things like tractors they have skin steers etc and what they do with them is one of the operations that they do every day 24/7 every day of the year is they do an operation called feed pushing where they basically use the tractor with a blade in front of it to push feed to the cows that has to happen every two three hours day and night throughout the whole year so what we have done with the monarch tractor is we have an attachment in front of a tractor with a blade we're also starting to automate it for outdoor farms so now the farmer gets to save money because that's an operation that they can start to do it heartily and they can just watch their tractor so that's the reason why the dairy farmers are very interested they also use the tractor for example to clean the bunks with the blade in the front they use it to haul some of the calf around so just like a lot of other farmers the tractor is a multipurpose device so they use it for like four or five different things on the farm they use it for hauling they use it for have transport so a bunch of different things like that so the dairy farms is a second big industry we're also on a few orchards you know apple orchards a few citrus fruit etc so those are basically our main markets but we are now expanding into even people with solar panels on their farms are using our tractor because our tractor is narrow we fit between the solar panels we can manage the mowing between the panels etc so those are the three kind of things horse ranches are buying our tractor but vineyards is still the number one market yeah if you look at the number of machines that are out in the field vineyards is number one number two and increasing fast is their dairy market and then we have orchards horse ranches etc that are also using our tractors and you mentioned that the tractor is narrow how narrow is it relative to vine spacing because in vineyards vine spacing can vary quite a bit if you get a few feet so like you know eight or ten feet exactly so we went to a lot of trouble to make our tractor as narrow as possible so we fit in like five foot rows four foot rows are hard for us the tractor does not fit but also when it comes to automation and stuff I know we need at least six seven foot rows where the good turn around distance at the end so that the tractor can make a eukon without the driver but to answer a question we fit in like five foot rows with manual drivers today and you mentioned that you're in four continents today how big is monotractor in the us versus internationally most of our sales are actually in the us side internationally what we're doing right now is we're doing pilots and then we're looking for partners there so that we can put our technology onto our partners machines also to address some of the international markets so but most of our commercial sales are all us that being said our tractor can be found in Europe where we're doing pilots our tractors are in Taiwan because it's a smart tractor it was easy for us to change all the language on the tractor tractors are in India so the area via New Zealand so yeah what are the core benefits of the monotractor solution I know you mentioned cost and the rising cost of diesel versus electric but specifically for vineyards I guess because that's what our audience cares about mostly in terms of the wine industry what do you you see as the top benefits. - Yeah, the big one, like I said. is especially Veneer is the narrow tractor platform really helps number one. Number two is we can help the Veneers actually which from the old school devices to electric devices, which also then reduces their diesel consumption even more. So on the Veneer side, the fact that they can get a day and night support is a big advantage. They can use our tractors to power nighttime lights, night operations, a few of our customers last year used our tractor to basically do over their lights during the night harvest, right? So using a generator and a tractor on top. So that was a big advantage on that side as well. And so you're talked a little bit about quality improvement as well? Yeah, and the big advantage is also the fact because it's electric tractor, right? It's easier for the operators to use. Our tractor can actually, our tractor training takes a lot less. So that's a big advantage for the Veneers. It's when they have a new tractor driver. It's easier to train them on our tractor than the other tractors our tractor is safer from that side. Number one. Is it due to the automation or what makes it easier to drive your tractor versus diesel powered? Yeah, so diesel tractor itself like 20 controls, right? You can have to like adjust everything manually. And you have no idea what your tractor driver actually set it to when they did the operation. In our tractor, because we have a smart screen, now we actually you can see what settings the driver actually used when they did the operation. You can actually follow the operation on the screen to see whether they did the complete block or did the Mr. Row. Those are the kind of things that actually make it a lot more efficient for the supervisors to know that things are being done the way they want it to be done. What speed did they run it at? You can actually check the speed on our tractor remotely without having to visit the vineyard and make sure that the driver is following on instructions. So those are all things that help the saver supervisors kind and running around from farm to farm in a pickup truck or so just looking at it and saying, yeah, tractor's moving the right speed. Let me check. Yes, you know, they are doing this operation on the right settings on the three point hitch or, you know, what does the video look like on the more, etc. And what about environmental impacts? I know that's a big topic with a lot of wineries in terms of being more holistic for the environment. Oh, definitely, right. I think we also allow the vineyards to basically reduce their carbon emissions using our machine. So that's a big win. What I mean by that is it's not only about diesel savings. It's also the fact that they can say and we measure the CO2 of carbon that we are displacing each time they're on our tractor. So that number is published to our customers since I the app. So once they see that they can actually use that back to their customers and say, hey, for your prop, this is how much we saved on carbon emissions. Number one, also because of that they get a lot of subsidies from the state and the federal side. So our tractor is a lot cheaper than some of the diesel tractors. A lot of our vineyards purchase our tractor for a lot less than what they would pay for a new diesel tractor. And then what about labor? I mean, obviously labor shortage is in cost of labor. Something that's often talked about, especially in California. How does that impact labor for the vineyards? Yeah, so the labor side is quite a challenge, right? One of the reasons why we are trying to increase the automation of our tractor is to make it easier for the labor and be more efficient. What I mean by that is the labor has to be, how can we do more with what we have? It's a big part of it. So the driver is interested in on the tractor or getting fatigued, right? Or because the high temperature is having to come off the vineyard. Those are all things that we're trying to address with our automation, especially for the vineyards that meet our criteria on the road spacings and the turnaround spacings. And if they are doing a lot of mowing, which is what our first operation is, we can actually help save on labor costs as well. Also, we are working with partners like AgScoot, which is a sensor company that is in Napa Sonoma. So we can integrate their sensors and then provide their data back to the farmer without them having to do additional cost of data collection, right? So this is all we're also using the tractor as a data platform and they can now use AgScoot technology on top of our tractor to say, okay, where should I actually focus? Where should I apply more? Or utilize their, which part of my block is not actually producing that I need to go address. So they get to use that our partners technologies on top of our tractor for lower cost. Whereas today, otherwise they would have to put that tech on a UTV or another tractor, have somebody go drive it to collect data, etc. Without a tractor, they can just attach it and they get that data. In terms of automation, in terms of autonomous, let's say actually more specifically autonomous driving, what if that is permitted? What's the, the gallery in that area? Because I know from speaking in San Francisco with Waymo, there's lots of approvals that have to happen, but how does that work on someone's own land for what they want to do autonomously? Yeah, that's a great question and there's a lot of like misinformation around that right when it comes to especially farm automation. So a big things is also monarch played a pivotal role in convincing Kalosha that we should allow these in places where there's no people around. For example, you can totally run our tractor. We have some procedures where you have to put signs up saying that there's an autonomous tractor running. Make sure that there's no people inside that block and then you can run our tractor autonomously. There's nothing stopping California farms from running that. And also interestingly, that's a very much a California law. If you go outside California, there's no laws on on farm autonomy. I'm not talking about public roads and specifically talking about farmers being able to use this technology on their farms. There's no legal issues with that. We also got that notification from Kalosha, right? So they're very supportive because for them, if they see it as a benefit for worker safety, there's no worker on that block. As long as you have the right signage California, it's legal on your own property. It's on Chicago, not public. Signage, training, no labor inside that block. And then outside of California, it's kind of a gray area. There's no laws against it, but there's no laws for it. Correct. Yeah, outside California, there's no laws saying that there's no laws on automation. So when our customers in other parts are using our tractor autonomously, no issues at all. And even daily farms inside California using our tractor, you know, they follow the signage, they follow the training and they make sure that there's no people inside the lanes where our tractor is operating. Yeah, I mean, I've got to say that having unpop, less populated areas with people makes it a lot easier to kind of get approvals for that. And curious, if you have like one or two anecdotal case studies from your customers in the vineyard space that you think showed the biggest benefit or use case that our listeners would be interested in hearing. If you could share one or two, that'd be great. Yeah, no, the great thing about our tractors is very often we are tracking like who's using them, how much we're using them, etc. Right. So every day we check the usage and vineyards like, you know, they're not, they don't use the tractor every day of the year. Right. They're off seasons, they're on seasons, they're times when it's being used continuously, they're times when it's part. So what we're hearing from our customers is, you know, definitely was our first product. So, you know, some of our early customers had to work through some of the challenges of using a new product. But today, I was looking at the hours report in the morning, we have customers 50 plus customers were running our tractor in the vineyards yesterday. Right. And some of them had like 30 plus hours on our tractors, which is crazy if you think about it. Right. So they have multiple tractors and they're using them. Right benefit that they see is number one, the electric side savings number two is the fact that they get to use the zero carbon benefits. A lot of organic vineyards also want to reduce their fuel consumption. So the fact that they're able to do that is a big win for them. And again, our tractor is not only lower cost to operate, but in many cases, thanks to the data and the subsidies that we're able to provide is lower cost to purchase as well. And the last one that they like is, you know, they can actually remotely send us a request saying that, hey, this is what the tractor is doing, can it help us? And we can actually remotely fix our tractor. So those are some of the big ones that we often hear are those three things. So you're like on star, on star for the mission for tractors when they have an issue, you can like they can push a button and you guys can go help them. Exactly. Yeah. And you mentioned subsidy. So how is your solution price? What's the regular price and how much do subsidies impact that? So our regular price of the tractor is like $90,000 roughly. And then there's options and subscriptions and accessories along with that. But the subsidies today are very helpful in getting the cost of the tractor down by anywhere from 20%, 20%, 20%, 20%, 70%. So but again, it's very much a first come first served. So people need to kind of opt in and we are always ready to help them do the paperwork so that they don't need to deal with it. So almost all of our vineyard customers, we helped them with our paperwork. We put the programs in place and we made it very easy for them to access the subsidies. Whereas in the past, those subsidies were quite hard to access because you had to get rid of one tractor and then do this paperwork wait for five months. We took all of that out and the monarch actually has a government team that works with our farmers to help them access these subsidies easily. And are the subsidies being maintained? We know that in the current political administration, a lot of subsidies for green or sustainability projects are being pulled. Does that impact this tractor at all? There is an impact right? Unfortunately, there's no at a federal level. Yes. The state is still 100% committed. So on the state side, we are seeing continuous program. But the program is more and more competitive. What I mean by that is the state also wants to make sure that the farmers initially get a lot more benefits. So the farmers who opt in, the early adopters get the bigger benefit subsidies. So that's an important takeaway. But as we go forward, we are also looking at new programs, etc. So if any farmers are interested, they should reach out to our teams and we can bring our team and we are also helping them not only on the tractor cost, but also with regards to the cost of the charger. And we need to upgrade their electrical circuit. We help them get the subsidies for that. If they are deploying any solar on the farm, we have programs that tie the tractor and the solar together that helps them get even more benefits. the farmers should not think of this just as a factor. for subteriors, but the whole system can be subsidized and we can help with that. - Endumeost farmers need to have a service upgrade on their electrical system for the charging infrastructure? - Most of them actually don't, right? They can run an air compressor or a welder, they can use our charger right away. But some of our farmers who have like 5, 10, 10 plus tractors, those are the ones that are looking at service upgrades, if you have 10 plus tractors, then you do need to make sure that you have the right amount of service from your local utility company. - And is the charger like an electric car charger or is it a different one, a custom? - Yeah, no, it's the same exact charger. So the great thing is some of the wineries, right? If you have electric charging for your customers and their electric cars, it's the same thing that can also charge the tractor or wastewater. So it's a good joint benefit and we can help them get subsidies to deploy those chargers as well. - And are you guys using like the common car standard? Is it like the Tesla or is it the other three button one? - Yeah, it's the other three button one. So it works with, like I said, it's a really common one and the farmers can buy the chargers and then use the existing chargers as well. - Yeah, so if you go to visit one of those wineries as you pull up to try to charge your car, there'll be a tractor there instead. (laughing) You can also use that tractor to charge your car. It's also a benefit, and real life is our tractor. Not only acts as a tractor, it also acts as a generator, right? So because we have a big battery, you know, if your electric car is not enough charge, you can take the charger from your car, plug it into our tractor and our tractor will charge your car. So it's just curious since we're talking about what is the range on a tractor 'cause it's so much smaller than a car and but you said it has a big battery. Like what is the mileage range? - So when it comes to hours of usage, like some of our daily customers see like 10 to 14 hours of usage but they're using it mostly for pushing. When you do things like mowing, et cetera, you'll see anywhere from eight to 11 hours of usage, but if you start doing any heavy land operations, it'll come down from there. What our goal was to make sure that even with those heavy operations, you still get four or five six hours so that you can get through a shift, right? And then you can charge your tractor and charges again in like under six hours and then off you go. Again, $7 to $12 an hour of savings, right? Where else can you find $7 to $12 an hour of savings where we all use the tractor? So that's a big win. - And a lot of smart devices have the upfront cost to purchase the device but also like a monthly or annual charge ongoing after a subscription basically. Is that apply here as well? - Yes, it does, right? And so we have a subscription charge. But again, because the data that we collect, our whole goal is how can we use this data to kind of get benefits for the farm or some of this day because of the data that we collect, we're able to get some subsidies for them. So it kind of offsets the connectivity charge to the right that we have the subscription cost. So some of our early customers, they got the subscription cost because of the state incentive it was covered by the state incentive on the subscription charges. But going forward, as the farmers get to get more and more benefits, they have different levels of subscription charges. But they can also use the tractor without any subscription if they want to. So we are not trying to tie them down by any means. - And you mentioned the subscription is to collect the data is that like a connectivity, like a cellular charge or is it more of like a software thing or both? - It's basically both. So we have a cell connectivity charge, certain customers are using the economy in remote areas, we have a Starlink charge, we offer Starlink as an option, right? Which is great for farmers. And then there's a software subscription charge as well that is not related to the connectivity. So it's both those. - And most of the farms, they're tied into the electrical grid, right? So it's what's charging is solar panel, local solar panels or something from the grid, which has some level of renewable energy into it. It's not like farmers with like a diesel generator or something very charging. - Yeah, I mean, when we started the company, Peter, a lot of farmers were just had a little bit of connectivity. But in the last five, six years, what we have seen and it's increasing very fast right now, is a lot of farmers and operating on their own solar panels. Because there's a lot of programs where the farmers can actually get to make money from the energy side. And also the costs of solar health increase, especially in certain states, so not solar, the cost of the grid electricity has increased in certain states, right? Like in California, I pay a lot on my house for energy, right? So there is incentive for farmers to actually deploy solar. The programs for farmers are very different to you and me as homeowners. And they actually get much better programs where they make more money from putting that energy back into the grid. And also using it to power things like our monocractor or their wineries or some of the other operations versus these on Gen-SET are off the grid, right? So we are seeing a lot of farmers are first found that we deployed at Vente farms. I was just talking to Carl Vente a few months ago and they're putting on a much bigger solar panel there, right? Because they see it as we can make money from solar and we make money from our fruits, right? So farmers now get to see how can they use their land, the homes of generating more revenue as our farmers are thinking about it. - Got it. And given that the tractors probably used during the day, I take it when the sun is out, does that mean that the infrastructure requires like battery storage as well to take it or the solar is going back into the grid and then you're just taking the grid power later to charge? - Exactly, it's the second thing, right? So actually by having our tractor, you can use our tractor as a battery. So we actually lower the cost of solar environments. So if you're not using your tractor during, like say the off season, our tractor can just sit there and the battery will charge up and then you can use our tractor as a generator. You can move the tractor around and you just plug things in, right? And we provide a lot of power, right? We can basically replace on the generator with what we have on the tractor. - Can you mention there's a range of the ongoing costs, like the subscription fee, what's kind of the general range that people could expect to pay? - Yeah, so again, it depends. So I strongly recommend that they give us a call, right? Or check out our websites for the latest pricing. And the reason for that is very often we're able to subsidize that cost or depending on the kind of farm is there. So there we have different plans. So and the goal for us is to make sure that they see value on that side. And again, if they want to use the tractor without that software that's also possible, they will lose some features, right? So, I mean, given all the subsidies and to kind of be very nuanced, depending on what industry they're in, and like I'm assuming the volume and things like that, it sounds like a lot of the upfront costs are kind of, can be mitigated. How are your customers, whether small or large, thinking about the ROI on a machine? Are they able to just boil it down to the run time cost compared to diesel, or they have to factor in other upgrades and things like that into the equation? Like how are they calculating ROI? - Yeah, most of them, it's a really basic calculation, just like you mentioned, right? Which is how many hours do I use it? How many, what is the hours, dollars per hour savings that I get? Somewhere between seven and 12, depending on which state you are in, and how much electricity costs, right? And then what is the subsidy? And here's my payback, right? And in a lot of cases, they're looking at paybacks that are more within in our two years, right? Especially, if it comes down to how much you use it, it's like an electric car from that standpoint, depending on your commute. It's very easy to pay it off, but at the same time, if not the person that's gonna use it, right, takes a bit longer. - So we noticed on your website, you have an ROI calculator that shows both the cost savings as well as environmental impact. I'm curious on how frequently that's used and how effective it has been, and are your customers, do they care more about one or the other? - Yeah, no, actually interestingly, we have customers that might care about one more than the other, but they're getting the benefits of it, right? The reason for that is one great example is with regards to some of our daily customers, right? Because they are doing this carbon offset, the people that are buying the milk from them, the large companies like the denoms of the world are offering an incentive for our daily farmers. So in certain cases, they've gotten subsidy not from the state or the government, they've actually gotten it from different entities like denoun, et cetera. Because they now get to report that carbon emissions on their reporting, right? - They're getting a subsidy from their customers. - Correct. So it does matter is what I'm trying to say, right? That's the O2, and how do we get value for it is a question. And again, in other cases, we actually capture the data and then report it to the state and government agencies to say, hey, they're actually using our tractor, right? It's a subsidy not just to set, and the tractor is actually making a difference to the air that we breathe. And then the ROI calculator is definitely the most important one. It's a very tough year for the vineyards, right? It's been a tough couple of years for the last two years. So the dollars of savings that they can get doesn't matter, and what is the payback look like is very important. That's why we have the ROI calculator on our website is plug that in, right? Let's see how quickly we can get you some savings. - And that seems like a baseline in front of that, you guys can work with them on even very specific subsidies that would benefit that specific customer. - 100% right? And also we're not counting all the other features, right? We talk about a lot of things like, hey, we can decrease your supervisor time or you can track what the tractor is doing. You can be more efficient. All that is layered on later, right? But this is a very basic calculation to get them to a client tractor. - So when your customers are making the purchase decision, how important is it just that it's an electric offering versus potentially upside of autonomous service that the vehicles can do? Like what is the making that purchasing decision for your customers is that is one more important than the other? - Oh, definitely, I think most of our customers want autonomy because they've almost everybody's struggling with labor. But we do also have a significant number of customers who want the electric side. So what I mean by that is some of them are quite happy with the tractor. They use it for a lot. They see the diesel savings. They like to advertise and they're trying to reduce their carbon footprint. They could be an organic or a biodynamic vineyard. And they're very happy to use it in a manual mode. So we do have what kinds. If one was more than the other, it's probably definitely the autonomy side is a bigger ask from most farmers because that's a bigger part of their cost. They were called "trunking Google" I have to ask, do the monotractors follow the moon cycle on the biodynamic calendar? I think we do work better in certain times of the year. It's more efficient based on the magnetic pull of the tractor. That's the battery in the tractor. It's a little smarter. This is a charge. It's hot or cold. It does make a difference. But apart from that, it's a little harder. So how do customers usually hear about monarch? So a number of them, you do have a marketing department. So we're off and out there. So again, I do a fair number of these kind of podcasts, etc. So we want to thank people like you for getting the word out and increasing the awareness. So that helps. The second one is there's no competition, right? There's no other electric tractor that you can go and buy today. We are one-off-one. And the reason for that is it's a very hard problem. Otherwise, you would have like 10 people like monarchs like that farmers would be cross-shopping, right? We are one-off-one. So that's how they hear about us is, hey, I want to reduce my diesel cost, right? I'm driving an electric car. Why is it that I still don't have an electric tractor? Wait, hang on. There is a company. Let's go talk to monarch. So that's how they hear about us. And again, the word of mouth is also quite powerful, right? So farmers talking to farmers is always the best one. And have any of those channels been more effective than others? I think definitely the social media site is increasing these days. And that's a big part of it. But also we need to have boots on the ground. So whenever we go, we do a lot of demos. Farmers like to try before they buy. So I think both those are quite effective. But whatever the channel is, the end of the day the farmers would want to keep the buyers for lack of a better word before they buy. So when you say social, what kind of which social platforms have you seen be? That was definitely surprised to hear you say that. So social platforms are farmers using these days. Yeah, I think the Facebook site has been quite powerful for us. Right? When we target owners, etc. We then do use like LinkedIn, etc., right? The Google SEO search is important. But again, the local dealers are also quite important. So then we partner with dealers on some of the channels, etc. But at the end of the day, it all comes down to the demos again. They want to either see it with somebody or they want to try it for a while. Right? Or they want to talk to somebody who's using a tractor. All of these make a big difference. You mentioned you're one of one in terms of electric tractors are more coming on the market. Do you see in the future, there's obviously big lots of big tractor companies in the world, right? From John Deere and Caterpillar to the Kubotas or the other ones that have vineyards used. No, we're very proud of the fact that we're one of one. There are a lot of big tractor companies in the world, but it's not an easy thing to do. So that's the reason why none of them have a commercial product out there. Right? You know, we do hope that more tractor companies enter the space. Because for us, that's a good thing. It validates the market kind of. And it's something that is needed. Farmers are asking for it. But we do expect to see more electric machines out there, especially as we get into more data and more autonomous. Right? When was the last time you saw a robot or a room of powered by a diesel engine? Right? Or a drone powered by diesel engine? The number is very small. The world is going towards that way. But there's definitely been a slowdown in the last year or two on the electric side. And that's mostly being driven by some of the incentives and some of the rhetoric from the federal government. But at the end of the day, the world is not stopping, right? We need more efficiency. It's not about diesel or electric. It's about efficiency and cost. And electric is efficient and has a cost benefit. So eventually it'll come down to that. Yeah, as long as it's cheaper, people will buy it by all right. Exactly. Yeah. So it's about cheaper. It's about ease of use. It's about automation, right? So if you can make more and more machines automated and for that, we need to collect data. And for that, you cannot like charge customers or diesel cost to be autonomous. Right? That's basically, that doesn't work. So that's why we feel like the world is going to go towards electric automated machines. I might take a few more years. And all the big guys are still struggling with that technology. And if you're struggling, you know, home to call to help you. Yeah. You mentioned that you sell your technology for other platforms to use as well. And you also mentioned that you have dealers that sell the machines. Is it mostly sold through dealers or is it mostly direct from the company? It's currently a combination of both. Because it's a new technology, we have our own salespeople that work very closely with our selected dealers. And then we are also doing demos. We do join demos together. So it's basically a joint exercise today. But we do have a direct sales team as well. So when you talk to potential customers, what do you think are the main barriers that you hear from them about adopting your solution? The farmers want to make sure that they get service and support at the end of the day. They want to know how to call something happens with the machine while they're doing a critical operation. So that's definitely the biggest barrier. And as a new company, they're always a little worried about that. And that's why, and also it's a challenge for new companies like ours, right? Don't get me wrong. It's not easy for a small company to provide nationwide support. So but we are getting better and better at it. We are trying to use technology and we stand behind our customers. Right? We have had issues. We have gotten out there. We send our people to pick up the reactor, fix it, we drop it off again, we etc. So that's definitely a big barrier for farmers. But farmers are also now starting to get more and more comfortable now that we've been around for a while. So that's a big challenge. The second big one is they want to understand what the labor savings are going to be on the autonomy side. They're waiting for more and more automation in the number of cases. They'll rather hang on to their depreciating or already depreciated diesel tractor. So those are the two barriers. I would assume that the first barrier in terms of getting support from a small company is exacerbated when it's an international potential customer. Or do you work with people through like joint venture so you can kind of mitigate some of that risk? So that's what we're trying to do right now is we do have joint venture reviews at tech. Right? And for us also it's important to collect data from other places. So we've had to like people to other parts of the world. We actually flew our repair guy went over to New Zealand, Fies right and repaired the tractor for one of our customers on a veneered cherry farm there. Pretty cool right? That's kind of that's the kind of stuff that we have to do. But to a point I think the dealer network as we scale that will help. And as the technology gets better we'll also make a big difference for us where we can do more and more with just technology remotely. And we're also continuously making our machine better. So all those three are going to help on that side. Yeah I was curious because like you know obviously like first round of like Tesla's definitely had some issues especially if you were to give it the wear and tear that I'd tractor would do. Like obviously updating the machines the software but how often are you updating the actual hardware machines like what version of models are you on now? Yeah so we are continuously updating them right? So it'll be a five. Some of our early customers I think if you're talking to them you'll if you have touched the tractor like multiple times like it's definitely somewhere between five and ten times we've made up data to their machine. And the same customer is that it would struggle to get hours out of our tractor and now getting double the data hours a day right? So I'm very thrilled about that. Some of our tractors have now reached I think you might have seen our press has now reached like close to 4,000 hours if I'm not wrong right on a single machine something that we could not do when we first released the tractor right? So the machine's gotten better the hardware has gotten updated a number of times but also our software actually helps us solve a lot of the problems even without us touching it. So I encourage every farmer to kind of they have to change their mindset just as every time I update the phone it gives me new features fixes out of the problems. Whereas the early days I'll be very scared of updating the phone. I'm like oh my god right I'm going to update this and it's going to break something. So I'm not going to change anything because it's working right now right? But now we do it automatically right? So our farmers are also something that we're trying to get them to update. They're still thinking about this as if it's their old John dear that each time I've dated something in break and unfortunately some of the big tractor companies have had the running to those issues where they break their tractors in the middle of harvest. So there's some well known examples there so we're trying to overcome that. So long story short we have made hardware changes our tractors have now reached thousands of hours on a single machine in number of far customers but we do need our farmers to update their their software constantly right? Because we're constantly learning and sending out things. One question since you had this interesting that you have had some tractors that hit 4000 hours. I has an electric car owner I was just commenting that I've never had my current car for a couple of years now. I've never had it serviced. There just seems like there's a lot less moving parts in a car. I'm assuming that like an diesel tractor could it it would get the 4000 hours? Is that a big number for a diesel tractor? Oh it's a big number by which time you would have to redo the engine has to get rebuilt and then the gearbox and hydraulic system to get rid of this and engine re farmer is like 4000 hours for you and me on as a codriver is roughly like somewhere like six to ten years of usage. Oh wow okay yeah I'm just curious because like when you just talk about an hour it's like what is a typical diesel tractor's lifespan in hours because I had just a different frame of reference. They're not by 4000 hours the tractor is done. So was it typically go to is it like they typically like are they budgeting for like 2000 hours typically or something like that? Yeah usually the big customers are somewhere between 4 to 6000 hours they're going to replace the tractors especially in our tractor class right the small tractors. So we are very proud of that fact that hey this farmer has gotten to 4000 and he's still using air 10 battery is still the same battery, right? It is a big deal for us and a lot of the other electric tractor companies that try to do this, run into battery problems, they had all kinds of failures, etc. So we are very proud of that. So to answer your question, right, think about it as if you drive your car for like say two hours a day to the lot. That's roughly 300 hours a year. That's all of, you know, by the time you get to 3000, that's 10 years, right? It's crazy. So we are very proud of how our tractor has gotten there. So the farmers are spending a lot of money on tractor maintenance, engine rebuilds and gearbox rebuilds and hydraulic rebuilds, etc. So we do help them reduce that. So what's next on your product road man for monarch? So we are very excited about like working with a number of other companies, a number of large companies and our colleague Monarch saying, hey, we're trying to do this, whether it's economy or whether it's electric and we have not succeeded, it can be worked with you. So for monarch and for our customers, I think you'll start to see a lot of products coming out that now we'll have monarchy technology in them, not just tractors. So we're working on some very cool things, right? So we're excited about getting a monarchy into all kinds of different products that our farmers can then buy, right? And all of them will be sitting on that same platform. They'll all have the same advantage where you can track all of them together and you can automate all of them together, right? So that's the future. The future for us is we want to reduce costs for the farmer. We want to electrify and automate every device on a farm globally. That's the future for us. And we have some big announcements that are coming up in the next two to six months. Great. Well, as a ag tech and winery technology company, you probably see a lot of other interesting innovations and you're partnering with a lot of other companies. Are there any particular new technologies that Monarch's not doing itself that you're particularly excited about? Yeah, I think thanks to what AI has done, right? And AI technology is, you know, some companies like what AgScoe is doing where they're using AI in just normal cameras, not expensive ones, right? To cameras to actually collect data and tell the farmer that you need to go to this role, look at this tree. That's something that everybody's always promised for the longest time. It's not something that we do today, right? But, you know, companies like AgScoe are using AI and cameras. Very simple cameras to do this because that's how powerful the technology is today. So that promised land, I think, is finally coming. And what we see ourselves as is we want to partner with those kind of companies, which is why we went and partnered with AgScoe immediately. We said, "Hey, how can we work together, right? How can we help you?" Because we're not doing what you're doing. Let's work together. So they said, "Hey, we could use your tractor to collect the data site." Great. Let's do it. Right? Let's reduce the fuel cost and the tractor driver cost for your data collection and then you help the farmer figure out which role, specifically. It's not producing the yield that you want and what is the prescription for it, right? You do that part. We'll do the farm operation part. So we're excited about that. The future is now really coming to life. Awesome. Well, this is a wine business podcast. So we always like to end on a wine note and on a personal note. So we are curious. What is the most cherished bottle of wine in your personal cellar and when do you plan on drinking it? A very special one is one that my co-founder, Carlo, right, has a very special vineyard that he produces the wine on and I love it. It's a pinot noir, especially one from two years ago. And the reason for that is more than the wine is the story behind it. We had like, it was a very rough years when we started the company. We had like forest fires and we were demoing our tractor when there was a forest fire going on in the background in the app. And we were showcasing how our tractor can help get people off the farm but still do the operation. So I have a bottle from him from that year. That's 2020. Yeah. So the 2020 side of it, right? So which I'm very just still being saved. I'm not sure if they're ever open it, but it's still there. And for those who aren't familiar, you're talking about Carlo Mondavi and the rain winery. Correct. And the rain winery. It's a very special pinot noir from 2020, right? Great. Well, we want to thank you for sharing so much information about Monarch and what you are working on in all the ins and outs of the business. It was really quite interesting, especially when breaking down the costs and the savings that a lot of your customers are seeing. It's really in the wine space, but also in the agricultural in general. It's much appreciated. No, thanks a lot for having me. And again, in every farmer on the world, right, it's a part of our food security ecosystem. So we all have to first make sure that they're profitable and second make sure that they're sustainable. And that's our whole mission here at Monarch. So we are very thankful for all of our supporters and also thankful for both of you for shining a flashlight or what is possible and what the world could be. 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