Upward bound: Lessons learned from vertical farming
Vertical Farming Lessons Learned | Sian Yates |
With the Vertical Farming World Congress attracting leading companies from all over the world to Amsterdam from 7-9 October, organizer Richard Hall, who is also chair of FoodBev Media, reflects on past lessons and future prospects.
A lot went right. A lot went wrong. A lot is good. A lot needs fixing.
What went right
The first signs for vertical farming were spectacular. What could be of greater benefit than a positive response to climate change? No seasons, no floods, no droughts, no pesticides. Less water, less waste. Better nutrition, better shelf life. Better taste, better presentation. Quicker crops. Less space. Genuine control over growing conditions.
Billions were raised. Several companies were valued at over $1 billion each. New science was developed. Old nature was revisited for its heritage values. Self-sufficiency in space became a possibility.
What went wrong
To me, the biggest problem was a disconnect. You can only be successful in fresh food if you have a customer base and a reliable supply chain to serve it at an affordable price. This was the most astonishing and basic oversight for many of the failures.
The other key mistake was that so many companies seemed to want to invent their own proprietary growing and technology systems, which involved huge expense and produced varied results.
More well known were the 2022 increase in energy costs, the difficulty of achieving mainstream price parity, the limitations of reliance on leafy greens and microgreens, the uncertainties of most other crops and the lack of public policy awareness or support.
A lot is good
Fortunately, lessons have been learned. Painfully. There are few companies that were in leadership positions five years ago and retain leadership positions today. A good number of them will be speaking at our Congress next month.
Possibly the most important two lessons have been about location and scale.
Location is vital, to secure the cheapest possible energy. Proximity to heat from waste appears to be the most potent strategy. Solar or other renewable sources and grid connections may also help maintain year round consistency of availability and flexibility of cost. And the right location can save on rent and gain from infrastructure support.
Scale started off as a question and may become a question again. Will every home have one? Will there be vertical farms in all large supermarkets? Will multiples of shipping containers be more viable? Will regional distribution hubs be most efficient? Will everything depend on AI and remote control? Or will people hold the solution in their hands?
The answer currently favours substantial regional operations rather than hyper-local production. This is mainly a function of capital cost, supply chain dynamics and operating cost management.
There is a lot more good
Vertical farming can genuinely help feed the world. More appetisingly and more nourishingly.
It can complement the rest of farming. It can become a key part of combating climate change and improving the planet’s resilience.
Vertical farming is not one dimensional. There is totally controlled environment agriculture in a confined space without natural light. But there can also be hybrid systems, incorporating natural sunlight or using totally controlled space to propagate seeds before planting them in greenhouses or open fields. It’s conceivable that many farms will in time have vertical farms within them to make them more sustainable.
Vertical farming can help ageing agriculture renew itself. It can also bring people closer to understanding where food comes from. It can reintroduce tastier varieties that we’ve lost because supermarkets placed greater priority on shape and endurance on long road transport journeys.
But a lot needs fixing
Vertical farming is still a tiny industry. Its technology suppliers are much bigger than the growers. Actual vertically farmed produce sales worldwide in 2024 were probably less than $2 billion.
Yet there are dozens of companies, with many different systems. Competing technology is being developed in isolation. It’s hard to plug and play. How many suppliers can be experts at everything? When will we see more specialisation?
There isn’t a common language, common messaging or common data. Sustainability standards remain to be set, adopted and communicated. There are hardly any dedicated associations and none with a global profile. No wonder governments and regulators don’t appreciate the opportunity.
Almost every company, no matter how small, is researching and chasing multiple products and markets. Trees, pharma, cosmetics, wheat, rice, coffee, mushrooms, strawberries – these all have potential for major success. But I think most businesses would be well advised to focus on a few, simple, proven and provable propositions.
In the 1990s, I started working closely with a brand that few had ever heard of, in a product category that did not exist. For years, it kept an absolute focus on a single product in a single pack. Today its valuation is $300 billion. The category, energy drinks. The company, Red Bull.
The vertical farming industry needs to position itself to consumers, retailers, farmers and policy makers as an amazing collaborative contributor to solving substantial problems facing society.
Healthier, more sustainable food. Now, that’s a green future.
Original Article: https://www.foodbev.com/news/upward-bound-lessons-learned-from-the-vertical-farming-sector
