A vertical farm in Japan grows lettuce as produce and for nutrient testing ©Getty Images
A vertical farm in Japan grows lettuce as produce and for nutrient testing ©Getty Images

Vertical farming takes root in agri-tech

28 January 2021

With resources waning, the future of farming could be over our heads

Vertical farming will be a $12.04bn market by 2026, according to Fortune Business Insights, so it’s no wonder global giants such as Google, Amazon and IKEA are taking an interest.

As cities continue to grow – along with the global population, which is expected to hit 9.7bn by 2050 – the agriculture sector is being asked to ensure food security for an extra two billion people. In science journal BioScience, the authors of a piece entitled Agriculture in 2050 argue that to achieve this feat, crop production alone would need to increase by 25-75%.

Vertical farming could be one solution, as the practice involves planting crops in stacked structures without soil to reduce land space, while quality is optimised by managing the environment, with no need for pesticides. Cultivation methods include hydroponics, aeroponics and aquaponics, where crops are grown in water, air or mist, or using a system of water and fish waste.

 Although the capital needed for early projects was extremely high due to the advanced technologies required, costs of the equipment and its energy consumption have dropped in recent years, making vertical farming more economical.

 In a 2019 Ted Talk, Alesca Life founder Stuart Oda said building vertical farms in and around cities helps to shorten the agricultural supply chain and retain a higher nutritional content for fresh produce. The agri-tech firm creates vertical farms all over the world, with many deployed in industrial parks in North America, the urban centres of Asia, and even the arid deserts of the Middle East.

 While North America currently makes up 69% of the global vertical farming market ($664.7m), the Asia Pacific region is expected to become the dominant market by 2024, growing to $2.1bn at an annual rate of 22.1%, according to VynZ Research.

This is thought to be due to Asia’s larger population and consumer demand for pesticide-free, environmentally friendly produce. Meanwhile, in the MENA region, Abu Dhabi will be building the world’s largest indoor farm at 43 acres over the next three years. It is expected to produce 10,000 tonnes of fresh produce per year with extremely low water consumption, to protect reserves in the arid climate.

While projects started cropping up as far back as 2013, key players have only joined the trend within the last three years: UK retailer Ocado invested $22.6m in 2017 through partnerships, while in the same year startup Plenty scooped $340m of funding, including from Amazon’s Jeff Bezos and Alphabet’s Eric Schmidt.

Also in 2017, IKEA invested an undisclosed amount in Aerofarms, while the following year Google Ventures put $90m into Bowery Farming. And in October 2020 Amazon’s Alexa Fund invested in Chicago-based smart garden start-up Rise Gardens.

Vertical farms aren’t exclusive to cities but, after climate control, urbanisation is another major market driver. There are expected to be 662 cities with around 1m residents worldwide by 2030, and China will make up a third, with 220 cities. High density of populations will increase resource consumption and the sector views vertical farming as a necessary innovation to meet growing demand while mitigating other environmental challenges.

Speaking on John Koetsier’s TechFirst podcast in November 2020, Nate Storey, co-founder and chief science officer at Plenty, said vertical farming isn’t expected to replace traditional farming. “The field needs to keep producing. Our job is not to compete with the field, it’s to grow the capacity of the world food production to feed people what they need,” he said.

“To some degree, we’re looking at the second green revolution as we domesticate all of the field crops again and bring them into a place where they can be productive and grown anywhere, including crops we previously thought to be impossible, such as strawberries and peaches.”

Plenty’s operations span a two-acre farm producing 400 times more than a 720-acre field farm, using 95% less water and 90-99% less fertiliser than the conventional equivalent. Increased affordability of renewable energy and agricultural technology is expected to reduce current barriers to take-up, including costs of equipment and complexities of data management.

In terms of distribution, vertical farm produce is transported an average of just 43 miles compared to that of field farms, which average 2,000 miles, according to the European Institute of Innovation and Technology for Food.

As vertical farms can be more flexible in their locations due to a lower dependence on ground space, sunlight, gas, labour and water supply, they can be positioned closer to market, cutting logistical costs and CO2 emissions from vehicles and the cooling systems needed to preserve produce en route.

For now, while vertical farming cannot compete with mature practices, there’s a big appetite for alternative supply chains.

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