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  • Writer's pictureClare Nasir

Vertical Farming – Five reasons why success is inevitable

From the outside, indoor vertical farms are unimpressive — just huge, non-descript warehouses. Step inside and immediately the air changes, it’s moist, sometimes sweet, always verdant. It wafts amongst soft, coloured lighting; a strange futuristic Eden of sprouting greenery cascading from the heavens, nursed, monitored and tracked by all manner of analysts and machines.

Welcome to the world of indoor Vertical Farming.

It’s not just the environment that sucks you in — the people too. They just love the Vertical Farming way.

You’ll meet two of them shortly.

In A Nutshell…

As the name suggests, Vertical Farms grow leafy greens, vegetables, fruit and flowers upwards, saving a lot of space. Most are hyper-controlled environments, protected from whatever lurks outside; extreme weather, pests, badgers, pollution.

In 2021 the global vertical farm market was valued at 4.34 billion US dollars, according to a report published earlier this year by Grand View Design. It is expected to grow at a compound annual growth rate (CAGR) of 25.5% from 2022 to 2030. The USA and Asia Pacific account for the greatest share, however consumer demand has driven a significant rise across Europe in the past few years.

The industry currently contributes a small global reach, but indications are it could become a future high hitter.

Here are five reasons why.

1. Tech savvy

The Brightest Minds

The redesign of Light Emitting Diodes or LED’s during the early 2010’s unlocked container horticulture. When LED’s hone to specific wavelengths they produce specific light that optimises crop and plant growth.

The price of LED’s has dropped impressively this past ten years — making indoor vertical farming economically viable for the bigger players.

New Green Shoots

We know Big Ag is high tech, this is not new in farming. However the design of these skyward market gardens brings new challenges, and attracts a very different breed of people.

I interviewed James Lloyd Jones, founder and CEO of Jones Food Company on Chaseman Global’s podcast series Cultivating Conversations. He described how he had no formal farming know-how and hired no one with any agricultural experience. I was therefore curious about how James had made the successful leap from start up to stronghold in the UK greens market.

“I have no background in farming, I don’t like getting cold, I don’t like getting muddy.. but I do love tractors, but you need a farm to have one, and I don’t have one.” (don’t you just love this guy already).

His first vertical farm was located in Eastern England, known for its patchwork of farm land, dotted with rural communities, so primed with all the skills needed to grow.

“None of which we used.” James commented. “We had people who spent time in prison, people who have build bus shelters, guys from Latvia and Lithunania, … but that was the probably the better way of doing things...”

However, he hired machine learning techs, bioscience grads and veterans who would construct his vision.

His philosophy; lets try, experiment, think big, probably fail and try again. A stripped back business model that has propelled him and his extraordinary team to mainstream retail.

Craig Ratacjzck CEO from CropOne Holdings embraces the design of new cultivars as a vital step to maximising yields, where growing power aligns with optimum light exposure and a finite dose of hydroponic minerals and supplements.

Craig’s background couldn’t be more different to James Lloyd Jones; he spent his early career in the military, then made the move to soya production before stepping into the Vertical Farming space.

During my podcast conversation in episode 5 I asked him, “why Crop One?”

“I won’t give you the recipe of the secret sauce but they are a very strong company on a technological perspective and also on a scalability perspective.”

He added,

“You have to go big.”

In fact Crop One Holdings and Emirates Flight Catering in July 2022 announced the “the world’s largest vertical farm.” A 330,000-square-foot facility located in Dubai, United Arab Emirates, near Al Maktoum International Airport.

So yes, two driven characters at the helm of thriving businesses; servicing urban needs, arid environments and climate impacted regions.

2. Grow local

Saving Space

Vertical farms are popping up everywhere. Spot a container on the edge of town and the chances are there could be a jungle of fruit and vegetables lurking within. The modular design of the latest indoor vertical farms allows for containers to locate close to towns and cities, taking up a fraction of the space of outdoor farming. This delivers strong advantages.

The Road Less Travelled

Location is everything when delivering perishables. Shelf life is lost from miles travelled. Growing fruit and vegetables close to centres of population brings obvious environmental gains. We all know emissions absolutely soar with air freighted produce.

Vertical farming provides other satisfactory positives.

Finish Your Plate

Food wastage is responsible for around 6% of total global greenhouse gas emissions. Compared to national emissions, it’s the world’s third largest emitter after China (21%) and the United States (13%).

The guaranteed freshness of produce, a stones throw from supermarkets allows vertical farms to deliver on quality and without the use of pesticides and fertilisers.

A simple and effective farm to fork model that addresses a global emitter, and when built at scale, becomes cost effective.

The new modular designs are allowing these facilities to be built swiftly, in prime locations, at scale — whilst efficiently adopting the latest technology.

Sydney-based Invertigro is a great example of the sector’s trajectory. They design and build Indoor Vertical Farming solutions. Their designs are appealing to a whole range of potential hyper local outlets — from food wholesalers to airlines, resorts, restaurants as well as property developers looking to create smart buildings; the ultimate integrated and sustainable community living experience.

3. Make every drop count

Recycle, Reduce, Reuse

Food waste is a big deal.

Excessive water use in agriculture is another.

According to the International Water Management Institute , agriculture accounts for about 70% of global water withdrawals

A crop’s water footprint is dependent upon many factors including type, soil health, growing environment and as well as assimilating contamination from chemical usage.

This brings us to the probably the best selling point for Vertical Farms — its closed system uses around 90% less water than regular farming methods. The most sophisticated vertical farms can operate with extreme efficiency. For example, Crop One use 1 to 5% of the water required for traditional agriculture.

Let It Shine

So volumes of water saved. Across dry, sunbaked landscapes, where rainfall is rare, like the Middle East, indoor Vertical Farming becomes a viable economic option when solar energy is captured to power the plant.

4. Stranded Assets?

A Safe Bet

Whether it’s heatwaves, droughts or floods, crops grown in fields are vulnerable to damage and loss. Uncertainty of extreme weather events are increasingly overshadowing projected profit and future investment.

With this in mind, the world of finance are paying more attention to start-ups that rubber stamp food security.

Geopolitical Disruptions

Environmental hazards aside the current energy crisis in Europe has had significant impacts on agriculture, especially fertiliser production and price. Inflated natural gas prices reduced the production of ammonia due to rising costs, China restricted export of phosphates and sanctions imposed on Belarus bought serious implications on potash distribution. Although the 2022 spring time peak in fertilizer prices have now fallen (at the time of writing October 2022), global markets remain volatile and potentially disruptive.

These risks are not levelled at Vertical Farming. Whilst fuel costs on transporting goods remain small due to location, growers are not beholden to price hikes in fertilizers and other crop inputs. Many studies conclude that regionalised production systems will play a key role in future food security as they are less externally input dependent.

The Red Tape of Regulation

In addition, low-carbon development plans loom over fresh regulatory frameworks that govern current agriculture. Biden’s climate deal brings the US much closer to meeting its international climate targets. For the agricultural sector this means inevitable change.

Adaptation at farm level comes with many new and real challenges. We rely on these global food systems to feed humanity. Yet as Vertical Farming continues to exhibit production at scale, the industry becomes attractive to potential investors.

James Lloyd Jones of Jones Food Company describes his produce as ‘beyond organic’.

“No pesticides, no fertilisers, no herbicides…”

ESG expert Niall O’Shea of Discern Sustainability summarises the current thinking within investment markets.

“It is impossible for investors to win business in these markets these days without a strong ESG story. That is what really marks a sea change from the past. However cries of greenwashing are abounding. So what this means for vertical farming that unless it performs horribly it is likely to be a beneficiary of the greenwashing backlash because its environmental benefits are not in dispute.”

James Lloyd Jones adds that most people buy on price — but it’s got to taste good as well.

“ I want a Rolls Royce product sold at VW prices.”

James’ vision is being realised. His upscaling momentum is impressive. Within eight years Jones Food Company now services large retail markets, and with continued investment support, his business will continue to thrive.

Which naturally segues into the final pillar of future success.

5. Leadership

A Bold Breed

Do leaders in this space possess star quality?

I think they might.

From talking with James and Craig, they both display such passion, their narratives, erudite — true ambassadors for the industry.

More importantly their ambition filters to those who choose Vertical Farming as a career pathway.

We turn to leadership expert Sybille Schiffman, Founder and MD of Deostara. She argues future success is more likely when there is an underlying team culture of innovation; an environment where people have the freedom to thrive.

Creating a space that allows entrepreneurial and innovative thought processes cultivates wholesome, effective results that are far reaching.

Sybille cites Daniel Pink, author of Drive.

Motivating people through autonomy provides free range to try out new things, allowing scope to Master skills, that ultimately drives excellence.

Enabling people to Work with Purpose, delivers a lasting impact beyond their time in the organisation. Sybille suggests this final point is particularly relevant to those committed to the sustainability agenda.

Final thoughts

My Vertical Farming conversations have been a source of true inspiration. The community continues to grow and succeed. Exciting times for those who right now are investing their skills, time and money in this sector.

Final thoughts from Mark Cooper, COO, Chaseman Global.

“We are witnessing accelerated growth in this space. From the organisations that we deal with one thing is obvious, the people involved in Vertical Farming are hungry for success, producing the highest quality produce without compromising on local environmental impacts.

There are those who have a unique flair to deliver this success, and those whose underlying experience injects grassroots depth and breadth from neighbouring industries into a sector that is breaking through into the mainstream.”

Listen to the full conversations from our podcast series, Cultivating Conversations.

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