A Primer On Vertical Farming As The Industry Gains Steam
MAY 28, 2021
The modern concept of vertical farming was put forth in 1999 by Columbia University microbiologist Dickson Despommier, who along with his students, came up with a design of a skyscraper farm that could feed 50,000 people.
Since then, vertical farming has become a multi-billion-dollar industry. And it’s growing rapidly.
According to PitchBook data, nearly $1.9 billion of global venture capital was invested in indoor farming in 2020, nearly tripling investment in 2019. And just this week, New York-based vertical farming startup Bowery Farming raised $300 million in its latest funding round, valuing the company at $2.3 billion.
Vertical farming growth may be accelerating at the ideal time, as concerns about population growth and climate change push the food industry to innovate to meet tomorrow’s challenges.
By 2050, around 68% of the world population is expected to live in urban areas, and this growth will lead to an increased demand for food. The use of vertical farming could play a role in preparing for such a challenge. At the same time, it could help restore forests depleted by commercialized agriculture and curb planet-warming emissions caused by farming and transportation. Agriculture and forestry alone account for about a quarter of the world’s greenhouse gases.
What is it?
Vertical farming is the practice of growing crops in vertically stacked layers as opposed to a single level, like a field or greenhouse.
Through the artificial control of temperature, light, humidity, and gases, food can be produced indoors in a way that optimizes plant growth and soilless farming techniques such as hydroponics, aquaponics, and aeroponics. The benefits of which are reliable, environmentally friendly, year-round crop production, significantly reduced water usage (by some estimates up to 95% less), efficient land use, and less exposure to chemicals and disease.
Among its downsides, vertical farms are costly to set up and operate and are too dependent on technologies that have yet to reach full maturity. Further, with its heavy reliance on electricity for lighting and climate control, it uses more energy than traditional farming methods and contributes to greenhouse gas emissions.
With that, the sector continues to innovate. And with vertical farming merely in its infancy, it’s reasonable to expect big things in the coming decades.
Investors certainly think so.
In fact, the global vertical farming market is projected to reach $12.77 billion by 2026, growing at a CAGR of 24.6%, according to Allied Market Research.