Welcome to iGrow News, Your Source for the World of Indoor Vertical Farming
A Primer On Vertical Farming As The Industry Gains Steam
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.
Rich Alternman
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.
Some recent examples of vertical farming going mainstream include:
Newark, N.J.-based AeroFarms planning to double its product offering at Whole Foods and, for Amazon Fresh, expanding from one to five distribution centers, increasing availability throughout the New York metropolitan area.
Albertsons Cos. rolling out indoor-farmed produce from Bowery Farming to 275 Acme and Safeway stores in the Northeast and Mid-Atlantic.
The Kroger Co. rolling out produce from vertical farm 80 Acres Farms to more than 300 stores in Ohio, Indiana and Kentucky.
Giant Eagle introducing more packaged greens products from vertical- and robotic-farming specialist Fifth Season to supermarkets in Pennsylvania and Ohio.
Cost barriers
While investors and environmentalists alike are excited by the prospects of vertical farms, the cost barriers are significant, around 20% to 30% higher than traditional farms.
With that, investors may not be able to live up to the hype they’ve created around the industry, and see their bubble burst before they have a chance to prove themselves, said IDTechEx analyst Michael Dent, in a Bloomberg News article. “If people are expecting world-changing progress and they don’t see it in the first two or three years — and what they see is high-quality salad — there’s a chance they might pull out their investment on the field and move on to the next thing.”
Applying Automated Warehouse Systems To Indoor Farming
“At Swisslog, we don’t have standard solutions in place for vertical farms yet. But due to our long-lasting expertise both in the food industry and in the distribution of fresh products to the point of sale, we understand the supply chain processes and linked to that shelf life considerations.”
“History is written in circles as we observe similar drive for automation in indoor farming, as we saw years ago in the intralogistics sector. There are yet few important differences,” says Timo Landener, product innovator at Swisslog.
Swisslog, with the vision to shape the future of intralogistics, not only develops warehouse automation and software solutions to reduce costs and introduce flexibility to warehouse-based operations but also looks into innovative future-proof approaches. In March 2021, Swisslog announced its foray into the vertical farming market. While Swisslog has not specifically designed systems for vertical farming, its vast portfolio of automation solutions can be adapted to vertical farms, whether pre-existing or purpose-built.
Timo Landener
“At Swisslog, we don’t have standard solutions in place for vertical farms yet. But due to our long-lasting expertise both in the food industry and in the distribution of fresh products to the point of sale, we understand the supply chain processes and linked to that shelf life considerations. Moreover, our portfolio can be easily adapted to indoor farming since the payload is fairly light, the throughput is not critical and the automation operations demand low power compared to the needs of the intralogistics automation,” explains Timo. “Nevertheless, we already learned, that we can't just adopt the same requirements, because plants are living organisms. And we have to respect that.”
Although unable to reveal their clients, Swisslog has reportedly demonstrated its technologies in the vertical farming industry with success to allow growers to reduce operational costs and increase scalability. Examples of innovative systems applicable to vertical farming include the PowerStore high-density storage system, the AGV based good-to-person order fulfillment solution CarryPick, the Tornado mini-load crane and the Vectura stacker crane.
When does automation become economically feasible?
Automation can be applied to multiple processes in an indoor farm including seeding, harvesting, packaging, tray manipulation, etc. However, Timo explains that automation is capital-intensive and best suited for large-scale indoor farms. A higher production level introduces more opportunities to increase operational efficiency and reduce labor requirements.
“Even Amazon began in a small space with little automation. Then, they reached a level where automation made sense. In the vertical farming industry, we need to discuss with clients where the tipping point is for needing automation,” says Timo.
To determine which automation solutions are right for the grower, Swisslog’s automation experts work directly with clients to identify opportunities for increased operational efficiency and customize solutions according to the farm’s architecture. Additionally, the close relation with KUKA as the parental company allows collaboration opportunities to automate and incorporate the sub-processes in an Indoor Farm to a more turnkey solution.
Harvest-on-demand
Timo explains that despite the relatively short distance between urban indoor farms and retailers, a major challenge to indoor farming is the logistics of transporting farm-grown products to retailers while maintaining crop quality.
“After the plants have grown in a perfect environment, they are cut and immediately begin to lose quality. The current challenge is to speed up the process of getting the products to the retailer. Pursuing the innovative approach of harvesting-on-demand, we can make sure that the end customer receives fresh and rich nutrition vegetables. With a palette of automated solutions this is finally possible,” says Timo.
Swisslog’s ties with global retailers started long ago as the Swiss Company delivered solutions for huge automated projects (distribution centers) as well as smaller, more local applications, known as Micro-Fulfillment Centers. Harvesting-on-demand differs from mainstream distribution models by supplying retailers with living plants, which can continue growing until they are purchased.
This process can be carried out in retailers’ “back shops” and would support additionally retailers to fulfill three major sales channels: in-store sales, home delivery and BOPIS (buy online, pick up in-store). Swisslog is certain that we are at the edge of a revolution in food the supply chain: There will be the need for Indoor Farms at the point of sales: a “fresh food on the demand-supply grid”. We see automation as a means for leveraging the indoor farms and help them deliver efficiency that will lower the entry threshold for further investments.
Retailers are a fundamental part of this revolution. “Many indoor farms are currently selling to retailers. Due to the fact, that the retailers sell the crops, they determine how the supply chain will look like. Thus, the power of re-designing the process of the supply chain and ensuring consistency in the circular economy lies in their hands. As for today, the complexity and ramifications of the matter inspire us to join forces with retailers and find out how to react in the best way to changing needs of the customers and the industry. We are on the verge of something new and powerful. Swisslog, an intralogistics automation leader, together with retailers and farming experts, we can deliver a great added value for consumers” explains Timo.
For more information:
Timo Landener, product innovator
Swisslog
timo.landener@swisslog.com
www.swisslog.com
Publication date: Thu 3 Jun 2021
Author: Rebekka Boekhout
© VerticalFarmDaily.com
‘Salad As A Service’: Retailers’ Interest In Vertical Farming Grows
Retailers are waking up to the potential of vertical farming, with technology-enabled agriculture a core part of supply chain bosses’ and food buyers’ plans
By Ben Sillitoe
07 Dec 2020
Retailers will be aware of software as a service (SaaS) – and they may have noticed the emergence of the shopping-centre-as-a-service model, described by Computer Weekly in 2019 – but what about ‘salad as a service’, the latest SaaS opportunity?
If they haven’t yet, they soon might. For food retailers, it could revolutionize supply chains, boost companies’ environmental credentials, and drive new customer experiences.
The concept is related to the evolution of vertical farming, also known as controlled environment agriculture. Vertical farming allows food to be grown independently from climate conditions and other outside elements.
Typically, in aeroponic system vertical farming, plants are grown vertically, with their roots suspended, soil-free, in cylinders where they are nourished with nutrients. LED lighting is increasingly being used in the process to influence how plants grow and taste.
Although the vertical farming term was first coined over a century ago, interest and investment in it has ramped up in recent times for several core reasons, not least enhancements in technology and a renewed focus by businesses on their eco-credentials.
Reflecting on a Mintel 2019 study, Mintel analyst Armando Falcao says vertical farming “can reduce wastage and preserve available resources”.
“Food wastage is a key concern of grocery shoppers, and Mintel research shows that 83% of consumers think it’s important to cut back on the amount of food that is wasted,” he adds.
Supply chain bosses at several large UK retailers are increasingly looking at how they can incorporate this technology-enabled agribusiness into their operations for the reasons Falcao suggests.
But by launching these facilities in urban areas, nearer to the end consumer, there is a chance to significantly reduce the time it takes for fresh produce to get from ‘farm’ to fork, which comes with other obvious environmental benefits.
Mini in-store ‘farms’
Marks & Spencer, Selfridges and Amazon-owned Whole Foods are among the first burst of UK retailers to bring food production even closer to customers by introducing in-store herb-growing pods, from which shoppers can pick the produce themselves.
Those three businesses are using units from urban farming company Infarm, which works with multiple food retailers across Europe. In Whole Foods’ London stores, for example, produce grown includes coriander, parsley, basil, and mint.
Selfridges announced its partnership with Infarm in August, with several leafy greens grown within an in-store unit at the company’s flagship Oxford Street location in London. The first in-store harvest was in September. Prior to that, Selfridges’ customers could order directly from Infarm’s London plant hub for collection in store.
Maria Trapani, Selfridges’ food buyer, says vertical farming provides customers with “hyper-local, extremely fresh and naturally flavourful produce”.
“We are constantly looking for new and more sustainable ways to source food, and this allows us to reduce our carbon footprint, as well as being chemical-free and using 95% less water,” she says. “The range we are offering, which is exclusive to us, is proving popular with customers and we’ve had some great feedback.”
Infarm says its growing environments connect to “a central cloud-based farm-brain”, combining big data, the internet of things (IoT), and cloud analytics technology to gather tens of thousands of data points throughout a plant’s lifetime. The vertical farm provider argues its platform can “learn, adapt, and improve itself constantly” to optimize plant growth.
The modular ‘farms’ provide consumers with something new to explore in-store, but there is much deeper disruption vertical farming could bring to the retail supply chain.
Salad as a service?
Adam Waterman, chief software architect at LettUs Grow, a vertical farming company comprising tech experts and plant scientists, uses the phrase “salad as a service” to describe how his business can aid retailers and food industry suppliers.
Those using LettUs Grow’s vertical farming systems have the option to tap into the company’s experienced in-house experts for recommendations and improvements related to their yields, described by Waterman as “a rapid feedback loop”.
For Waterman, in-store growing units, like Infarm’s, are a “starting point” for vertical farming’s wider use in retail. He believes the discipline will become much more influential.
“I see it moving towards larger food production warehouses in the outer areas of urban centers, in industrial parks, for example, where consistently produced food in large quantities is produced for cities, taking the pressure off the land use around the city,” he says.
UK retailers are very much in the learning phase of what vertical farming could do for their businesses. Online grocer and tech provider Ocado Group has arguably taken a more significant step forward, having formed a joint venture (JV), Infinite Acres, with Priva and 80 Acres, which both operate in the vertical farming industry.
Ocado also has a majority stake in Jones Food, a vertical farm based in Scunthorpe, UK, which when combined with the 2019 JV took its overall investment in the sector to £17m.
CEO Tim Steiner says the plan is to co-locate vertical farms within or next to Ocado’s distribution centers and its rapid food delivery arm Ocado Zoom's micro-fulfillment sites, enabling fresh produce to reach customers within an hour of purchase.
Waterman, who says LettUs Grow is in talks with salad producers and major retailers in the UK about how they might want to use vertical farming, adds: “It’s got the potential to have quite a large impact on the overall food supply chain.”
The main selling points, he says, are consistency and reliability of production, and year-round output that is not affected by weather or seasonality.
LettUs Grow’s vertical farm systems operate on a minimum scale of 24m2. They often cover a container-sized footprint, although the company also builds facilities inside buildings.
Software developed in-house controls, monitors, and manages the farm, taking care of lighting, irrigation, fertigation, and the overall environment such as air temperature and humidity to help plants grow. Users can develop a “gross plan for a crop, and projected yield”, notes Waterman.
Although the main focus of production via vertical farming is currently on leafy vegetables and herbs, the variety of crops that can be grown successfully in this manner continues to broaden.
A vertical farming structure in Wyoming in the US, called Vertical Harvest, for example, has operated with a capacity to produce more than 20 tonnes of tomatoes per year since 2015.
“Expanding vertical farming into a wider variety of produce is completely feasible,” Falcao says.
Future yield
Beth Eldridge, a plant scientist at the University of Bristol, who specializes in soil erosion, heralds the lack of pesticide used in most vertical farms, but she says “so much fundamental plant science is required” to understand this approach’s impact on crops.
“What’s interesting is how we might automate the systems to get feedback on plant growth and energy input,” she says. “Are there clever ways we can measure plant growth indicators, and can computers sense this and feed it back into the system to adjust conditions accordingly?”
She predicts vertical farming will be one part of the supply chain, supplementing already-in-use huge greenhouses and traditional farms.
“I see a niche for it in leafy greens and herbs because there is so much wastage in the transportation of those types of vegetables that I can see a real benefit of having them in the store, picking them fresh and increasing longevity.”
Eldridge also says there is an opportunity for retailers to connect people with the food they purchase by using the smaller in-store units.
When you go in store and pick food yourself, you become a lot more engaged in where it comes from
Beth Eldridge, University of Bristol
“People can become very disconnected on where the food comes from when they buy in packets, but when you go in-store and pick it yourself, you become a lot more engaged in where the food is coming from.”
Trapani suggests there will be multiple uses for the units in Selfridges’ stores, adding: “For now, we are selling from the stacks in the food hall, but the longer-term plan is to also use the salads within our restaurants.”
Vertical farming technology continues to evolve. LettUs Grow, specifically, is aiming to create a general control system, where the software can help predict yields and improve reporting of food provenance information.
“Having effective traceability is an industry must, and we plan to build out in that direction,” Waterman says.
A report from market research group IDTechEx, published this year, acknowledges vertical farming has caught the imagination of entrepreneurs and investors alike. It forecasts the market value to rise from $709m now to $1.5bn by 2030, but highlights potential obstacles to growth, such as electricity costs for lighting.
Michael Dent, analyst at IDTechEx, says: “Rather than focusing on mass-produced, wholesale crops, where vertical farms will always struggle to compete on price with traditional farms and greenhouses, it may make more sense for vertical farm operators to focus on high-value crops that command a price premium, perhaps within niche markets or specialized applications. The debate over the best size for a vertical farm is still ongoing.”
Brexit and any potential disruption in the transportation of goods at the UK border may further influence British companies to invest in vertical farming as part of local sourcing strategies. One thing seems certain, though – food retailers will continue to assess their options as this new technology-enabled agriculture market establishes itself in the UK.
How Space-Saving Retailers Can Bring Fresh Farming Indoors
Farm.One’s latest “mini-farm” in a Manhattan Whole Foods sets a precedent for other stores
SEP 23, 2020
Melissa Kvidahl Reilly | Sep 28, 2020
Retailers who pride themselves on using their own homegrown ingredients in foodservice operations previously looked to a rooftop or back lot for garden space. But New York’s Farm.One is changing the game, making it possible for even the most urban locations to optimize space and offer open, transparent, and clean food production.
Previously known for its restaurant partnerships, the brand recently opened a “mini-farm” at the new Whole Foods Market Manhattan West location. The custom-designed, 32-square-foot structure holds 150 plant sites on three growing levels. These plant sites provide the store’s food and beverage preparers with freshly grown and harvested blue spice basil. This type of structure will be a big part of Farm.One’s strategy going forward, and it’s currently on the hunt for new retail partners.
Farm.OneMini-farms can offer as many as 700 varieties of hydroponic-grown crops. “A display farm can have multiple crops, or just one as is the case in the Whole Foods Manhattan West farm,” says Michael Chin, the company’s vice president of corporate development. And, Farm.One can build, install, and train stores on using farms anywhere in the world.
The bottom line? This isn’t the indoor farming of decades past. “Indoor farming has come a long way, especially in the last few years,” says Chin. “We can now produce fresh, clean and healthy food and ingredients profitably, and in an environmentally responsible way. Developments in technology and new techniques will continue to help make onsite production even more accessible to retailers and other businesses in the years to come.”
TAGS: RETAILER AND DISTRIBUTOR
VIRTUAL SUMMIT: Connecting Technology & Business To Create Healthy, Resilient Food Systems - July 23, 2020
By sharing best practice from around the globe, and facilitating new connections and collaborations, the summit offers an invaluable platform to develop new business and accelerate projects across the Indoor AgTech ecosystem
The Indoor AgTech Innovation Summit is going virtual! This year’s summit will be live online on July 23, 2020, providing an essential opportunity for the industry to meet, network, https://indooragtechnyc.com/, and exchange ideas at this critical time for our industry.
The world’s leading farm operators, food retailers, and investors will present live, before hosting virtual discussion groups on the emerging trends and technologies that will shape your business as we emerge from the current crisis into a redesigned food system:
Key Themes:
· Finding Growth in Crisis: Responding to a Rapidly Changing Food Landscape
· Scaling Up: Co-locating Food Production and Distribution Centers
· Enhancing Nutritional Value: Towards a Perfect Plant Recipe
· Optimizing Seeds for Indoor Agriculture: Breeding a Competitive Advantage
· Analytics and the Cloud: Digital Integration to Optimize Indoor Agriculture
· Robotics: Developing a Contactless Food System
· Energy Consumption: Driving Efficiency and Economic Viability
· Financing Growth: Can Capital Keep Pace with Industry Demand?
· Consumer Awareness: How to Build a “Holistic” Indoor Brand
All participants can schedule video 1-1 meetings with potential partners and clients throughout the summit, and for an extended period before and after the sessions.
By sharing best practice from around the globe, and facilitating new connections and collaborations, the summit offers an invaluable platform to develop new business and accelerate projects across the Indoor AgTech ecosystem.
Summit website: https://indooragtechnyc.com/
Registration:
- One summit pass Indoor AgTech: $195.00
- Start-Up pass: $95.00 / Please contact jamie.alexander@rethinkevents.com to enquire about the criteria to qualify for special rates.
Indoor Agtech Virtual Innovation Summit July 23, 2020
By sharing best practice from around the globe, and facilitating new connections and collaborations, the summit offers an invaluable platform to develop new business and accelerate projects across the Indoor AgTech ecosystem
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Major names join speaker line-up for virtual summit
We are thrilled to announce the first speakers confirmed for the 2020 virtual Indoor AgTech Innovation Summit on July 23.
They'll share critical intelligence on how the indoor farming industry is shaping the agri-food landscape, and redesigning food systems to meet consumer demand for fresh produce.
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Hear from and connect with international thought leaders including:
WHAT ARE OUR EXPERTS SAYING?
"Instead of shutting down, we implemented South Korean-style measures for our warehouse, farm, and office. Then, we launched a new nationally distributed product that allows folks to grow mushrooms at home rather than travel to the grocery store."
Andrew Carter, CEO, SMALLHOLD
"COVID-19 has raised awareness about the prospects for automation such as machines working in packing houses and indoor environments. I think it’s fair to say that humans can be relieved of those tasks."
Elyse Lipman, Director of Strategy, LIPMAN FAMILY FARMS
"Given current pressures on the U.S. food system, one thing is clear: the importance of strengthening our country’s food supply chain through decentralized, regional supply chains."
Viraj Puri, CEO and Co-Founder, GOTHAM GREENS
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