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Vertical Farming Growth Accelerated by Coronavirus
Vertical farms utilize indoor growing facilities that leverage artificial light, reduce dependency on synthetic chemistry and other crop inputs, optimize water use, and allow food growth in challenging environments with limited arable land
August 14, 2020
The coronavirus pandemic has disrupted the traditional U.S. food and agriculture supply chain, providing a potential growth opportunity for vertical farms.
One recent deal made in the space involves Singapore-based Temasek Holdings Pte and Bayer AG forming a new company called Unfold, which will develop seeds for vertical farms.
Unfold raised $30 million in an initial funding round and entered into an agreement for certain rights to germplasm—the genetic material from which plants grow—from Bayer's vegetable portfolio, according to the two firms. By utilizing the germplasm from vegetable crops, Unfold will focus on developing new seed varieties coupled with agronomic advice tailored for the unique indoor environment of vertical farms.
The venture will focus on innovation in vegetable varieties with the goal of lifting the vertical farming space to the next level of quality, efficiency, and sustainability.
"The investment in Unfold is a great example of a transformative, creative approach to developing agricultural products that meets the needs of consumers, farmers, and the planet by increasing access to fresh fruits and vegetables, supporting sustainably grown, hyperlocal production, and addressing food security challenges faced by growing urban populations,” said Jürgen Eckhardt, MD, head of Leaps by Bayer, which was built to drive fundamental breakthroughs in the fields of health and agriculture through new technologies.
Vertical farms utilize indoor growing facilities that leverage artificial light, reduce dependency on synthetic chemistry and other crop inputs, optimize water use, and allow food growth in challenging environments with limited arable land. They also help crops grow quicker, enabling the reliable growth of fresh, local produce anywhere and at anytime by utilizing less space and fewer natural resources while reducing the need for food logistics and transportation.
In July, vertical farming company Kalera announced it will open a state-of-the-art growing facility in Houston, TX, during spring 2021. The Houston facility will be the largest vertical farming facility in the state.
The new facility was introduced just two months after Kalera revealed it will be opening a new facility in Atlanta in early 2021—an announcement that took place less than two months after it opened its second Orlando, Florida farm. The Houston facility will be even larger than the Atlanta one, which is slated to be the highest production vertical farm in the Southeast.
“In light of the global pandemic and seemingly endless food safety recalls, today, more than ever, consumers are demanding food that is local and that they can trust, said Daniel Malechuk, CEO of Kalera. “Houston presents Kalera with a wonderful market for our produce, as it allows us to not only supply one of the largest cities in America, but also service cities throughout the region including Dallas-Fort Worth, Austin, San Antonio, and New Orleans." Kalera’s lettuce from the Houston farm will be available at retailers and foodservice distributors.
Meanwhile, Greenswell Growers will invest $17 million to open a hydroponic greenhouse in Goochland, VA, reported Richmond Times-Dispatch (Aug. 11). The facility will reportedly produce 28 times more product per acre than a traditional growing operation, and the company expects to yield about 3.7 million-lbs. of leafy greens, which it will distribute throughout the Mid-Atlantic region.
“Greenswell Growers is proud to bring our large-scale indoor growing facility to Goochland where we will provide delicious, safe, and sustainably grown leafy greens that are good for our community," said founder Chuck Metzgar.
In Scotland, indoor agritech specialist ISG completed a deal with vertical farming operator Vertegrow to build the first commercial vertical farm in the country. This is the first move into vertical farming for Vertegrow, diversifying alongside existing agricultural operations, currently growing crops including barley and rye in open fields.
The towers, which are expected to be operational in early 2021, will grow a variety of crops that are intended to service the local food supply chain. Vertegrow will work with a range of local customers including retailers, caterers, restaurateurs, and other local services, to deliver produce all year round.
The four-tower system will be built in Aberdeenshire in Scotland later this year.
To listen to The Food Institute's webinar featuring AeroFarms, a leader in indoor vertical farming, click here.
About the Author
Victoria Campisi
The Food Institute
Victoria writes for the biweekly Food Institute Report, the daily Today in Food updates, and the Foodie Insider daily newsletter for consumers. She graduated from Montclair State University with a B.A. in Journalism and has a background in Nutrition and Food Science. Victoria can be reached through her email at victoria.campisi@foodinstitute.com.
Coronavirus May Lead To More Indoor-Grown Produce Coming To Your Local Supermarkets
Supermarket chain Albertsons and San Francisco-based indoor vertical farm startup Plenty said this week that Plenty will supply its indoor-grown baby kale and other produce eventually to more than 430 stores across California beyond select Albertsons-owned Safeway and other stores in the Bay Area that currently, stock Plenty produce
Aug 13, 2020
Andria Cheng Senior Contributor Retail
I cover retail, from fashion to grocery, and its dance with technology
The coronavirus pandemic has disrupted traditional U.S. food and agriculture supply chain and proven to lend a potential growth opportunity for plant-based meat companies like Beyond Meat and Impossible Foods. It also may translate to your seeing more produce from indoor vertical farms in the so-called AgTech space.
Supermarket chain Albertsons and San Francisco-based indoor vertical farm startup Plenty said this week that Plenty will supply its indoor-grown baby kale and other produce eventually to more than 430 stores across California beyond select Albertsons-owned Safeway and other stores in the Bay Area that currently, stock Plenty produce.
The startup, which is backed by investors including Softbank, Amazon AMZN 0.0% CEO Jeff Bezos and Google GOOGL +0.6%’s former CEO Eric Schmidt, has raised more than $400 million as of Jan. 1, according to PitchBook. That puts it in the unicorn club of startups with valuation exceeding $1 billion.
When fresh produce demand soared at the start of the pandemic, the companies said Plenty was able to boost production to supply more produce to relieve store shortages.
“When COVID hit, that severely shocked the food chain and distribution centers were closed,” Matt Barnard, Plenty CEO, said on financial network CNBC Wednesday. “There were instances when Plenty was the only thing on the shelf. We were able to prove the extreme reliability of our farms and short food chain with our local farms.”
Like its rivals including AeroFarms and Bowery Farming, these indoor farms make part of the growing crop of AgTech companies that often have some sort of environmental sustainability pitch and tout the use of data science and other technology to increase crop yield and make different parts of agriculture more efficient and traceable. Plenty, for instance, said its vertical indoor farm uses less than 1% of land and 5% of water compared to traditional farming.
In another sign of growing interest in the space, Oracle ORCL -0.3% Co-founder Larry Ellison and physician Dr. David Agus in July formed Sensei Holdings that also includes an indoor-farm AgTech unit.
Investors also look to be taking a growing interest in the space, especially against the uncertain impact of the pandemic and how it may upend the global food supply chain.
AgTech venture capital investment totaled $2.2 billion in the first two quarters of this year, after a record 2019 when $2.7 billion in total was raised, according to a study by Pitchbook and VC firm Finistere Ventures, which also invests in Plenty. This is in sharp contrast to Pitchbook data showing VC funding in the battered-retail sector having slumped by more than half this year.
In the so-called food-tech category, $4.8 billion already has been raised the first six months of this year, compared to $7 billion in total last year, the research shows. Most of the funding for both the food and agriculture tech spaces this year came in the second quarter when Covid-19 escalated to become a global crisis.
As consumers increased online orders, that translated to delivery companies Deliveroo, DoorDash and Instacart rounding out the top four startups, along with plant-based meat company Impossible Foods, in getting most VC funding in the first half of this year, according to the study. A case in point, for publicly-traded Uber UBER -1.2%, Uber Eats-led delivery business has beat its mainstay ride-sharing bookings.
After the pandemic idled or shut meat plants and caused spikes in prices, Beyond Meat, which went public last year, said in May it would introduce “heavier discounting against animal protein.” Company CEO Ethan Brown said then meat supply disruptions gave Beyond “an opportunity for consumers to be aware of a different model.”
The pandemic continues to sow its disruptive effect across different sectors of the economy.
Related on Forbes: As coronavirus batters retailers, mall owner Simon Property sees an opportunity in bankrupt chains
Related on Forbes: Uber’s biggest business is officially no longer ride sharing
Lead photo: With coronavirus having disrupted food supply chain, that may provide more growth opportunities for ... [+] LIGHTROCKET VIA GETTY IMAGES
KOREA: LG Shows Off Blockchain-Powered Farming System at Seoul Metro Station
South Korean electronics giant LG has created a very public showcase for its blockchain-powered food and agriculture traceability platform – at one of Seoul’s busiest subway stations
July 22, 2020
Source: LG U+
South Korean electronics giant LG has created a very public showcase for its blockchain-powered food and agriculture traceability platform – at one of Seoul’s busiest subway stations.
Per Paxnet, LG’s telecoms subsidiary LG U+ and its IT services arm LG CNS have teamed up for the venture, which will see the companies create a “smart farm” within Sangdo Subway Station. The station sits on Line 7 of the capital’s subway system and is located in Dongjak, an affluent south-central region of the South Korean capital.
The smart farm will be kitted out with the latest in high-tech agricultural wizardry, but its true purpose appears to be the promotion of LG CNS’ Monachain blockchain network. The company has developed a platform for agriculturalists, retailers, and customers that makes use of the network – whereby all members of the supply chain feed data into a decentralized ledger, purportedly ensuring traceability at every step.
The agricultural sector in South Korea is worth over USD 7 billion, per Bank of Korea statistics released earlier this year. What is more, the government has shown a keen willingness in subsidizing IT-powered farming innovation drives. Seoul has previously unveiled plans to create 4,300 jobs in the emerging smart agriculture sector by 2022.
Last year, LG CNS stated that it would develop an agricultural goods distribution platform that makes use of the Monachain platform – in association with the government-run National Agricultural Products Quality Management Service and local authorities.
The company has also attempted to extend its blockchain-powered food traceability operations to school lunch programs in the country.
As previously reported, the company is currently testing its own digital token, and has formed partnerships with other major blockchain players in the nation, including chat app giant Kakao’s Klaytn blockchain project.
Visitors to the Sangdo Station-based farm will be able to see how agriculturalists at the site maintain optimum growth conditions day and night using blockchain-powered solutions that help monitor lighting, temperature, humidity, carbon dioxide, pollution and more.
The two LG subsidiary companies have teamed up with an IT firm named Farm8 for the venture, and say that they will extend the reach of the platform to smartphone-powered remote crop cultivation in indoor smart farms. The parties say they will use innovations including monitoring sensors connected to WiFi networks, smart CCTV systems, Big Data, and AI-related technology.
Future of Indoor Vertical Farming With Microgrids
Schneider Electric’s Don Wingate discusses how microgrids can help the indoor vertical farming movement realize its full potential
09-07-2020 | Microgrid Knowledge
Schneider Electric’s Don Wingate discusses how microgrids can help the indoor vertical farming movement realize its full potential.
While indoor agriculture has steadily gained traction in recent years as the world seeks alternative ways to feed growing populations, the uncertainty of today’s global pandemic has accelerated a rethinking of the way we obtain our food. In the last few months, modern supply chains experienced volatility like never before and it wasn’t long before we started to see the impact beyond medical gear and personal protective equipment and began to affect food production. According to the Institute of Supply Chain Management, 75% of companies reported some kind of supply chain disruption due to COVID-19.
Indoor vertical farming is emerging as an alternative to conventional farming because it both requires lower land-use and introduces the opportunity to bring agricultural production closer to consumers — shortening supply chains and increasing footprint productivity. This is especially important during times of turmoil, which is broader than the current pandemic as weather events and changing climate patterns continue to put constant strain on traditional farming practices. In addition to shortening supply chains, indoor farming has many other advantages in comparison to traditional agriculture such as using zero pesticides, employing 95% less water, and reducing food waste. Health benefits also include fresher food, increased urban availability, and pollution reduction.
Despite the major advantages, there is one looming barrier to mainstream adoption: the process is very energy-intensive.
Solving for the energy intensity problem
Vertical farming presents a unique opportunity to grow food on already developed land and increase domestic food production, but the energy demand required to power these facilities is much higher than other methods of food production. In fact, we’ve identified indoor agriculture as one of the four major drivers that will increase electricity consumption in the next decade, along with electric vehicles, data centers, and the electrification of heat. This is why more of today’s modern farming companies are turning to microgrids as a possible solution to ease their energy challenges.
Although most of today’s facilities are not equipped to meet the electricity needs of an indoor agriculture operation, microgrids can provide dynamic energy management and the resources required to support maximum productivity, sustainability, and energy efficiency. They can provide localized power generation and utilize renewable distributed energy resources to help deliver power and reach clean energy goals, while also allowing users more control and reliability. Additionally, microgrids can capture and repurpose CO2 emissions to help in crop production.
Moreover, microgrids provide resilience from unexpected outages that could result in a loss in production. A key advantage of vertical farms is their ability to allow crops to grow year-round, and communities rely on their ability to deliver on this promise. Microgrids not only have several clean energy benefits, but they also increase business continuity that maximizes output. Given their ability to operate either in conjunction with or as an island from the utility grid, they can keep the farm producing even when the grid goes down.
The case for investment: Securing an affordable solution
Building and operating a vertical farm requires various technologies that can translate to high startup cost and design complex processes. At the same time, it is more expensive to maintain a vertical farming operation than traditional field farming. Microgrids offer a compelling value proposition, but they’re inherently complex machines and not many companies have the upfront capital or in-house expertise needed to make the investment. Fortunately, innovative business models such as energy-as-a-service (EaaS) help provide price certainty and make the investment attainable.
For example, a modern farming company, Bowery Farming, created a facility wherein crop production is 100 times more efficient than traditional farmland. This generated a need for a greater need for reliable, efficient power. Thus, the company made the decision to integrate a hybrid microgrid system that would feature a rooftop solar array, natural gas generator, and a lithium-ion battery energy storage system through an EaaS business model. Through EaaS, Bowery Farming saved upfront capital that can be used toward additional operational investments.
By 2050, the world’s population is expected to grow by another 2 billion people, and feeding it will be a major challenge. According to the projections of the Food and Agriculture Organization, we have to increase overall food production by 70% by this timeline. Coupled with new concerns that have surfaced as a result of today’s global pandemic and unstable weather, vertical farming will play a key role in future food production and institutions will take notice. However, the technology that will help ease some of the industry’s ongoing energy challenges will be just as important to aid the transition.
Don Wingate is the VP of utility and microgrid solutions at Schneider Electric.
Source: Microgrids Knowledge
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