What Plantagon’s Bankruptcy Could Tell Us About the Future of Large-Scale Vertical Farming
March 1, 2019
Following last week’s declaration of bankruptcy, Swedish urban agriculture company Plantagon has spoken publicly about what went wrong. In an interview with Swedish website AGFO, Plantagon’s vice president, Owe Pettersson, cited cash flow problems and indicated it had been difficult to attract enough capital to remain financially sustainable.
Its ambition alone made Stockholm-based Plantagon a company to watch in vertical farming, a space predicted to be worth $9.9 billion worldwide by 2025. Plantagon’s aim was to move food production into high-density cities on a large scale by integrating farms into existing city infrastructure. Via a mix of agriculture, technology, and architecture, the company planned to build farms in office towers, underground parking garages, and on the facades of existing buildings.
This rendering of its World Food Building “plantscraper” shows the sheer scale on which Plantagon was thinking:
As of this writing, the company had one facility already open for production, under the famous DN Skrapen tower in Stockholm. Plantagon also intended to roll out 10 more farming locations in the city by 2020, and has 55 approved international patents.
“This will be one of the most advanced food factories located in a city that we have today,” Pettersson said in an interview last year.
Business in real life, however, rarely happens as neatly as a well-executed rendering. Plantagon had raised $4.5 million SEK (a little less than $500,000 USD), but the company was, according to insiders, having trouble selling the produce it grew. Within two months of production starting on the DN Skrapen farm, the CEO left the company. “The company has a clear idea and view, but hasn’t been able to get it into business,” said Henrik Borjesson of Fylgia, the company handling the bankruptcy.
Pettersson said (translated from Swedish) in this most recent interview that outside financial issues, a project of this scale might be a little ahead of its time.
Vertical farming itself is a hot topic, if you go by what the headlines say. Companies large and small are bringing new visions for this indoor farming concept to market. In Europe, Agricool is growing fruit and just raised another round of funding. And German retailer METRO is experimenting with in-store farms via its Farmlab.One initiative.
In the U.S., Crop One Holdings raised $40 million last year to build “the world’s largest vertical farm. Boston, MA-based Freight Farms is architecting proprietary all-in-one farms in shipping containers. AeroFarms has a 70,000-square-foot facility backed by IKEA and Momofuku’s David Chang.
But as Princeton’s Paul P.G. Gauthier, who leads the Princeton Vertical Farming Project, suggested last year, there are dozens of failures out there that get far less attention than the mega success stories. We need to hear about those failures, to see the data behind them, in order to understand what went wrong and avoid making similar mistakes in future — whether those mistakes are in the operating of the farm or, as may be the case with Plantagon, in trying to scale too high too soon instead of starting with something smaller, like a shipping container. Only when we know the facts behind these stories does vertical farming have a chance on a scale as large as the one Plantagon envisioned.
Plantagon may indeed have been ahead of its time in terms of the size of its project, and the speed at which it wanted to get there. The gap between promising innovation and actually delivering on it is something that trips the tech industry up again and again. Plantagon’s past interviews have shown the company had plenty of optimism and vision for the future. What got mentioned less were the complications the vertical farm industry is still grappling with as it tries to scale — business models, energy consumption, the cost of not just building but running a facility that relies on software and machine-generated light to function.
The existing Stockholm farm’s future is currently unclear. Plantagon is currently looking for new owners. Where the company’s massive existing project stands in six months’ time will give us a good indication of whether moving large-scale farms into existing city spaces is a reality we should plan for, or if it’s time to pick up a new playbook and find a different way to spread the benefits of vertical farming.