Vertical farming is receiving nearly as much attention in the news lately as the conundrum on how to feed a mushrooming world population in the 21st century. And rightly so, as this practice of growing produce in vertically stacked layers, usually through hydroponic or aeroponic growing methods, may be one solution to the problem — or not. As vertical farming continues to develop, it’s worth looking beyond the hype to see what growth in this sector of the horticulture market means for you.
Deep-Pocketed Investors Spur Momentum
The global vertical farming market was valued at $1.5 billion in 2016, and forecasts predict it will reach $6.4 billion by 2023, according to 2017 Market Allied Research. Some of the reported benefits of vertical farming include the ability to:
• Source production closer to the point of consumption
• Reduce input costs
• Maximize growing capacity by cubic volume
• Improve water-use efficiency
• Control growing conditions with precision
• Produce food crops year-round.
The industry appeals to altruistic investors lured by promises ranging from big profit margins to more sustainable farming practices. It also attracts innovators drawn to its advanced technology.
“There is increasing interest in vertical farming from Silicon Valley and venture capitalists who see an opportunity to accelerate the use of big-data analytics, artificial intelligence, machine learning, automation, and other precision ag technologies like machine imaging to the CEA sector,” says Viraj Puri, Co-Founder and CEO of Gotham Greens, a pioneering urban agriculture company with rooftop hydroponic greenhouses in New York City and Chicago.
There are some big players in the U.S. vertical farming industry already, along with small- to mid-sized operations. Fast Company named New Jersey’s AeroFarms as one of the world’s most innovative companies in 2017.
There’s also the $200 million start-up Plenty that lists Amazon’s CEO Jeff Bezos among its backers, and Indiana-based Green Sense Farms with its expanding network of vertical farms throughout the U.S., Canada, Scandinavia, and Asia-Pacific (APAC) countries.
Growing Pains Help Work Out the Bugs
Despite the swift growth, the vertical farming industry is still in its infancy and not without its challenges as it begins to mature. One of the biggest deterrents to this type of growing is its high operating cost, which can put a damper on near-term profits. The average age of profitable farms is seven years, according to Agrilyst’s 2017 Indoor Farming Report, and farms that were not yet profitable are on average five years old.
According to Dr. Roberto Lopez, Professor and Controlled Environment Extension Specialist at Michigan State University (MSU), installing sole-source lighting, growing, and HVAC (heating, ventilation, and air conditioning) systems needed to run vertical farms not only requires plenty of capital, there’s also the daunting electrical costs involved in keeping the systems running. Similar to the ornamental industry, advances in light-emitting diode (LED) technology and the availability of cost-effective, state-of-the-art lighting equipment have changed the game for the vertical farming industry. As lighting continues to become more efficient and less expensive, it will go a long way toward bringing the operating costs down for vertical farms to make them more profitable ventures.
For now, growers are using other strategies to offset vertical farming costs such as growing only crops that generate high revenues and working toward achieving exponentially higher crop yields. The main crops grown are leafy greens, microgreens, herbs, and strawberries, with leafy greens and herbs being the majority. Growers have tested many crops for vertical farming, including highly specialized edible flowers and pharmaceuticals, but suitability and profitability are the main challenges operations face.
“Ideal crops for vertical farming are those that are physically short (so you can get many layers), have short growth cycles (so you can turn your facility over many times), and are highly perishable (more valuable when grown locally),” says Rens Muusers, Account Manager at Grodan, a supplier specializing in high-performance growing media for precision growing.
Green Sense Farms, one of the vertical farming pioneers in the U.S. that grows 365 days a year using automated computer controls, has taken a different approach to offsetting energy costs. Founding Farmer Robert Colangelo says the company first tries to make sure its farms are as low energy use as possible. Secondly, it is actively working to get its farms off the grid with the help of renewable energy sources such as groundwater heat pumps, windmills, and solar panels.
“It will be a while, but I believe advancements with energy storage devices will eventually help Green Sense Farms achieve this goal,” Colangelo says.
Growing Expertise Rounds Out Technology
Because of the operating systems involved in vertical farming, as well as the social ramifications of hypothetically feeding a burgeoning world population, the industry is a melting pot of activists and professionals, especially workers with specific skill sets outside of horticulture. While the industry has plenty of people who understand systems and growing, there is a need for more people who understand how to grow crops using indoor vertical systems.
“One gap I see is the need for more people with produce industry experience, particularly those with post-harvest growing experience who can get high-quality crops growing on a regular schedule with food safety controls for customers,” Colangelo says.
The hard lean toward technology may set some vertical farms up for failure, according to hydroponics expert Joe Swartz, who works for American Hydroponics, which manufactures and installs food-grade growing systems.
“There is significant growth among both established growers and new start-ups that are focusing on correct crop production,” he says. “As a result, the industry will continue to grow steadily as demand for local food production increases, shipping and logistic issues continue to push for more localized production, and as food safety/sustainability issues become more demanding.”
Time and experience will most likely prove the best teachers as the vertical farming industry continues to grow. Making mistakes will be a crucial step in this process of growth and improvement.
“There is a lot of learning going on right now, and with learning comes failure,” says Travis Williams, Vice President of Marketing at Fluence Bioengineering, a company that designs LED lighting systems for commercial cultivation and research applications. “This period of exploration and learning will lead to successful vertical farming companies/applications coming online as more people and companies fine-tune the details that will make vertical farming a major component of the horticulture industry.”
Where You Fit In
Until vertical farming technology advances more and begins to prove itself sustainable, Swartz says he recommends greenhouse growers stick with production methods that have a better history of success and similar to their core of experience.
One positive trend that interests ornamental growers is moving young plant propagation out of the greenhouse and into vertical tiers of indoor CEA chambers. MSU’s Roberto Lopez and Erik Runkle have been researching how sole-source lighting, carbon dioxide, and temperature control can produce consistent and uniform young plants. Another example is Virginia-based Battlefield Farms’ working with Fluence to set up this type of system, which resulted in reduced shrink and improved plug development, according to Williams.
As the vertical farming industry progresses, Colangelo says he thinks more partnerships will begin to form between vertical farms and greenhouses to co-locate and maximize efficiencies for both growing technologies.
“The exciting thing about the farming industry right now is that it is stratifying,” he says. “When you overlay a sustainability goal, you see that precision field farming is great for large-volume commodity crops. Greenhouses are fantastic for tomatoes, peppers, and cucumbers, and vertical farming works great for lettuces and herbs. If we reshuffle our farmland along technologies, we will start to have a more efficient, sustainable way to grow produce.”
Muusers agrees, saying it is unlikely vertical farming will ever replace traditional greenhouses. Instead, it can be seen as part of an overall sustainable precision growing strategy that growers can use to do more with less.