Supermarkets and Shoppers Must Embrace Vertical Farming, Our Future Depends On It

Irving Fain is an indoor vertical farming pioneer who says, after he sold his enterprise software company to Oracle, he wanted to work on a problem that had broader societal impact. He was fascinated by the fact at the time, that agriculture is the oldest and largest industry in the world. He told me that “agriculture also happens to be the largest consumer of resources globally. Look at the sort of scale and scope of the challenges we have in agriculture today and the increasing set of challenges that we’re going to be facing tomorrow and in the decades to come. And at the same time, there’s been enormous innovation in agriculture, but innovation from sort of the technological side was really just nascent in terms of how can digitization of agriculture come to life.”

Which is why he was drawn to investigating the agricultural ecosystem for his next business opportunity. In 2015 he determined his mission to revolutionize food production by using technology and data to create efficient, scalable, and sustainable farming solutions and co-founded Bowery Farms taking monumental steps toward reimagining how we grow and distribute food in an increasingly urbanized world.

Once an ambitious pipe dream, vertical farming has become a revolutionary solution to the growing challenges of traditional agriculture in a world where climate change is raging havoc over growing our foods.

This method involves cultivating plants on vertically stacked layers, typically indoors, and can range from stand alone multi-story greenhouses to being housed in empty office space in midtown city locations to truck containers to skyscraper-like structures around the globe. Almuhanad Melhim, senior Analyst Fresh Produce and Cindy van Rijswick Global Strategist Fresh Produce at Rabobank both write in their just released report Healthy Shake-up of US Indoor Farming (a recap of their observations at the June Indoor AgTech Innovation Summit held in New York ), “Over the last six years, the industry has gone from a dollar magnet to a graveyard for some hundreds of millions of dollars’ worth of failed businesses, leaving many barely standing.” The report also concedes that it is no secret that high-tech leafy indoor farming is facing a moment of reckoning – and that there is a sense of cautious optimism and that profitability and sustainability are within reach. “The future of indoor production of leafy greens’ they write, ‘is therefore promising.”

A Brief History

While the term “vertical farming” might seem contemporary, the idea of maximizing vertical space for agriculture is not new. Ancient civilizations, such as the Babylonians with their famous Hanging Gardens, tapped into the concept. But it wasn’t until the late 20th and early 21st centuries that technological advancements allowed for practical implementations of the idea.

Dr. Dickson Despommier, a professor at Columbia University, popularized the modern notion of vertical farming in 1999. His proposal was simple: create multi-story indoor farms in urban areas to meet the growing population’s food needs. By 2009, the first commercial vertical farm was launched in Singapore by Sky Greens. By optimizing resources and space, they offered a glimpse into the potential of vertical farming on a larger scale.

Challenges in Vertical Farming

While vertical farming presents numerous advantages, such as reduced water usage and year-round crop production, it’s not without its challenges:

• High Initial Investment: Setting up indoor vertical farms requires significant investment in infrastructure, specialized lighting, and climate control systems.
• Energy Consumption: Although they use less water and land, vertical farms often require more energy, mainly due to the need for artificial lighting and climate control.
• Limited Crop Variety: While technology continues to evolve, the current state of vertical farming primarily favors fast-growing, short-stature crops, leaving out many staples.
• Skill and Knowledge Gap: Traditional farming methods do not always directly translate to vertical farming. There’s a need for knowledge transfer and training to master this new art.

According to Melhim and Rijswick, “since the end of 2022, the high-tech indoor farming industry has seen a series of closures and/or financial struggles among some of its heavyweights and early movers.” AppHarvest, Kalera and most recently AeroFarms have filed for Chapter 11 bankruptcy. Upward Farms, Iron Ox, InFarm and Fifth Season have either closed or scaled back their operations.

Fain of Bowery Farms, with his software background, took a technological approach to farming. As one would imagine, at the heart of its operation is the BoweryOS – a proprietary operating system that leverages sensors, vision systems, and automation to monitor and nurture plants throughout their life. This system collects data on plant health, color, size, and texture. Uses machine learning to analyze this data, helping optimize factors like light, water, and nutrients to ensure optimal plant growth. And importantly, enables farmers to identify potential issues and address them in real-time.

Vonnie Estes, Vice President of Innovation at the International Fresh Produce Association, who’s job it is to bring technology innovators and producers (i.e., growers and farmers) together to identify and solve the pressing needs of agriculture, is also the chair of a 45 member council at IFPA of both vertical farms and greenhouse growers. Their objective is to bridge the gap between the two types of farming; and work together on the solutions that will solve these needs. She says there are challenges between the two groups “because they are very different productive ways of producing, and they have different issues.” The focus are the vertical farms with $7 billion that’s been invested in this industry; that she says, “now everyone’s saying the bottom is falling out.” Estes blames investors and companies that entered vertical farming that had a single attribute – they might have been great farmers, or great at building growing shelving or robotics, or great in technology – and the ones that did not posses all the necessary elements to put it all together is the reason some of them crashed. She says that “it’s a lot to ask of a company to be able to be good at all of that.”

Estes worked in clean tech and in biotech, and she says this is a normal cycle and is “nothing new to me,” she says when there is a new kind of technology coming onto the scene there is a hype cycle and then it moves into a trough of disillusionment and then it comes back up and becomes a real business.” The Rabobank report agrees and writes that the “widely cited criticism regarding the industry’s overhyped and inflated claims as well as its lack of planning and due diligence” led to what they dub the industry’s self-inflicted wounds. Add to that the higher interest rates, labor shortages, higher energy prices, increased construction costs and delays due to supply shortages during the pandemic and it’s easy to understand how the once fast-track sector went into a stall. According to Estes, the vertical farming industry does have a lot of promise and opportunity because grocery retailers want this product, want a surety of supply, want consistency of quality – i.e., taste, flavor and increased shelf life (which obviously give them a marketplace advantage). Melhim and Rijswick report that “anecdotal evidence and consumer feedback suggest that the taste, nutritional value, and texture of indoor-grown varieties are superior to traditional outdoor-grown varieties.” At a recent visit to the Bowery Farms R&D facility in Kearny, New Jersey I had the opportunity to taste test first-hand a variety of lettuces, herbs and strawberries, and I would agree with the Rabobank assessment.

At a recent University of California Riverside guest lecture, she had the opportunity to address a program that is training people to go into vertical farming. In talking to them, she found that most were interested in the more boutique niche type of farming, which she thought was fascinating. One student shared with her he wanted his vertical farm in the future to serve the chefs in Los Angeles with interesting herbs and spices. She believes that the Bowery Farms, AeroFarms and Plenty, who have raised a lot of money, are interested in developing multiple site around the U.S. (and some globally) are the ones who will be successful on a mass scale.

Susan MacIsaac, Senior Vice President AgScience at Bowery talked to me about the success factors for vertical farming. “We’re facing all of these climate challenges. We need we need to have other [agriculture] systems to ensure we have a secure supply of food. Indoor is a viable option because of the productivity of our farms. If you look at the yield per square foot in a year, we’re very highly productive. that ensures not only you have a supply, but you have an abundant supply coming out of these indoor farms. Second is the way in which we grow actually uses less input. So we use less water to produce the same amount of biomass. We don’t use pesticides. And, yes, at this moment, the energy requirements for production of indoor is the weak spot that people go after all the time. But we are making strides there by using renewable energy, by making improvements in the system and the way it functions so that we use less energy.”

MacIssac thinks about the future of vertical farming a lot and the ability, the diversity of crops that they can grow and she says, what’s exciting is that vertical farming is not limited to growing whatever is adapted to that local environment; they can grow their crops anywhere.

Major Players in the Industry

These three companies have taken the lead in the vertical farming space:

• AeroFarms: Established in 2004 in the US, AeroFarms operates one of the world’s largest indoor vertical farms in Newark, New Jersey. They’ve harnessed aeroponics to grow plants in misted environments, eliminating the need for soil or large amounts of water. AeroFarms, as previously mentioned, in July 2023 filed for Chapter 11 bankruptcy and is seeking to conduct an auction to sell assets while it continues ordinary operations. Their distribution includes Walmart, Stop & Shop, Harris Teeter, H-E-B, ShopRite, The Fresh Market, Amazon Fresh, and Whole Foods among others.
• Bowery Farming: Leveraging automation, LED lighting, and a unique nutrient mix, Bowery Farming is the largest vertical farming company in the U.s. grows crops twice as fast as traditional farming and uses 95% less water than traditional agriculture; especially important in water-scarce regions. Using sensors, cameras, and machine learning algorithms, they closely monitor plant growth, gather data, and refine their cultivation methods. This constant feedback loop has allowed them to fine-tune specific factors like light spectrum, temperature, and mist nutrient composition for optimal plant growth.Their strategy is to set up their farms (currently they have 5) near urban centers to ensure reduced transportation costs and emissions. Expansion plans include farms in Georgia and Texas. Founded in 2015, they’ve raised significant funding ($472 million according to Fain) with investors including Chefs Tom Colicchio, Jose Andres, David Barber and Jeff Wilde former CEO of Amazon Worldwide Consumer – a testament to the scalability of vertical farms. Bowery Farms sells its produce to over 2,000 grocery stores including Ahold Delhaize, Amazon, Safeway/Albertsons Walmart, Whole Foods, online grocer Fresh Direct as well as restaurants and stadium venues.
• Plenty: Founded in in 2014, Plenty’s farm is located in Compton, California in Los Angeles County, and according to the company, is scaling up to grow up to 4.5 million pounds of leafy greens annually. Its next expansion will bring Plenty to the East Coast with the completion of its farm in Richmond, Virginia, in 2024, which will grow strawberries in partnership with Driscoll’s, With backers like Jeff Bezos and Walmart, Plenty has attracted significant attention in the industry. They emphasize sustainability by using 95% less water than traditional farming and ensuring pesticide-free produce including leafy greens herbs, tomatoes and strawberries. Based in South San Francisco, their retailers include Whole Foods, Bristol Farms, Gelson’s Markets as well as other Bay Area online grocers. Plenty has also announced a partnership in Japan to set up farms and bring fresh, local produce to Japanese consumers.

Opportunities Ahead

Despite the challenges, the future of vertical farming appears ripe with opportunities:

• Sustainable Urban Agriculture: With more than half the world’s population residing in urban areas, vertical farming offers a localized solution to fresh produce supply. This not only reduces transportation costs and associated carbon emissions but also ensures fresher produce.
• Controlled Environment: Being indoors, vertical farms can guarantee crops free from pesticides and external contaminants. Moreover, they can ensure consistent produce quality irrespective of external climatic conditions and grow crops faster yielding multiple harvests per year – more than traditional farming.
• Innovation and Tech Integration: From AI-driven monitoring systems to advancements in LED light spectrum control for optimal plant growth, the integration of technology will continuously improve yields and efficiencies.
• Job Creation: As the industry grows, so does the need for skilled labor. Vertical farming could pave the way for new employment opportunities in urban settings.
• Bio-Pharma Crops: With controlled environments, there’s potential for growing plants that can be used for medicinal purposes, customized for specific therapeutic needs.
• Community Outreach and Education: Bowery Farms developed a Community Impact Program working with DC Central Kitchen to supply Healthy Corners stores in D.C. food deserts which sell their produce at below market prices ($1.50 according to the company) and has donated thousands of pounds of produce to food banks across the Mid-Atlantic states. Bowery employees, both on the farms and in their offices teach farming skills through regular volunteer work to their community partners.

Bowery’s Irving Fain left me with a profound statement that no one today in the food world can argue with. “When you look at Maslow’s hierarchy, shelter and food are really what we have to rely on first and foremost. We’ve had extraordinary innovation in agriculture and farming in the food system in the past 100 years, but the world around us is changing. And these systems have to continue to adapt. If they don’t adapt, we’re going to have a substantial challenges and problems into the future. I think you’re already starting to see the beginnings of this in the manifestations of this. I mean, the amount of agricultural disruption that we’re seeing month in, in month out. I mean, I’m shocked. It’s around the world.”

Vertical farming is not just an agricultural novelty; it’s a testament to human ingenuity and adaptability. The blending of agronomy with technology offers a valuable future for our food supply. We don’t have a choice, we must support it’s efforts to succeed and feed our planet.