The vertical farming industry is expected to be worth more than $11bn in just over six years, and has seen a commitment in the UK from the government, which is preparing to invest $24.8m through its Industrial Strategy Challenge Fund in innovative projects that boost agricultural productivity at a time when traditional farming is facing an uphill battle.
The average cost per acre of agricultural land has jumped almost 5,000pc from 1966 to $9,800 in 2017, while the amount of land available for farming has declined, as almost 450,000 hectares were lost to urban developments last decade.
“It's efficiency, this is how we need to grow,” says Steven Dring, co-founder of Growing Underground, a vertical farming start-up. “It's about controlling that environment forensically to give the plants exactly what they want all the way through their life.”
To grow its produce, the Clapham-based company first sows seeds into a recycled piece of carpet that acts as a substrate for germination to take place in the dark.
Once the seeds have started to spring to life, they are incubated in vertically stacked trays, which are exposed to LED lights dialled into the exact brightness needed by the plants, and a carefully-crafted infusion to optimise growth, taste and yield.
“All the nutritional composition you would have in soil we put into water through a nutrient mix that is exactly what's required by the plants,” Dring says.
The company has found success with its products, becoming a key supplier to supermarket giants such as Waitrose, Whole Foods and Marks and Spencer, and are far from the only ones taking advantage of this new way of producing food, as a host of companies have started to experiment with vertical farming - all while swooning investors.
AeroFarms, a New Jersey-based vertical farming company, raised $100m at the start of the month in a funding round led by the investment vehicle of IKEA-owner, Ingka Group. It’s a move that brings the firm a step closer to “unicorn” status with a post-funding valuation of $500m, and will help it boost the production of its pesticide-free produce.
Meanwhile online food retailer Ocado, which announced an almost $1bn tie-up with Marks and Spencer earlier this year around its delivery business, declared its intention to step into vertical farming after revealing a $21m investment in the space last month, including in Scunthorpe-based Jones Food Company, operator of Europe’s largest indoor farm.
At the time, Tim Steiner, chief executive of Ocado, said that he hoped locally-grown herbs and vegetables could one day be delivered “to a customer’s kitchen within an hour of it being picked”.
But the influx of money into vertical farming didn’t always seem likely. According to Dring, the agriculture sector was “under-optimised” just a decade ago, with little attention directed towards the disruptive potential of technology.
Some keen-eyed investors caught a glimpse of potential early on. Take Graham Ramsbottom, chief executive of Wheatsheaf, the agricultural investment arm of the centuries-old Grosvenor Estate, headed by the Duke of Westminster.
Set up in 2012, Wheatsheaf took an early bet on Aerofarms when its first facility was “in a disused disco”.
Ramsbottom, who has been involved in the agriculture industry for more than 30 years, said he saw little change in the way food was produced in that time, but found the data-led, precision approach on offer from vertical farming to be an interesting road forward.
“We grow food in open environments that have huge variability around climate,” he says. “If you take one acre of land from one side of the field to the other, you can have huge variation in terms of shading, temperature, type of soil, pest damage.”
The shift away from traditional agriculture has indeed picked up pace, but some criticism has been levelled at vertical farming, with concerns about the amount of energy needed to maintain facilities that are essentially growing plants 24/7.
“There's no doubt the energy equation is one of the big calculations that anyone looking to set up a facility like this does need to do at the outset,” says Belinda Clarke, director of trade body Agri-Tech East. Ramsbottom also claimed that he was “cognisant” of the issue before investing.
Source: The Telegraph